WTO ministerial talks collapse but Doha Development Agenda gets stronger: CUTS

July 30, 2008, New Delhi
“Life will go on for the World Trade Organisation. The existing system is robust enough. According to some estimates, the Doha Development Round would have infused another US$ 136 billion into the global economy. So it is desirable, even necessary. But what happened this week in Geneva has some more important lessons,” said Pradeep S. Mehta, Secretary General of CUTS, a leading consumer policy research and advocacy group, which works on trade and regulatory issues. “The Round is on and no one who echoed an oft heard view that if the modalities are not settled in this July the Round will fail. In fact, many volunteered to keep their July 2008 offers on the table for the future.”

“It became clear that last minute game-play by some smart negotiators like the absurd ‘demonstrable harm’ proposal will not carry through. Negotiations will have to be based on an equitable and fair play. Commercial diplomacy pundits may have to re-jig their training courses,” said Atul Kaushik, Director of CUTS Geneva Resource Centre. “The Doha Round will succeed when the world leaders realise that they agreed to a Development Round in 2001 and will have to deliver. Long distance and high decibel telephone calls may have worked earlier. Now, the democratically elected leaders will listen more to the measly whine of the poor in their constituencies more than development assistance-laden world leaders,” he added.

The collapse came because developing countries were asking for protections against import surges through a special safeguard mechanism so that their poor farmers do not lose their livelihoods to vulgarly subsidised agricultural products from the west. Egged on by their agribusiness, the US disagreed, saying that they need real market access in developing countries for agreeing to cap or bind their agricultural subsidies at double the present levels.

The Lamy Package of July 2008 had an import surge trigger set at 140 percent of base imports. One formula removed the volume trigger altogether, but instead sought proof of demonstrable harm to the importing country and gave a watered down version of the existing safeguard action provisions, already allowed under the WTO agreement. Another sought a 115 percent trigger. Acrimony followed, but was contained in the green room itself. Outside in larger gatherings and before the press, all ministers and Lamy expressed disappointment, sought a period of reflection and refrained from blaming specific ministers.

More than 30 trade ministers had gathered in Geneva for almost nine days to agree on modalities of tariff reduction in agricultural and industrial goods and subsidy capping in agriculture in order to move forward the Doha Round that has languished, like its predecessor the Uruguay Round, for seven years now.
For more information, please contact:
Pradeep S Mehta, +9198290 13131, psm@cuts.org
Bipul Chatterjee, +9198292 85921, bc@cuts.org

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