|
THE DEADLOCKED DOHA ROUND
 The decision by members of the WTO to suspend the Doha Round of multilateral
trade negotiations this July was a result of their recognition that negotiations
had reached a deadlock. This was a direct consequence of their failure to overcome
their differences over three critical issues on the agriculture agenda: the reduction
of domestic subsidies, and the reduction of agricultural tariffs; the treatment
of sensitive agricultural products; and the treatment of the so-called special
products. Of course, failure to make progress in this crucial area of agriculture
means that other issues, such as industrial tariffs and services, could not even
be discussed.
To understand and appreciate the likely impact of a failure to conclude the Round
successfully, we have to first recall the rationale behind launching it in 2001.
 This Round was dubbed a development Round in recognition of the fact that there
remain, in today’s multilateral trading system’s rules and disciplines, imbalances
that work against developing countries, and that this had to be corrected.
The key objective of the Round is to try to improve multilateral trade disciplines
and strengthen the commitments by all WTO members in such a way that they establish
a more level playing field and provide developing countries with better conditions
to enable them to reap the benefits of trade opening.
It is a well documented fact that for many developing countries, agriculture
remains the single most important sector in terms of its contribution to economic
and social development. In such countries, agriculture is the single biggest employer
and the main source of livelihood for a significant part of the population, particularly
those living in rural areas.
Because of its history and structure, it is not surprising that the current difficulties
we face in the negotiations stem largely from the agriculture sector. It is also
a known fact that the agriculture sector is several trade rounds behind industrial
goods in terms of its integration of the rules and disciplines of the WTO. It
should be recalled that the agreement on agriculture only came into force in 1995
with an aim to restructure trade regimes that have been in place for over a century,
and are still highly influenced by trade practises that have their roots in the
past economic and political patterns of trade flows. This has meant that the sector
has not benefited from the 50-year process of trade opening that we have witnessed
in industrial goods; as a result we are now faced with the challenge of clearing
this backlog in the Doha Round.
Another challenge we face with regard to the agriculture sector is that members
among themselves have different views on how to bring about trade opening in this
sector. Some states believe that agricultural products should be produced and
traded under exactly the same rules and disciplines as industrial goods. Others
believe that agriculture is special as it is linked to livelihoods, subsistence
food security, and the environment, including the preservation of landscape and
so on. It is therefore clear that to reach an agreement, each side will have to
compromise on its beliefs and positions on agriculture.
It is also important to note that, though a major part of the challenges we now
face in the negotiations is related to the agriculture sector, significant progress
has already been achieved, notably during the last WTO ministerial conference
in Hong Kong in 2005.At Hong Kong, members agreed on a date for the elimination
of the most trade distorting of agricultural subsidies, the export subsidies.
This was a key negotiating demand by developing countries. Members agreed that
these subsidies must be eliminated by 2013, with a substantial part of them eliminated
by 2010.Another key achievement at Hong Kong was the agreement by rich countries
to eliminate all export subsidies affecting the cotton sector in 2006. Members
also agreed to make deeper and faster reductions in trade distorting domestic
subsidies for cotton than for the remainder of other agricultural products.
Another significant decision was that rich countries will provide duty free and
quota free access of all least developed countries’ exports of cotton.
I have highlighted these developments in the agriculture sector because of its
importance to the economic development of developing countries, and also to highlight
what is already on the table and will be lost if there is no successful conclusion
of the Round.
While acknowledging that improved market access and improved rules and disciplines
in the multilateral trading system are important elements for development, it
is also important to recognise that on their own, these elements will have little
or no impact on the challenges that developing countries face today if additional
assistance and adequate domestic policies are not put in place. For development
to take root it has to be embedded in a supportive economic, social and political
context and a coherent multifaceted policy framework.
To contribute to this, WTO have also embarked on a programme of work aimed at
putting in place a comprehensive aid for trade package that will benefit developing
countries. The rationale for an aid for trade package to accompany the results
of a successful conclusion of the Round is very straightforward in our view. It
is a well known fact that trade opening can only be politically and economically
sustainable if it is accompanied by flanking policies which simultaneously address
capacity constraints, whether human, bureaucratic or structural in developing
countries, while also addressing the challenges of distributing the benefits created
by trade opening in these countries.
Therefore, to address those challenges that arise as a result of trade opening,
we are actively working with various partners (including the World Bank, IMF,
UNDP, UNCTAD, regional development banks and donors) to put together a comprehensive
aid for trade package.
Though it is important to note that the WTO is not a development or a financing
agency, nor does it have any ambition to become one, we are aware of the potential
role that we can play in assisting developing countries understand trade rules,
support their efforts to meet trade related capacity building needs and fully
exploit the potential benefits of trade opening.
Turning to the current status of the negotiations, there is no doubt that the
we are at a very critical stage of this process and that failure to resolve the
current differences will result in a total collapse of the negotiations and the
Round.
Who will be the winners? Who will be the losers? I believe we will all be losers
if the Round fails but especially developing and least developed countries. A
delay will mean a missed opportunity to address the imbalances that continue to
undermine their capacity to benefit fully from trade opening.
Furthermore, a delay in the resumption of negotiations will further strengthen
the forces of protectionism worldwide and also trigger an even more pronounced
shift toward bilateral or regional free trade agreements which by their nature
discriminate against smaller and weaker developing countries. The WTO multilateral
process is the only forum that guarantees a balanced approach to trade opening.
It is also important to note that since the suspension of negotiations in July,
I have been consulting extensively with members, and all of them – without exception
– have expressed a strong political commitment to successfully conclude the Round
in the coming months. We now need to move from words to deeds and make the Doha
Round come true. A lot has already been achieved; indeed, what is on the table
today represents more than two or three times what was achieved in the last round
concluded in 1995. If we do not succeed, all this will disappear from the table.
I will continue to encourage all parties to reach a compromise that will unlock
the negotiations and ensure that the developmental objectives of the Doha Round
are achieved. Together we can make it happen.
  
Pascal Lamy has been the Director-General of the World Trade Organization since September
2005. Prior to this he was Commissioner for Trade at the European Commission from
1999 to 2004. His most recent publication is Towards World Democracy, 2004. by Pascal Lamy
Director-General of the World Trade Organization 
|
