Yet another deadline at the World Trade Organisation has been missed. And speculation is rife that non-conclusion of the Doha Round within the deadline agreed at Hong Kong would mean a collapse of the multilateral trading system and proliferation of bilateral and regional deals (RTAs) led by the US and the EU. Such apprehensions are largely misplaced.
Well, for one, missing the end-April deadline—which arguably was unrealistically ambitious—is no disaster. Past trade rounds have taken a long time to conclude: the Geneva Round took five years (1962-1967), the Tokyo Round six years (1973-1979), and the Uruguay Round eight years (1986-1994).
This round has a broader agenda and larger membership who are more engaged. Civil society now—unlike during Uruguay Round—is a more effective watchdog. Little surprise then that deadlines are slipping. Democracy has its costs!
It is a fact that many more regional deals have been notified to the WTO since 1995 than in the entire 40 year history of GATT. Besides, the RTAs have become more onerous and skewed against the development needs of developing countries.Cotton cultivation and international trade
The recent African Union Trade Ministers' Conference in Nairobi on April 14, for instance, adopted a landmark Nairobi Declaration on Economic Partnership Agreements (EPAs). They called on the EU not to press African countries to take on obligations that go beyond their commitments in the WTO in the areas of services and intellectual property, while the three “Singapore issues” (investment, competition, and government procurement) that were removed from the WTO work programme should also be outside the ambit of the EPAs.
There is no guarantee that finalising a minimal deal in 2006 would stop developed countries from pursuing RTAs. On the contrary, they might then pursue RTAs more aggressively.
Rich countries too need the WTO—not least as a forum to manage trade disputes between each other (e.g. the Boeing-Airbus dispute), but also to discipline emerging trading powers like China.
However, it would be wrong to argue that prolonged negotiations are any better. Every missed deadline prolongs the sufferings of millions of poor in developing countries who have paid for the imbalances and inequities of the Uruguay Round agreements. It is exceedingly important that a development outcome of the current multilateral negotiations is agreed to expeditiously.
Should this, however, be used as a whip for forcing developing countries into accepting any deal regardless of its development- friendliness? Should the WTO membership sign any deal only because the trade promotion authority of the US presidency would expire next year? The costs of missed deadlines notwithstanding, as the Indian Commerce Minister has said recently in Geneva , no deal is better than a bad deal.
However, that should not become an excuse for any complacency on the part of the negotiators. Radical new offers by the US and the EU still have the potential to unlock the impasse. Any deal must include deeper cuts to rich countries' trade-distorting agricultural subsidies and better market access offers, with no unreasonable demands for reciprocation.
Cotton should be treated as a priority and all trade-distorting subsidies must be removed. Developing countries must have the right to regulate, and to sequence liberalisation in a way that serves their objectives. Unreasonable demands on NAMA and services must be removed and the principles of S&DT and less than full reciprocity must be observed throughout all pillars.
Poor countries also need adequate aid for trade that is not linked to market opening; patent laws that ensure access to affordable medicines; and action to address preference erosion. The time for action on development is now, and the ball clearly lies with the world leaders who must quickly act in enlightened self-interest.
This article appeared originally in the Financial Express, India, on May 3, 2006. |
