Eight years after the beginning of the Doha Development Agenda in November 2001, the process of liberalisation and multilateral trade adjustment has stalled. In fact, it is well known that within the World Trade Organisation (WTO), governments are seeking to smooth out the differences and outline the policies of international trade during the so called ‘negotiation rounds’. On the occasion of the IV Ministerial Conference, the Doha Round (Qatar) looked at sustainable development, touching on a series of themes relating to commerce, such as intellectual property, services and agriculture. As far as the latter is concerned, the objectives set were ambitious, for example the aim to make substantial improvements in market access, a considerable reduction of support for internal markets that causes distortions in trade and above all a reduction, leading in the future to a complete elimination, of any forms of aid for exporting agricultural products.
The Doha Ministerial Declaration recognised that the majority of the WTO members are developing countries and that their needs and interests are above all focused on the labour programme. The consecutive deadline dates for meetings amongst nations aimed to end the negotiations by 2005 ; but this was not possible. In spite of all the meetings in Cancun (2003), Hong Kong (2005) and Geneva (2008), the situation does not seem resolved and the prospect of ending the negotiation by 2010 seems even more distant.
The Doha Round goes round and round and round…
As already stated, the objectives in the agricultural sector were certainly the most important and ambitious ones on the Doha Agenda. In this area a much quicker course was anticipated in comparison to the other negotiations, in order to enable the adoption of certain Modalities by 31st March. This referred to a document containing the establishment of the agricultural agreement, outlining the sort of duties to be carried out in each area as well as quantifying them on a more general level. This document should have allowed each country to submit its own “schemes”, that would conform to the above-mentioned Modalities, in the following ministerial conference in Cancun. Despite the initially interesting proposals, the Modalities draft presented by the President of the Agriculture Committee, Stuart Harbinson, was refused by all countries for different motives, meaning that it was impossible to reach an agreement and thus the deadline of 31st March 2003 passed by. Subsequently, in the summer of 2003, the negotiations were resumed thanks to certain incidents such as the approval of the CAP reform, which has permitted Europe to take a less defensive stance as far as agriculture is concerned and allowed the presentation of a common USA-EU proposal. Nonetheless, the Cancun Conference in 2003 sanctioned the creation of the G-20 negotiation group, thus showing that developing countries are nowadays able to organise themselves and present strong opposition to the USA and the EU ; this was the first sign of the decline of the old duopolistic governmental system in global economic relations, thanks to which the USA-EU agreements had been easily extended to all other contracting parties with minor modifications at most. On the contrary, the Cancun Conference has restored a much more varied landscape of protagonists and coalitions.
After Cancun the negotiations came to a standstill, but eventually got moving again thanks to the nations’ understanding that some progress had to be made before the beginning of the American elections and the European Commission’s presidency rotation at the end of 2004. After a series of meetings taking place on various levels, a framework agreement was eventually drawn up, known as the July Framework which ratified the wish to continue the talks. The framework agreement was not very ambitious, but its importance lies in the fact that it avoided an umpteenth failure.
After the July Framework in 2004 began a fifth series of meetings, culminating with that of October 2005 in Zurich where the United States seemed willing to reduce subsidies for national agriculture by 60% and to gradually abolish some aid relating to exports. In the same context, the EU proposed that the ministerial conference in Hong Kong should adopt a growth package whilst the G-20 presented various proposals concerning agricultural market access. In short, even if delayed, the negotiation process was put back on its feet just a few months before the Hong Kong Conference scheduled for December 2005.
Nevertheless, due to the lack of agreement amongst the ministers of WTO member countries on the Round’s schedule, the General Director of WTO, Pascal Lamy, decided to lower the number of objectives to be pursued in the following Conference. A Ministerial Declaration of a ‘minimalist’ size was thus drafted, in order to reach an agreement on the matter and on times for future negotiations. The ministers gathered in Hong Kong were not given the task of making the decisive step which would bring the Round to a conclusion : however, what was necessary was to reach a consensus on the “nominal” objective, meaning to continue the Round and define the dates for its continuation ; this was anything but easy.
The difficulties faced in finding a unanimous solution tallies with what is defined as the “triangle of interests,” in other words the sustaining of the internal agriculture market as wanted by the United States, the access to the agriculture market requested by the European Union and that of industrial products sought after by developing countries. In fact, the Hong Kong Conference in December 2005 was concluded with an unanimous approval of a 44-page document which foresaw the following : the abolition of export aid for agriculture by 2013, the elimination of aid for the cotton market by 2006, the aim of giving free access to products exported from less developed countries, and finally the establishment of an significant agreement regarding the procedure for negotiations about agricultural and industrial products, as well as an agreed text on the proceedings of the negotiation concerning services. Despite the strict schedule and the intense mediation efforts, the following negotiations in 2006 did not bring the expected results and reaffirmed the irreconcilability and inflexibility of the principal negotiating protagonists’ positions (USA, EU and G-20). Thus, on 24th July 2006 the sine die disruption of the Doha Round was announced. The reluctance manifested by the US administration to accept the proposal put forward by the G-20 to reduce ‘internal aid’ in the agricultural sector derived from their unwillingness to make commitments before the midterm elections in November 2006. In addition, in early 2007 the necessary redefinitions of the new Farm Bill did not permit countries to make binding commitments to decisions on internal agrarian policy.
Even the European Union, which had made progress during the more flexible negotiations proposed, has in the end assumed a very ambiguous position ; for example, the proposals negotiated by the European Commissioner Mendelson, were most of the time openly opposed by some European Member States, including France, as they were incompatible with the CAP reforms and individual national interests. During a communiqué the day following the disruption of the Round, the FAO heavily criticised the approach used in the negotiations, focusing on free trade and not on fair trade. Above all, the USA and EU agendas focused on objectives aiming to maximise trade access by others, defending as much as possible their own more fragile sectors, maintaining the defence of intellectual properties and ‘pushing the service sector button’. Such objectives express the interests of a transnational entrepreneurial reality, which does not correspond with the will to match the negotiating interests of developing countries. To sum up, the economic theory of comparative advantage, that predicts a profit for all countries in international trade, is revealed to be a long way from reality. Thus, multilateral negotiations have been transformed into a contest where exports have increased according to a decidedly mercantile logic. The year 2007 however signalled a change : after the elections in the United States and the new European presidency of one term in Germany, the decision to resume the negotiating process was taken on 7th February, involving from time to time small groups from member countries of the WTO, even though uncertainties were still evident and negotiations were carried out largely on an informal basis. After the failure of the Potsdam meeting, mainly due to the diverse opinions expressed by the EU, USA, India and Brazil, the Geneva meeting in July 2008 was characterised by tension between the Americans, Indians and Chinese, to such an extent that no compromise could be reached concerning the special safeguard mechanism.
At present, many countries seem inclined to start a dialogue, above all Brazil ; in fact, in the final declaration of the G-20 summit, which took place in London 2009, they reinforced their desire to bring the Doha Round negotiations to an end. In addition, Brazil also seems aware of the central role the United States have in the WTO and the need to have American collaboration in order to reach a business compromise. Yet the Obama administration appears mostly interested in other problematic internal policies, such the health reform, or in other international policies such as climate change. The Cairns Group of countries, which is made up of 19 of the biggest exporters of agricultural products, has also recently declared itself disappointed by the small amount of progress made in 2009 in the agricultural sector, and has thus asked for the speedy formulation of an agreement which allows greater market access, reduces the national aid for production and eliminates the subsidies for exports by 2013 ; now the only plausible date for overcoming the impasse in which the Agenda currently finds itself.
In fact, the crisis that the world economy experienced in 2008 and 2009 has certainly not facilitated the reaching of an agreement, but has on the contrary led to nations shutting themselves off even more than before. The European Parliament is well aware of this additional factor, and in its 16th Resolution of December 2009 it underlines the fact that a positive conclusion of the Doha Agenda “could constitute an important parameter in favour of global economic revival after the economic and financial crisis.”
What’s the situation like today ?
Between 1947 and 1995 there have been eight rounds of multilateral negotiations at the GATT. Throughout this time the duration of these negotiations has been slowly increasing : from the Tokyo Round which lasted 5 years, to the Uruguay Round which went on for more than 7 years. The present Doha Round is not yet over ; the spirit in which it was born does not in fact correspond to the new economic equilibrium and today’s competitiveness : the main founders of the Round in 2001 were influenced by the difficulties of the time and by the aim of bringing forward the process of multilateral liberalisation, in parallel with growth, in such a way as to reformulate the results of the Uruguay Round to favour emerging countries and to safeguard at the same time the international North-South dialogue. Instead, today we live in a completely changed world ; a sort of restructuring of the world economic order is taking place with the emergence of new and strong global players, such as Brazil, India and China. These economic realities, which are comparatively very different from those which kick-started the Doha’s negotiation round, make it difficult to passively ratify the agreements proposed by the United States and the European Union. In addition, relatively new problems have arisen, that have fed the tendency towards forms of protectionism, linked to the adoption of non-tariff barriers, which aim to confront an increasing violation of intellectual property rights (for example, falsifying markets and patents, model plagiarism and industrial design, falsification of products’ origin) and the attempts of dumping in its various forms and manifestations. The negotiation’s deadlock is thus greatly due to the changes that have taken place since the agenda was altered.
- Critics of the Doha Round
A work of art, exhibited on the occasion of the interdepartmental conference in Hong Kong in 2005, which disparages the contrast between developing and industrial countries.
Photo : flickr.com
The difficult objectives that countries face in sustaining the multilateral process of commercial liberalisation in the WTO sphere are counterbalanced by the ease with which a majority of commercial agreements, regional or bilateral, are being concluded by both economically advanced and developing countries. New and strong incentives to increase both commercial bilateralism and preferential agreements between countries seem to originate from the multilateral negotiating system crisis.
Nevertheless, the bilateral approach, even though it guarantees a more rapid and efficient conclusion to the negotiations, has considerably unfavourable aspects : it produces distorted effects of commercial flow and risks aggravating the situation in economically weaker countries due to the diverse economic and political weight of nations that reach an agreement using bilateral negotiation.
More so than returning to using old forms of protectionism and lockdown, that are today as unrealistic as they are incompatible with the new world economic order, Lamy is clearly aware that the true risk of taking an imploring tone in interstate dealings is the rise of a “neomercantilism” in trade relations. In fact in his most recent speech on 26th March 2010 at the Trade Negotiations Committee he affirmed : “So, to sum up, the message I take from this week’s stocktaking is one of realism and resolve. Our road has been a long one. We are not yet at the end, but we are pressing on with determination, in the assurance that the prize is worth the effort. When we leave this room many outside will ask : is this not just more of the same ? And how could more of the same produce results that have not yet been achieved ? My answer will be : Yes, this is more of the same mandate you agreed in 2001. Yes, this is and has to be more of the same collective determination to get to the finish line. Yes, this is also more of the same ’doing it multilaterally’ which is longer, more difficult but which is universal. But there is also a desire by members to look beyond the individual elements of the Round to construct a global package which each and every one of you can sell back home. In conclusion, the name of the game now is ’closing the gaps’ and paraphrasing the words of Admiral Nelson, ’the WTO expects that every Member will do its duty’ in the tough months ahead of us.”
Months : certainly ; but it might be more realistic to say years...
Headline photo : flickr.com