Doha Round: Keep talking or break it off?

Eight years ago the «development round» of new trade liberalisations was launched in Doha, now known as the Doha Round. It was to improve the rules governing world trade to the benefit of the countries in the South. Yet for some time now developmental issues have been the least of its concerns. The negotiation caravan has lost its way in the desert and is badly delayed. Instead of concluding at end-2005 as originally foreseen, then 2006, it will do so at best by the end of 2010.
But should the Round be completed at all, or would it be better to break it off? Opinions diverge amongst non-governmental organisations. What they all do agree on is that the proposals on the table are not satisfactory. Yet some believe that the baby should not be thrown out with the bathwater by thoughtlessly scrapping the exercise. «The outcomes achieved in the agricultural dossier are interesting, and should not be put on the line,» says for example Mark Halle, Director of the Geneva-based International Institute for Sustainable Development (IISD). The developed countries have committed, for instance, to remove all export subsidies by 2013 and to reduce their internal trade-distorting subsidies.

«Save farmers, not Doha»

A similar line is being taken by ICTSD, the International Centre for Trade and Sustainable Development, also based in Geneva. It nevertheless draws attention to the areas of disagreement in the agricultural dossier. One particularly contentious point is how many goods should benefit from exemptions as «special products». This category includes agricultural goods that are indispensable to the food security, the survival of small farmers and the development of rural areas, and which are therefore not subject to a generalised tariff reduction.
Spearheaded by India and Indonesia, 46 developing countries demanded that at least 30 per cent of the duties in the agricultural sector should be subject to waivers. They subsequently scaled back that demand to 20 per cent. The present negotiating text speaks of a mere 12 per cent.
ICTSD Programmes Director Christophe Bellman finds this acceptable. «Studies in 20 countries have shown that this share is enough,» he says. He is more sceptical when it comes to the second point of contention, the special protection clause for developing countries. It allows for temporary customs duties on agricultural products if the quantity of imports exceeds a certain threshold or in the event of a massive decline in the import price. «This possibility is still tied to too many conditions and would be extremely difficult to implement,» says Bellman.
On the other side are NGOs that expect nothing positive to come out of a completion of the Doha Round for developing countries. «Save small farmers, not Doha,» is the slogan adopted by Focus on the Global South, Third World Network and Our World Is Not for Sale. They fear that limiting special products to 12 per cent of customs duties would spell the ruin of many small farmers and jeopardise food security. They also accuse the industrialised countries of not having reduced their export subsidies in fact. They further point out that the proposals by the USA and the EU would open the way for these countries even to increase their internal subsidies.

Trouble over duties on industrial goods
Regarding duties on non-agricultural products, i.e. industrial goods, critical NGOs are particularly wary of the «Swiss formula». It proposes that the industrialised countries should make deeper cuts in their duties than developing countries. A study by the South Centre, a think tank made up of governments from the South, nevertheless shows that given the differences in tariff structures, the poorer countries would fare the worst in proportional terms. They would have to slash duties by 54-60 per cent, and industrialised countries by a mere 30 per cent. The G11 comprising eleven emerging countries have decided to contest the formula. «The problem of some of these countries,» warns Mark Halle of IISD, «is that on the one hand they are proposing agricultural free trade because they are a highly competitive in that domain, and on the other, they would like to follow a 1950s industrial policy.»
The international development organisation Oxfam criticizes the fact that the right to increase duties in particular areas would be drastically curtailed, or even completely done away with in some specific sectors. This would apply to textiles, footwear, fisheries, gemstones, wood and energy resources. Officially the talk is of voluntary measures, but in truth and fact the industrialised countries are exerting massive pressure. «That will lead to a de-industrialisation of poor countries,» Oxfam warns.
The American NGO Carnegie Endowment for International Peace looked into the question of who would benefit from completion of the Doha Round as things now stand. It would be chiefly countries in the North and some emerging countries like Brazil, South Africa and China, and to some extent India as well. The impact of completion on African countries would be neutral to slightly negative, depending on their degree of world market integration. In Kenya for example, the agricultural sector and food industry would benefit, but mining and other industries would lose out. The outcome would be a certain de-industrialisation with many concomitant social costs.

New challenges
There is broad agreement that the worst thing would be simply to let the Doha Round continue to run. That would undermine the multilateral trade system and make it impossible to tackle more urgent and topical problems. Yet this is necessary, for much has changed since the start of the Doha Round.
One urgent topic for example comprises the trade-related aspects of climate change such as the transfer of green technologies to the South (which raises the question of patents), or the regulation of trade in environmentally damaging fossil fuels (often highly subsidised). The WTO should also thoroughly rethink its approach to agricultural goods: the food crisis shows that these are not just goods like any other. Furthermore, the relationship between the multilateral trading system and bilateral and regional agreements (some 400 at present) should be further discussed and regulated. Lastly, some internal reforms are called for: the WTO must become more efficient, transparent and democratic and must better safeguard the interests of developing countries. Failing this it will be impossible to cope with the new challenges that need to be tackled.

Isolda Agazzi, Alliance Sud

Article published in: Alliance Sud News No.  62, Winter 2009/10

Commentary: Break off the exercise!

Alliance Sud takes the view that the best way to end the fiasco of the Doha Round would be to stop the negotiations and adopt the improvements already agreed upon in favour of the developing countries. That would not be tantamount to burying the WTO. It will continue to play a crucial role in the multilateral regulation of world trade, in particular through its dispute settlement system from which the countries in the South are benefiting increasingly.
Contrary to what WTO Chief Pascal Lamy and the Swiss Trade Minister maintain, breaking off the Doha Round would not damage the credibility of the WTO. On the contrary, is an organisation not more credible for admitting that it has become deadlocked than for insisting on completing, by hook or by crook, negotiations that have long been overtaken by events?
Putting an end to the Doha Round would open the way for the urgently needed reform of the WTO, its structure and its functioning. It would release energies that could be devoted to the trade-related aspects of the truly pressing problems facing our planet, namely food security and global warming. In this case the WTO is part of both the problem and the solution. It could demonstrate that the multilateral trading system takes the core problems of humanity seriously and is able to help find solutions.
Michel Egger, Alliance Sud

Article published in: Alliance Sud News No.  62, Winter 2009/10

More on the Doha Round and the position of Alliance Sud is available here ....>>