Between a rock and a hard place
With the ensuing Nairobi Ministerial of the World Trade Organization (WTO), the Director General of the WTO, Roberto Azevêdo, said at a recent meeting of trade ministers from the African, Caribbean and Pacific Group of States in Brussels, that while there remains agreement that the Doha Round core issues such as agriculture, market access and services remain on the negotiating agenda, there is a clear divergence among members on how these negotiations should take place - whether under the present Doha framework or whether under some new architecture.
While developing countries such as India, Brazil and South Africa wish to keep the Doha Round open given that many of their developmental concerns have not yet been addressed, developed countries such as the United States no longer see a future for the round in its current state. Although they agree on the importance of achieving the developmental mandate; their major sticking point is that the landscape of the global trading system has changed significantly since the round was launched. This is in particular reference to the rise of dominant emerging country players namely, India and China, and as such, they are of the opinion that much of what had been previously agreed needs to be reworked.
Pull the plug
A cursory perusal of the history of trade negotiations reveals that missed deadlines are not a new phenomenon in the multilateral trading system. However, even by GATT standards the Doha Round of negotiations have drawn on for longer than normal. While developing countries may be opposed to closing the Doha Round in light of the issues that still remain unaddressed, in the long term, choosing to remain dogged about keeping the Doha Round alive could do more damage than good to the multilateral trading system, and ultimately to the chances of fostering a strong development component within the global trading system.
With each unsuccessful ministerial conference, the growing sense of collective disillusionment with the WTO is beginning to permeate the trade policy landscape and one of the most often-discussed effects of this has been the proliferation of regional trade agreements. The recently agreed Trans-Pacific Partnership agreement is one such example. As such, unless decisive action is taken, the WTO’s negotiating arm faces the risk of being reduced to a functionless vestigial organ – a state which developing countries just cannot afford.
The negotiating arm of the multilateral trading system holds much more importance for developing countries given that outside the WTO they do not have the clout to negotiate on a level playing field with larger developed countries. There have even been instances in the past where smaller developing countries have turned and accepted FTAs with onerous provisions on agriculture and intellectual property rights that they had previously rejected at the WTO.
Furthermore, as the relevancy and the authority of the WTO as a negotiating body are increasingly undermined, this perspective could begin to jeopardise the other arms of the WTO. A glance at commentaries and op-eds on the WTO clearly indicate that the state of negotiations is already beginning to influence the public opinion of the WTO as an institution as a whole. And while they may not be completely accurate given the WTO’s other primary responsibilities, namely, dispute settlement, monitoring and evaluation, and capacity-building, these are being affected by its weakening credibility as a forum of trade negotiation.
Long term perspectives
The only practical solution to this problem may have to come through a compromise from both sides. For the sake of maintaining the legitimacy and credibility of the WTO, developing countries may have to consider forsaking their short-term ambitions to keep the Doha Round running for the sake of making progress in the long term.
However, relenting to the closure of the Doha Round would not mean conceding defeat. Perhaps it’s time to end negotiation rounds completely and instead of a round of negotiations, implement a built-in agenda at the WTO consisting of existing issues of the Doha Round and new issues. This built-in agenda would have to include the progress that has been made in the Doha Round including decisions taken at various ministerial conferences since Singapore.
Instead of putting a deadline to conclude everything at one time, members should consider a series of deadlines that are balanced with both developing and developed country group needs. More importantly, such needs are to be articulated in that built-in agenda in a manner that they become everybody's needs. That requires substantial technical assistance and capacity building.
Pragmatically speaking, opening up the negotiations to include new elements that developing countries have been opposed to may be the only way to get developed countries to the negotiating table. While developing countries have expressed their opposition to bringing back the Singapore issues, perhaps it’s worth reconsidering this stance in order to give them the much-need bargaining power to begin to make substantive progress on development.