Future of the Doha Round

Thursday, 2 June 2011 00:00 -     - {{hitsCtrl.values.hits}}

The WTO Doha Round, which has been dragging on and on for a decade, appears to be not heading towards the conclusion of an ambitious deal, but towards the conclusion of a much-watered down deal on some individual issues which may not do much for liberalising multilateral trade as envisaged.

The failure of the Doha Round in achieving the lofty objective of liberalising global trade in order to open up markets by concluding a landmark deal within a limited timeframe can be gauged by a very recently published report which states that protectionist measures have been increasing among the G20 members.

The report, which is a part of a joint exercise by the WTO, OECD and UNCTAD to monitor G20 countries’ adherence to their pledges to refrain from trade and investment protectionism in the financial crisis and its aftermath, covered monitoring since September 2009.

The report indicates that protectionist pressures are increasing in the world’s leading economies as members of G20 introduced more trade restricting policies in the past six months than in any comparable period since April 2009. A news report from the WTO states: “The G20 collective resolve and political courage to resist protectionism in the context of the global crisis which was a positive characteristic over the previous years may be under stress.”

According to the news report, protectionist measures included tariff increases, new non tariff policies, trade remedy investigation initiations and export restrictions. However, this did not imply that the G20 members only tightened up on trade liberalisation as there were also some trade-facilitating measures such as import tariff reductions to the streamlining of customs procedures. But the restrictions numbered more than the facilitating measures.

If the recent financial crisis did not take place, the fate of the Doha Round might have been different. If the developed nations did not face severe unemployment situations from which some of them still have not recovered, if such economies had seen sufficient growth since the financial crisis, protectionism might have been less. However, the changing global scenario with some of the developing countries, which are now described as emerging economies becoming a threat to some of the developed economies by their rapid pace of development, have made the situation difficult.

WTO members are now facing the real prospect of failure in the global trade talks. The main area of differences in the talks is between the developed and the developing countries over the depth of the tariff cuts. China, India and Brazil have consistently rejected US demand for what they consider substantial new concessions in terms of access to their markets, particularly for industrial products, as unrealistic and disproportionate to the tariff subsidy reforms that developed nations have offered. The US views the terms offered at the table as biased against their interests. There appears to be no meeting point between the US and the emerging economies on these issues.

As things are at present, a comprehensive Doha Accord does not appear to be a reality. Option might be for some agreement on individual issues.

However, even if the conclusion of the ambitious Doha Round does not materialise, it does not in any way imply the failure of the WTO. The WTO’s role as the global trade body will continue to be so as this is the only multilateral trade organisation which has a membership covering the developed, developing and least developed economies with equal status for all.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)