The Doha Round

The new year for the World Trade Organisation began with renewed resolutions to conclude the Doha Round as expeditiously as possible, meaning that hope is for the round to be concluded this year.

With the World Economic Forum in Davos due to take place at the end of January, expectations are that the world leaders would talk about pushing the round to conclusion. But as of now, although leaders make correct noises about their commitment to concluding the round, differences remain as large as ever.

The developed world expects the larger developing countries which are the emerging economies to open up their markets, while the emerging economies are of the view that they have made a sufficient contribution to the round to commensurate for what they get and if the developed world makes new demands of market access, developed countries too would have to undertake new commitments.

Talks in agriculture also remain unfinished although the optimistic statements to the effect that in January, they’ll “hit the road running”. It appears that they are still “treading the waters gently”.

Although the WTO has so far been unsuccessful in getting the world leaders to conclude the Doha Round, there has been greater progress in other issues – namely, moving forward in fleshing out a proposal for a “monitoring mechanism” that would review the functioning of provisions in multilateral trade rules for special and differential treatment in favour of developing countries and in adopting a decision on a transparency mechanism for preferential trade agreements.

Negotiations on a monitoring mechanism commenced in July 2002 based on a decision by the WTO General Council, which is the top permanent decision making body in the WTO, after the Ministerial Conference which usually met once in two years.

This was a proposal made by the African group. Talks had been languishing for years as the monitoring mechanism was linked by some developed countries to “differentiation” among non-LDC developed countries, which is an explosive issue in WTO politics.

More recently, the bone of contention was how best to balance developed countries’ fears of creating a permanent negotiating forum and that developing countries would drive for something more than a simple transparency exercise. However, all these issues appear to have been settled to the extent that all members are of the view that the proposal is almost finalised.

With regard to the decision on a transparency mechanism for preferential trade agreements, which was adopted in mid December 2010, the mechanism will apply to the following Preferential Trade Arrangements (PTAs):

(a) PTAs falling under paragraph 2 of the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries (‘Enabling Clause’), with the exception of regional trade agreements under paragraph 2( c) as described in the General Council Decision of 14 December 2006 (Transparency Mechanism for Regional Trade Agreements);

(b) PTAs taking the form of preferential treatment accorded by any Member to products of least-developed countries; and

(c) Any other non-reciprocal preferential treatment authorised under the WTO Agreement.

The adoption of this decision at the WTO is a welcome development and supported by all the WTO members. The purpose of the mechanism is to enhance transparency of the PTA under consideration. It contains provisions on notification of a PTA, procedures to enhance transparency, subsequent notification and reporting, and a reappraisal of the mechanism.

With the proliferation of regional trading agreements in the recent past, the transparency mechanism will enable non participant countries to the agreement to comprehend the agreements better to study the effects of such agreements on themselves and whether the said agreement is in conformity with accepted rules and regulations.

Although the inability to conclude the Doha Round is denting the image of the WTO, WTO’s efforts in getting these two mechanisms adopted are creditable.

(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.)