Bridges Trade BioRes • Volume 6 • Number 14 • 28th July 2006
WTO DOHA ROUND PUT ON HOLD INDEFINITELY
WTO DOHA ROUND PUT ON HOLD INDEFINITELY
The Doha Round of trade negotiations was put into deep freeze on 24 July, after a meeting of ministers from six key trading nations collapsed over divisions on how to cut farm subsidies and tariffs. It is not clear when — or if — the talks, which started nearly five years ago, will resume. Kamal Nath, India’s Commerce Minister, said that the round, though not dead, "is between intensive care and the crematorium". While some civil society groups lamented the breakdown as a missed opportunity for balancing the multilateral trade system, others welcomed the suspension as a chance to completely revise countries’ approach to multilateral trade.
"It will not be possible to finish the round by the end of 2006," WTO Director-General Pascal Lamy told an informal meeting of all Member delegations the day after ministers from the EU, the US, Australia, Brazil, India and Japan — the so-called G-6 — failed once again to bridge their differences. Saying that "the gaps remain too wide", he recommended suspending all negotiations currently underway at the WTO indefinitely. This "time-out", Lamy suggested, would be an opportunity for Members to examine what was at stake, and reconsider their positions. In his report on the state of the negotiations to the General Council on 27 July, Lamy told Members that ambassadors had accepted his recommendation to indefinitely suspend the talks, albeit with regret. The General Council did not take a formal decision to suspend the talks. This means that another formal decision will not be necessary to restart the negotiations.
What many are calling the most serious crisis in the WTO’s decade-long history comes little over a week after heads of state from leading industrialised and developing countries vowed at the G8 summit in St. Petersburg to show greater flexibility in the trade talks (see Bridges Weekly, 19 July 2006). Lamy has long held that unblocking the negotiations would require parallel progress on a ‘triangle’ of issues: the US would have to agree to deeper cuts to domestic farm support; the EU to increased agricultural market access, and developing countries such as Brazil and India to lower industrial tariffs. Each group has been urging the others to budge first.
Furious recriminations have followed the breakdown, particularly between the EU and the US. Brussels blames Washington for refusing to offer any new cuts to farm subsidies; the latter counters that the EU gave too little on market access to make any such movement possible. Many of the ministers maintained that the divisions were not insurmountable. Brazilian Foreign Minister Celso Amorim attributed the collapse to a lack of "political will". Nath said that the notion that subsidy cuts should be paid for in market access represented a "gap in mindset" that would need to be transcended for the round to succeed
Civil society groups’ reactions to the breakdown have been mixed. Some development groups pointed to the missed opportunity to address unfair trade rules. Oxfam warned that the suspension would continue to allow rich countries to dominate multilateral trade, deny better market access to developing countries and open other countries’ markets for their exports through bilateral trade arrangements. "The cost of delay is too big and the potential for development too great for these talks to be left to wither on the vine," said Celine Charveriat of Oxfam’s Make Trade Fair campaign.
Some environmental groups, however, were more upbeat about the collapse, hailing it as an opportune moment for a complete overhaul of the multilateral trade system. Friends of the Earth urged WTO Members to shift to a system of multilateral governance "that actively promotes human rights and environmentally sustainable development". Greenpeace called for a social and environmental assessment of the global trade system. The Southeast Asian Fish for Justice Network (SEAFish) welcomed the suspension as a "blessing in disguise", pointing in particular to potentially negative impacts of further liberalisation in natural resource products on the sustainability of fish stocks and forests.
Some trade analysts believe that the negotiations might be able to resume after the US elections this fall. Others think that the round may be frozen until 2009, when a new presidential administration takes over in Washington with a better chance of receiving trade promotion authority (i.e. the authority to negotiate trade deals which can simply be rejected or adopted but not amended by Congress). Without it, the US is not considered to be a credible negotiating partner — multilaterally or bilaterally — since Congress would then be able to pick apart carefully-assembled deals provision-by-provision, instead of having to give each package a straight up or down vote.
Breakdowns are not new to global trade negotiations. The Uruguay Round talks fell apart in December 1990 and only resumed a year later when the then-Director-General of the GATT took the controversial step of coming up with a potential compromise agreement, better known as the ‘Dunkel draft’. Following the collapse of the Cancun Ministerial Conference in September 2003, the Doha Round itself saw negotiating work frozen for about four months, before the US helped revive the talks in early 2004.
ICTSD reporting; " Doha Round Suspended Indefinitely After G-6 Talks Collapse," BRIDGES WEEKLY, 26 July 2006; "Rich countries not off the hook after breakdown of WTO talks," OXFAM, 25 July 2006; ""Face it, Doha is dead": time to look at alternatives to WTO," GREENPEACE, 24 July 2006; "WTO Deadlock: Good news for the poor and the environment," FOE, 24 July 2006; "Regional fisheries group hails WTO talks collapse as blessing in disguise," SEAFISH, 26 July 2006.