Bridges Weekly Trade News Digest • Volume 13 • Number 26 • 15th July 2009

G8+G5 Call for Doha Conclusion in 2010

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Volume 13 Number 26 PDF • 0.19 MB

But such high-level promises have been made before. The recent statement from the G8+G5 countries has been preceded by dozens of political vows for a quick end to the global trade talks, which were launched in 2001 to help developing countries prosper through trade. But after nearly eight years of slow progress and missed deadlines in the negotiations, the ongoing economic slump has made a world trade deal - a deal that the WTO’s director-general says would save the global economy more than US$ 130 billion each year - appear more pressing than ever.

The call for a push to conclude the talks emerged from a summit of the G8 countries - Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States - that was held in L’Aquila, Italy last week. The G8 were joined by the G5 major emerging economies - Brazil, China, India, Mexico and South Africa - for talks on the second day of the three-day summit. The declaration was signed by both groups.

But the Doha talks will not have to start from scratch. The leaders said that the negotiations should build “on the progress already made, including with regard to modalities” - the WTO’s term for the framework deals on tariff and subsidy cuts - that officials have been negotiating over the past several years. But the statement also stressed the need to enhance “the transparency and understanding of the negotiating results to date,” a nod to recent calls from Washington, which has insisted that its exporters need greater clarity on how they might be affected by a deal.

The heads of state also called on their trade ministers “to explore immediately all possible avenues for direct engagement within the WTO” and to meet in advance of the next G20 summit, which will be held in the industrial city of Pittsburgh in the US in September. India has already begun preparations to host such a meeting; the gathering is set to take place in New Delhi on 3 and 4 September (see Bridges Weekly, 8 July 2009, http://ictsd.net/i/news/bridgesweekly/50291/).

The Doha Round aside, the world leaders vowed to “reject all protectionist measures in trade and investment” and to “rectify promptly” any such measures already incorporated into domestic policy. But that promise, an almost verbatim reiteration of a pledge made by the G20 leaders in London in April, may be difficult to keep, given that many leaders are facing strong domestic pressures to protect local industries. The G8+G5 statement also renewed a call for the WTO and other international bodies to “report publicly” on any slides toward protectionism, a task that the secretariat of the global trade body has already taken up (see Bridges Weekly, 8 July 2009, http://ictsd.net/i/news/bridgesweekly/50305/).

Lamy pushing for new texts in October

WTO Director-General Pascal Lamy, who attended the three-day summit last week, is pushing hard for progress in the technical aspects of the negotiations. After several months of relative quiet, the talks are picking up in the final weeks before the WTO breaks for its annual summer holiday: industrial goods negotiations are taking place this week, and the agriculture talks are set to pick back up next week, WTO sources said. An informal meeting of the entire Membership has been scheduled for the morning of Friday, 24 July. Negotiations in the rules group are set to begin soon after delegates return from their holidays.

In an effort to “inject momentum” into the negotiations, in the words of one WTO official, Lamy has called on the chairs of the various negotiating committees to produce new texts or reports by October, sources said. But one trade delegate acknowledged that this deadline would pose a significant challenge, as “no substantial progress” has been made since the last draft texts were released in December 2008. But another WTO source called the October deadline “a reasonable timeline,” especially if the talks are going to be wrapped up next year.

October texts or no, there is no question that Lamy will keep pushing delegates and ministers alike to move forward. The director-general is reportedly considering how to schedule high-level meetings on Doha around the full ministerial conference that is set to take place in Geneva from 30 November to 2 December. The Doha Round is officially off the agenda for that meeting, which will focus on the organisation’s ‘regular work’, not its trade negotiations. But a WTO source said Monday that Lamy has not ruled out organising a Doha-focused gathering of ministers for sometime before the full ministerial conference kicks off. If that timeline proves too short, however, the director-general will be under pressure to convene trade ministers in early 2010, the source said. A lack of significant progress in the talks in the next six to seven months would make it particularly challenging to wrap up the talks by the end of next year.

But it is an open question as to whether world leaders are truly ready to sign on to an agreement that might limit their ability to protect domestic producers in dire economic times. Some observers remain unconvinced.

“Everybody’s talking a good game, but the question is whether they can play a good game,” Jagdish Bhagwati, an economics professor at Columbia University, told the Associated Press last week. “You have to distinguish between containing protectionism and actually liberalising further. I can’t think of any example of liberalisation when the macroeconomic stress is this enormous.”

“This is just a ritual assertion,” Bhagwati added, referring to the G8+G5 statement. “When it comes to actually liberalising trade, they have to face their parliaments and their publics.”

ICTSD reporting; “World leaders vow to restart stalled trade talks,” ASSOCIATED PRESS, 10 July 2009.