Bridges Weekly Trade News Digest • Volume 14 • Number 17 • 12th May 2010

All Eyes on US Ahead of High-Level Doha Meeting

Discuss this articleShare your views with other visitors, and read what they have to say

The Doha Round of global trade talks has been moribund for almost two years. In an attempt to revive it, different groups of WTO members are meeting to explore possible ways forward.

Senior officials from five influential member governments - the US, the EU, China, Brazil, and India - met in Paris in late April to examine the state of the struggling WTO talks. That meeting has inspired another, broader, gathering that involving 19 countries, to be hosted by the EU and India at the former’s mission in Geneva from 19-20 May.

It remains unclear whether governments will be able to overcome substantial differences in opinion on what a multilateral trade deal should look like. These divisions have caused the negotiations to stumble from one breakdown to another since they were launched in late 2001.

Michael Punke, the new US ambassador to the WTO, believes that having member governments meet in a “constellation of [different] configurations” could help them bridge these divides.

Speaking to reporters on Monday, Punke made no secret about what he thought was needed for a Doha deal: more market opening by large developing countries such as Brazil, China and India.

“At the end of the day, the success or failure of the Doha Round comes down to a very simple question,” he said. “Are advanced developing economies like India, China, and Brazil, ready to accept the responsibility and leadership that goes along with their new position in the global economy? If they are… we will have a successful outcome to the round. If they are not… we will not have a successful outcome to the round.”

The new US ambassador, whose arrival in Geneva was held up by Congressional Republicans for several months, expressed irritation with the notion that Washington had not made it clear exactly what it was seeking.

The Indians, Brazilians and Chinese were “intimately familiar” with the United States’ objectives, Punke said. In the industrial goods negotiations, the US wanted tariff cuts for “priority sectors” such as chemicals, electrical equipment, and forest products. In the agriculture talks, Washington wanted to ensure that flexibilities for developing countries would not create loopholes that undermine market access. In particular, it did not want the ‘special safeguard mechanism’ to allow developing countries to temporarily raise agricultural tariffs beyond their pre-Doha bound ceiling rates in the event of import surges or price collapses in order to protect farmers. As for services trade, he said that advanced developing countries should commit to opening their markets to foreign competition in sectors such as computer services and express delivery.

According to Punke, talk of US concessions in return for these gains is premature, at the very least, since the formulas and figures for tariff and subsidy cuts in the draft agreement texts dating back to 2008 are tilted unfairly against the US. “It’s ironic to me to talk about a starting point of additional US concessions when it’s our premise that the round is currently imbalanced and that balance needs to be improved.”

Punke’s views, including his rejection of the parameters that came close to forming the basis of a WTO agreement in July 2008, matched those expressed by top US trade officials in the past two years, irrespective of administration.

In the markets that the US is targeting, perceptions are rather different.

“We reject outright” the claim that the round is currently imbalanced against the US, said a Brazilian source, noting that such an outcome seemed implausible given the US’ active involvement in the talks since their inception.

The source said that Washington’s approach - outlining specific demands but not concessions it was willing to make in return - was “not realistic.” Also unrealistic were Washington’s demands for far-reaching market-opening across a significant range of sectors; US trading partners might have tried to accommodate them on a small number of specific issues.

“You can ask for whatever you want, but if you don’t say what you’re going to do in return, it means little. I want a Porsche,” the source laughed, “but do I have the money for it?”

The source, who was speaking under condition of anonymity, noted that in the sectors where the Washington was seeking additional access, such as chemicals and electronics, Brazil was already slated to make more of a tariff cutting effort than the US. “The US looks at sectors in which they [already] have low tariffs and says ‘Oh, let’s all have low tariffs here.’ This is not how it works.”

In contrast, when Brazil asked the US for concessions on agricultural tariffs, subsidies, and quotas, including for ethanol, US officials would refuse, saying that it was difficult.

Asked whether there was simply a fundamental mismatch among WTO members’ views on what constitute a balanced outcome to the Doha Round, the US ambassador acknowledged that there were “significant gaps,” but said that “real negotiations” could narrow them.

Putting faith in new deadlines or big ministerial meetings would not work, Punke argued. The only way to move the talks forward was “hard work in multiple configurations” - multilateral, plurilateral, and bilateral. He said that in the more than thirty bilateral meetings he had held since his arrival in Geneva last month, his interlocutors agreed on the necessity of sitting down to talk in different groups (what trade negotiators call “variable geometries”).

Trade negotiators tend to believe that small, informal meetings enable a more open exchange instead of the traditional repetition of well-worn talking points.

Punke, who repeatedly stressed that he was authorised to negotiate and willing to talk, will have an opportunity to exchange views informally with a larger group of countries at a 19-20 May meeting co-hosted by the EU and India.

At time of writing, participants were expected to include the US, the EU, Brazil, China, India, Argentina, Australia, Barbados, Burkina Faso, Canada, Egypt, Gabon, Indonesia, Japan, Mauritius, Mexico, Switzerland South Africa, and Zambia.

Sources say that the upcoming meeting is likely to focus on how to take the negotiating process forward, rather than serve as a forum for negotiating market access. At best, countries might make general remarks about whether they would be prepared to make additional concessions.

ICTSD reporting.