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Another do-or-die moment for Doha
Whether reaching a successful conclusion to the Doha Round will ever be possible has dominated discussions in trade circles following the disintegration of plans for a WTO ministerial meeting in late December 2008 in Geneva. The planned meetings were called off after Members failed to reach a consensus on negotiating texts on agriculture and non-agricultural market access (NAMA).
With the start of a new year and divergences still plaguing the Round, WTO Director General Pascal Lamy encouraged that advancing Doha should be the WTO’s main objective for the year. Many, however, believe that the WTO has suffered from its narrow focus on the faltering talks and that the Round should be abandoned altogether. Others have proposed suspending formal negotiations for a year to allow time for new administrations in the US, the EU, and India to define their positions on international trade. So far, such proposals have not gained any government endorsements, although outgoing US Trade Representative (USTR) Susan Schwab suggested in January that Members might “take a step back, review where we are in the Doha Round and take some time to move it forward.”
Changing of the guard
US engagement in the WTO will be vital to ensure that the rules-based trading system continues to function and fulfils the development promises that featured so highly in the rhetoric surrounding the launch of the Doha Round. Some have suggested that a WTO ministerial conference, held perhaps in early summer, could give President Obama’s economic team an incentive to set multilateral trade policy objectives and reassume US leadership in international cooperation.
With Susan Schwab being replaced by Ron Kirk, a lawyer and former mayor of Dallas, Texas, it is clear that the new US administration and USTR office will need to decide their approach to the stalled Round. Yet, since Kirk’s nomination was announced late last year, his positions on specific trade issues have been the object of significant public scrutiny. For the most part, his admittedly limited record on trade shows that he appreciates the value of open markets. As mayor of Dallas, Kirk was a strong supporter of NAFTA, which he viewed as key to stimulating the local economy. He has also gone on record in favour of establishing permanent normalised trade relations with China.
But beyond those few statements, Kirk’s record on trade is thin. Time will tell how the USTR office under his direction will handle the numerous trade challenges before them and how other WTO Members will react to shifting positions and new approaches. One hopes the changes will be positive if Doha is to survive another year.
New draft text on rules highlights entrenched differences
Doha’s fate was made even more tenuous in late December 2008, however, after a new draft text released by the chair of the WTO’s negotiating group on rules revealed that longstanding differences in some areas appeared as entrenched as ever.
By far one of the most controversial aspects of the rules negotiations has centred on the US’ use of a long-controversial anti-dumping tool known as zeroing. When determining the extent to which imports are being exported at artificially low prices (‘dumped’, in WTO parlance), US trade authorities ‘zero out’ cases in which goods are sold at higher prices in the US than in the exporting country. Only cases where prices in the US are lower are considered.
Critics say that zeroing artificially inflates ‘dumping margins’ and allows affected US companies to secure unsuitably high levels of anti-dumping duties on imports with which their products compete. Outcry against this provision has been both strong and widespread since the release of the previous rules text in November 2007. Yet, the draft text released in December 2008 showed just how little progress has been made to bridge Members’ differences.
Other areas of disagreement on anti-dumping include whether countries should be required to distinguish the effects of dumped imports and other factors, and whether retaliatory tariffs should be subject to a sunset clause that would phase them out automatically after a set period has elapsed.
The rules group is also charged with strengthening disciplines on subsidies in the fisheries sector. The November 2007 text, which included specific legal language on fisheries, called for a ban on several types of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. But following controversy over several of those positions, the chair took a step back this time replacing the legal language of the previous draft with a ‘roadmap’ for future work on the matter.
Discussion on the rules text is expected to begin in early February. The group is one of the several areas that have prevented the seven-year-old Doha Round talks from reaching a successful conclusion.
As for movement on regional trade agreements (RTAs) rules – a key issue for the ACP in their EPA negotiations – that too remains stalled.
Parts of this article originally featured in:
1. “So, what next? Another do-or-die moment for
Doha,” ICTSD Trade and Sustainable Development Agenda, 20 January 2009: www.ictsd.net
2. “Obama Picks Former Mayor Ron Kirk for Top Trade Post,” Bridges Weekly Trade News Digest, Volume 13, Number 1,14th January 2009.
3. “New WTO Rules Text Brings Old Rifts into Focus,” Bridges Weekly Trade News Digest, Volume 13, Number 1,14th January 2009.
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