27th May 2010

Bridges Weekly | Deeply Divided, WTO Members to Search for Common Ground on Doha

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A meeting of senior officials from 19 WTO members last week was valuable primarily for helping participants reach “a common diagnosis” of the “seriousness and depth” of the problem governments face in trying to conclude the Doha Round trade talks, officials said.

Several of the exchanges during the gathering, which was jointly hosted by the European Union and India at the EU’s mission to the WTO in Geneva on 19-20 May, served to underline the gaps separating central players such as the US and large developing countries like Brazil, China, and India.

Many were “dumbfounded” by the depth of the differences, said one official who attended the “very educational” meeting. “There is a huge gulf separating the sides, and for the time being it is insurmountable,” the source told Bridges. Countries were divided not just on the substance, but on how to approach the negotiation. “They cannot negotiate yet - they need to agree on how,” the source added.

The meeting was the latest attempt by WTO member governments to see how they might revive the Doha Round negotiations. In late April, officials from the US, the EU, China, Brazil, and India met in Paris to examine the state of the talks. Those countries were represented at last week’s meeting, along with officials from Argentina, Australia, Barbados, Burkina Faso, Canada, Egypt, Gabon, Indonesia, Japan, Mauritius, Mexico, Switzerland South Africa, and Zambia.

The first day of the gathering was devoted largely to countries’ well-established views on the negotiations.

US Ambassador Michael Punke said that the terms for cutting subsidies and tariffs outlined in draft texts dating back to 2008 would not be politically saleable in Washington. He repeated the US’s call for developing countries like Brazil, China and India to provide greater market access, particularly for industrial goods. Punke did suggest that the US would be prepared to offer additional concessions of its own, suggesting that Washington did not expect to get what it was seeking for free. He did not, however, provide details about what these concessions might look like.

Canada and Australia also called for greater ‘ambition’ - a euphemism trade negotiators often use for deeper tariff or subsidy cuts - albeit not as comprehensively, sources said.

Brazil, meanwhile, said that it was already at the outer limits of what it could agree to in terms of industrial market access. And India warned that if the package on the table unraveled, it would take another decade to conclude the round. Picking apart one aspect of the draft texts — industrial goods, say — would open up others, such as farm subsidies, India said, according to sources.

On the second day of the meeting, officials recognised the impasse. They agreed that there should be a dialogue aimed at finding and defining what one participant described to Bridges as a “common area” in which a final Doha deal could then be negotiated.

“There is a common diagnosis of the problem,” the trade diplomat said, suggesting that the officials present accepted that they needed to define a shared playing field, as opposed to “the US defining its field and the Indians defining their own.”

However, they made little headway towards agreeing on “common terms of engagement.” The meeting ended early in the afternoon on the second day, hours ahead of schedule.

Delegations appear set to meet in a variety of configurations in an attempt to develop shared understandings about the broad parameters within which a Doha agreement could be finalised. Argentina stressed the importance of multilateral meetings alongside the bilateral and plurilateral ones that will take place.

Participants at last week’s meeting agreed that the various Doha Round negotiating groups should keep meeting at the WTO, though they acknowledged the current stalemate on agriculture and non-agricultural market access (NAMA). Switzerland and the EU asked whether it would be possible to reinvigorate talks in other sectors, such as services and rules, sources report. Some developing countries, notably Brazil, stressed that since the ambition on agriculture and NAMA would set the tone for concessions elsewhere, members would be unlikely to show their hands on services without knowing what they stood to get in terms of agricultural and industrial market access and farm subsidy reduction.

The Doha Round will be discussed by ministers participating in an Organisation for Economic Co-operation and Development summit on economic recovery and sustained growth later this week. It is also on the agenda for the G-20 summit in Toronto next month, although trade will take a back seat there to financial system reform.

Nevertheless, nine years into the multilateral trade talks, it remains unclear whether the inviolable ‘red lines’ of prominent WTO members overlap enough to make a Doha Round agreement possible.

ICTSD reporting.