The Hindu Business Line : WTO talks: Time running out

At this point of time, the prospects for the Doha Round of multilateral negotiations concluding by 2006 are bleak. The Dalian, China, meet of important WTO members was just one more pointer in this direction.

THE INFORMAL meeting of the most important WTO member-countries, which just concluded at Dalian in China, has ended in failure, once again underscoring the point that new initiatives are required by crucial players such as Washington and Brussels in striking a balance between domestic lobbies on the one hand and the requirements of further liberalisation of the international trade regime on the other if the Doha Development Agenda is to see the light of day.

Among the most reliable indicators of the way the Dalian meeting went are the remarks made by the outgoing WTO Director-General, Mr Supachai Panitchpadki, who openly expressed "grave concern" about the state of the negotiations. He had hoped that Dalian would pave the way for the "July approximations" of a possible Hong Kong deal, that is, hammering out a minimum agreement on the most general of the modalities involved in the areas of agriculture, industrial tariffs and services by the end of this month.

Among other things, Mr Supachai reminded negotiators (a reminder that, one feels, was unnecessary) that little time would be left for working out the modalities after September in view of the fact that the Hong Kong Ministerial conference was slated for early December. More specifically, he warned that, like Cancun and Seattle, the Hong kong meeting too would fail "if too many issues were left undetermined until then".

Going by his earlier warnings about the lack of progress in the ongoing negotiations, some may call the WTO chief an inveterate pessimist. He may well be this, but then it is also true that that his views till now have been based more on fact than on hope. As he said on July 8, after returning from the G-8 Gleneagles summit: "It is true that some progress has been made in certain areas of the negotiations. But let us be clear: this progress is nowhere near sufficient in terms of our critical path to Hong Kong, and it is not being seen in the key issues which would help unblock progress across the board. Overall, there seems to be a renewed sense of blockage and frustration. We are also seeing a resurgence of sterile debate about process, rather than negotiations on substance". Cutting through the haze, he added: "I am afraid we have to face the facts. These negotiations are in trouble. Very little of the political support which has been shown at successive Ministerial meetings has been turned into concrete progress in the negotiating groups. Everyone has a generalized commitment to progress, but when it comes to the specifics, the familiar defensive positions take over". The situation is so disheartening that the last in a series of attempts to make some progress on agriculture in Geneva had to be terminated prematurely because of a lack of progress. Specifically, the meetings of the WTO Committee on Agriculture's special negotiating session, which were scheduled to last from July 4 to 8 , were wrapped up on July 6 by the chairman, Mr Tim Groser, on the ground that little progress was being made and that "he had nothing to add to an assessment he had made of the negotiations (earlier)".

This assessment was contained in a 10-page note which Mr Groser had issued on June 27 outlining the key issues requiring "focussed work before the end of July". These included, among other things, "some movement" on market access, domestic support and export subsidies. The obvious question to ask is whether there has been any movement at Dalian on these and other issues like non-agriculture market access (NAMA) and services, which would justify any optimism about the WTO negotiations. Indeed, it can be suggested that conditions are becoming even more difficult for a successful resolution of the problems facing the negotiations in view of a perceived hardening of stance on the part of the smaller and poorer developing economies, which are increasingly coming to feel that their interests are being sacrificed by the stronger economies, both in the developed and developing worlds, in their effort to save the Hong Kong ministerial from failure. One strong indication of this is the growing dissatisfaction of the weaker WTO members with the present disposition of their stronger colleagues in both camps to attempt to thrash out problems among themselves, that is, in small groups. Not surprisingly, the level of distrust among the LDCs is said to be growing, which cannot be said to be a happy development for the successful conclusion of the ongoing negotiations.

Mr Supachai has urged member-countries to show stronger political will to get the talks going. It remains to be seen whether this route will alone be sufficient to produce results, specially when the agenda is so vast.

In order to get an idea of how large the canvas is before the negotiators, one need only have recourse to the statement of the WTO General Council chairman, made earlier this month in which he said that, for "an ambitious and balanced outcome at Hong Kong", work now must be directed not only towards framing the modalities for agriculture and NAMA but there should also be "real progress on substance and process for market access and rule-making in services, significant and substantial progress in rules and trade facilitation, and tangible development gains in accordance with the mandate of the Doha Development Agenda".

This apart, there should also be "concrete progress by Hong Kong" on a number of other issues which are of special interest to developing countries such as "the Work Programme on Small Economies to the Working Groups on Trade, Debt and Finance and on Transfer of Technology, and from TRIPS and Electronic Commerce to the work on environment in the regular Committee on Trade and Environment, as well as the commitments we undertook in respect of least-developed countries".

Throwing some light on the evolving attitude of the poorer economies, he added that "although developing countries have thus far been very forthcoming in agreeing that attention should be focused initially on what many consider to be the key areas for the negotiations as a whole, they have put us on notice that they wish to see progress on these other elements" by the time the Hong Kong meeting is held.

In conclusion it may be said that, at this point of time, the prospects for the Doha Round of multilateral negotiations concluding by 2006 are bleak. Dalian was just one more pointer in this direction.

More important from the point of view of the future of international trade is the hunch that the existence of the WTO itself is perhaps under threat because capitals such as Washington and Brussels have come around to the view that the Geneva-based organisation in its present form has outlived its utility, as far as they are concerned.

In other words, the argument would run something like this: Since the developing world, led by the emerging economies, is increasingly coming to wield more power and influence among the organisation's members, to the detriment of the perceived interests of the developed world, why not deal a body blow to the WTO by ensuring that the Hong Kong ministerial conference fails? Hence, put up and persist with roadblocks in the way of the talks in the run-up to the December meeting.

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