The Hindu Business Line : WTO talks breakdown no surprise

What has happened to the Doha Round is that the level of ambition pitched for it has not been matched by the political will and determination of some of the leading players — a task made doubly difficult by the fact that the developed economies must concede more ground than the poor for a fair and equitable framework. What makes the outlook for the Doha Round even more critical is that the insufficiency of political will has remained more or less unimpaired though long identified as the main problem.

There are some who were holding out the hope till the last moment that the negotiations on the Doha Round of multilateral trade liberalisation would overcome the last hurdles at the July 24 Geneva confabulations among the US, the EU, Japan, India, Brazil and Australia, with the result that there was expectancy in the air about the outcome. But, of course, things turned out otherwise, which was certainly no surprise for the participants themselves, to whom, among others, it has been crystal clear for quite some time that no further progress on the Round is possible unless the main protagonists involved concede more ground in their special spheres of interest.

Make or break point

In fact, last October, the World Trade Organisation Director-General, Mr Pascal Lamy, had injected a sense of crisis and an underlying hopelessness when he had said (as reported on October 25, 2005) that the "next week or 10 days" would be "the make or break point" for the Doha Round.

At the time, the WTO chief was referring to the offer made by Brussels in the farm sector, his point of contention being that unless the EU improved on it there would be no point in going ahead with the December Hong Kong Ministerial meeting.

Everyone knows what happened at the ministerial conference: It ended without a whimper as far as concrete progress towards conclusion of the Doha Round is concerned, the only concrete decision taken relating to the setting of another deadline (July 2006) — the entire effort hinging on the fact that the Round had to be completed by the end of 2006.

Incidentally, in view of the point made by Mr Lamy last October, when the intransigence and intractability of Brussels appeared to be the main stumbling block in the way forward, it would be interesting to compare what has been touted as the principal reason behind the failure of the latest Geneva effort to break the deadlock.

As the Union Commerce Minister, Mr Kamal Nath, has said: "We could not agree to provide access to subsidised products from some developed markets. The move would have been disastrous for us. It is not desirable and is against the mandate of the present round of negotiations. The US was trying to promote global trade in subsidised agricultural products, which was attacked by everyone. The US was unwilling to move."

Not surprisingly, the EU Trade Commissioner, Mr Peter Mandelson, also blamed Washington for the seeming coup de grace delivered to the Doha Round when he said that the US "was unwilling to accept or indeed acknowledge the flexibility being shown by others in the room, and as a result felt unable to show any flexibility on the issue of farm subsidies." On July 24 this may have been the specific hurdle, but the question to ask here is whether Brussels had settled its well-known areas of dispute with Washington, the importance of which was underscored by Mr Lamy last October.

And it is not only Mr Lamy who, at that time, had pointed an accusatory finger at the EU. The then US Trade Representative, Mr Rob Portman, had described the EU offer (to cut average farm tariff by 24 per cent while protecting `entirely' some of its most import-sensitive products) as unacceptable, stating unequivocally that if Brussels failed to make deeper cuts, "We will not be able to have a successful Doha Round." Pointing to the October cuts in domestic farm subsidy effected by Washington, he had added with an ominous degree of finality: "The US has now done its part. It's for the EU and others to respond."

Daggers drawn

Clearly, the upshot of the US-EU tariff row is that Washington cannot be blamed solely for the suspension of the negotiations, Brussels in fact being equally to blame for the current impasse. And everyone knows the nature of the problems being faced by the EU negotiators in making concessions at the negotiating table, particularly in view of the fact that their principals back in the capitals of the member-countries of the 25-nation grouping are at daggers drawn on certain aspects of the farm-protection structure.

The main message of what has happened so far as regards the Doha Round is that the level of ambition pitched for the Round has not been matched by the political will and determination of some of the leading players to attain the end, a task which has been made doubly difficult by the fact that the developed economies must concede more ground than the poor if a fair and equitable framework is to be devised for the promotion of freer world trade.

What makes the outlook for the Doha Round even more critical than it is today is that the insufficiency of political will has remained more or less unimpaired despite the fact that it has been identified as the main problem for some years now.

Indeed, some may even say that an element of disingenuousness has crept into the deliberations on the multilateral trade negotiations with national leaders not hesitating to make promises and assertions projecting a rosy picture of the future knowing full well that what they are saying is not worth the paper the statements are printed on.

As effective examples, the statements issued at the Gleneagles and St. Petersburg summits of the G-8 can be cited; they fuelled hope for breakthroughs which of course did not materialise.

Same theme

Both Mr Lamy and his predecessor, Mr Supachai Panitchpadki, have harped on a common theme — that the rich economies should go the extra mile to make compromises in the interests of free and fair international trade, especially when the focus of the Doha Round is on Development, which in turn would make it easier for the developing countries to make their own concessions.

One cannot resist the temptation to quote from Mr Panitchpadki's July 28, 2005 statement made to the WTO Trade Negotiations Committee in Geneva, in which he said: "As I have said before, what we need urgently is not just a change of gear in these negotiations but also a change of attitude and approach. The time for identifying options is gone; the time for choosing among them is here. This calls for leadership, not just to make declarations but to make decisions.

"We need continuous Ministerial involvement so that participants move beyond rhetoric and repetition to a more frank dialogue about their key political needs and what they can contribute if these needs are met. And leadership must be directed towards concrete, specific results."

If this is too tall an order to be met by the rich economies, clearly there is no future left for the WTO itself leave alone the Doha Round.