The Hindu Business Line : No deal

The collapse of the G-4 talks on the Doha Round in Potsdam was not unexpected in view of the logjam on issues of farm subsidies and market access. Even so, since Ministers, as opposed to hard-nosed trade officials, were involved in the parleys, a surprise initiative or two was not ruled out. But that was not to be. Particularly worrisome is the seeming finality of the positions taken by the two camps that spells disaster for the Doha Development Round.

The US Trade Representative, Ms Susan Schwab, dismissed the proposals made by Brazil and India as being unhelpful, "in particular with regard to opening markets to manufactured goods," adding, that what was put on the table "would not have generated new trade." Importantly, for the first time perhaps following similar G-4 meetings, Washington and Brussels put a united face against India and Brazil. This was clearly manifest in Ms Schwab's statement that while the rich were prepared to make `significant contributions', there was "a lack of flexibility, indeed a rigidity" of the "advanced developing countries". The US and the EU are entitled to this view but, of course, it is totally different from that held by the other side, the Brazilian Foreign Minister, Mr Celso Amorim, saying in no uncertain terms that "it was useless to continue the discussions based on the numbers that were on the table." He added that Brussels and Washington had come to Potsdam with their minds made up on how much they would offer.

Since both Mr Amorim and the Commerce Minister, Mr Kamal Nath, have said openly that the G-4 is `dead', and since all the four countries also said that there is still hope for the successful conclusion of the Doha Round, it stands to reason that negotiations will have to be conducted by other means, possibly at a larger forum involving more WTO members. Indeed, before the Potsdam meeting, some developing countries had aired their suspicion of `secret deals' being struck by the G-4 to get the Doha Round talks moving.

This apart, the other big question is whether the time has come to dilute the `single undertaking' condition, which stipulates that nothing is agreed till everything is agreed. Some observers see this as a troublesome impediment to forging piecemeal agreements, which could create conditions for accords in other, more complex, spheres. Since the Uruguay Round took more than eight years to see the light of day, the Doha Round (kicked off in November 2001 with an initial deadline of January 2005) probably still has some hope. The road ahead is, however, difficult because not only have the ground conditions changed beyond recognition, but also as the the rich are not readily forthcoming with major concessions that is the sine qua non of a development round.