The Hindu Business Line : WTO talks: A standoff again?

The resumption of the Doha Round negotiations in Geneva on September 3 is seen as the last chance for the WTO to get the round going and, as trade analysts around the world see it, could give a boost to the development aspect of multilateral trade. This is the expectation driving the negotiations today but, such optimism has, in the past, been repeatedly dashed against the rock of national interest — mainly that of the developed countries which, according to the Doh a Declaration of 2001, are expected to concede more ground than the poor economies in the ongoing negotiations. As is his wont, the WTO chief, Mr Pascal Lamy, is optimistic about the outcome of the negotiations, but his hopes may remain unfulfilled given the rigid positions adopted by the negotiating parties on the key issues of agriculture and non-agricultural market access (NAMA).

In fact, the latest twist in the Doha Round bargaining is that the NAMA issues have suddenly taken centre-stage, nudging agriculture to secondary position. Thus, New Delhi, which has played an important role in opposing the domestic support and export subsidies extended by the US and Europe to their farmers, has, in its latest negotiating stance, focussed on the unacceptability of the draft circulated by the chairman of the NAMA WTO negotiating committee. Its stand is that unless the draft is altered to take into account the interests of the developing countries, there is little possibility of the talks producing results in a few weeks. Admittedly, a revised draft is in the works, and the Canadian Ambassador, Mr Don Stephenson, who heads the NAMA committee, may after all produce a rabbit out of the hat. This would certainly be a boon for those who would love to see the Doha Round concluded, but even if this were possible, the agriculture nut would be a difficult one to crack. As the French Finance Minister, Ms Christine Lagarde, said recently, she did not see a Doha accord because “the gap among the parties is too wide”. Briefly, the US has been asked by the developing countries to cap its domestic support programme at around $11 billion, the amount spent last year, but Washington has formally pitched its support ceiling at $22.5 billion, with an informal figure of around $17 billion being mentioned. This is considered unacceptably high by countries such as India and Brazil.

With elections around the corner in the US, Washington will probably hesitate to take steps to reduce the farm domestic support level to below-politically-expedient levels, which in fact appears very much like sounding the death knell of the Doha Round. This is the reality facing the WTO — one that can be altered only if countries such as Brazil, India and South Africa, among others, agree to tone down their demands somewhat. And this does not appear to be on the cards at the moment.

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