The Hindu Business Line : Hour of Truth for Doha Round

Even at this late stage of the Doha talks, there are no indications that the rich economies will follow in letter and spirit the Doha Declaration of 2001.

The clarion call has once again been sounded for the Doha Round, the WTO chief, Mr Pascal Lamy, saying yet again that “the hour of truth is very rapidly approaching” and that the “next few weeks” would probably be the “last chance” for governments to take the round to a successful conclusion. Mr Lamy has been making such statements almost ritually over the past year, the deadlines passing every time without any result of consequence. Thi s time too, the outlook is not encouraging with the opposing sides holding on to their positions, and waiting for the other camp to make concessions.

This time, however, Mr Lamy may well be correct, in view of the US Presidential elections next year and the Indian Lok Sabha elections slated for 2009. At this point in time, even the smallest concessions will become difficult to make, which would scupper further the chances of a successful conclusion of the Doha Round. As it is, there is little progress in the positions taken by the developing and developed economies on agriculture and industrial tariffs. In late October, the Union Minister for Commerce, Mr Kamal Nath, said that things had changed in the last two months and “there is much more convergence after the papers on agriculture and industrial products were circulated” by the chairmen of the two negotiating groups. This may be so, but the moot point is whether the “concessions” made by the main players have been large enough to bridge the gap between them which, today, seems as wide as ever. In agriculture, on crucial issues such as future caps on farm subsidy spending on the part of the US, the differences continue. As regards industrial tariffs, there has not been much progress, going by the reports from Geneva. Indeed, it is feared that even if an accord is finally hammered out in agriculture, it is in the non-agriculture market access (NAMA) sphere that the talks will stall. This is because the Doha Round is a “development” Round, which will have to be reflected essentially in the industrial tariff concessions made by the developed economies, of which there are no signs at the moment.

This, in fact, is the real problem affecting the multilateral trade negotiations. The Doha Development Agenda calls for the rich making greater concessions than the poor in lowering trade barriers, which means that the developed countries will have to accept smaller industrial tariff reductions by the poor economies in exchange for substantial cuts Washington and Europe will have to offer in areas such as farm subsidy spending and better market-access conditions for exports of the developing countries. Even at this stage of the Doha talks (the Round was to have been finalised by end-2004), there are no indications that the rich economies will follow in letter and spirit the Doha Declaration of 2001, which probably means that, barring a miracle, the Round is as good as dead.

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