The Hindu Business Line : Stumbling over substance

The Director-General of the WTO, Mr Pascal Lamy, at the Trade Negotiations Committee meeting in Geneva late last week, has once again held out the hope for a successful conclusion of the Doha Round. The world knows that it is its job to do so, but it is also aware of the hurdles in the way of a successful outcome to the nearly seven-year-old negotiations, with the chances of the final spurt also ending in a stalemate.

In his speech, Mr Lamy focussed on “process” over “substance”, his considered view being that, although as far as substance is concerned more work needs to be done, matters had reached a point where “lack of clarity on process and sequence risks preventing us from making the last mile to prepare agriculture and non-agriculture market access (NAMA) modalities”. Pointing to the plight of the smaller delegations, which have been keenly watching their counterparts from relatively stronger economies in the developing worldtake on the rich, the WTO chief said “greater clarity and transparency on process and timelines” would help them view the immediate future with some understanding and confidence. Mr Lamy is right, especially at this juncture when a lot of work will have to be done between now and the promised Ministerial meeting on July 21. But it is also clear that process cannot supersede substance because, ultimately, the Ministerial meeting will be a success or failure based on the substance placed before the Ministers. As of now, despite Mr Lamy’s optimism, there is not much substantive progress on the “substance” front. On the contrary, new hurdles have emerged which promise to be even stiffer to scale than old ones such as a reduction of the US farm subsidies bill, on which some movement forward has been made over the past couple of years. One of these new barriers is the “anti-concentration” stipulation in the revised NAMA draft text proposed by the developed economies under which poor countries cannot bunch “sensitive” tariff lines (attracting concessions) in one particular sector.

The basic stumbling block in the entire Doha Round negotiating process has been the unhelpful attitude of the developed economies on how much they should concede to the developing world to build a fair and equitable trading system. While a pro rata, proportionate approach has been ruled out by the Doha Development Round, Washington and Brussels are still harping on the give-and-take rule, which should ordinarily apply to negotiations between equals. In simple terms, to take one aspect of the negotiations, the security of the US and European farmers on the one hand and Indian farmers, on the other, cannot be placed on an equal footing when sacrifices have to be made, an axiom which though central to the Doha Round, has not yet been accepted by the developed economies.

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