Every year, at the Davos gathering of the WEF, there is a discussion on the WTO — on the prospects of concluding the Doha Round, which is now 10 years in the making. This year, too, the drill was repeated but, not surprisingly, the Doha Round wasn't in focus.

This was probably because the eighth Ministerial of the WTO had just concluded in Geneva, and there was, therefore, nothing new to discuss regarding the Round that hadn't already figured in the December conference.

Even though the Davos meeting didn't have much to offer on the Doha Round, it did throw light on two allied aspects of the Doha problem which, seen dispassionately, affect seriously, the very concept of a flourishing multilateral trade regime overseen by the WTO. The first is, of course, the much-discussed subject of effective political support for a cooperative multilateral trade system, the absence of which has been at the bottom of the failure to conclude the Doha Round.

GLOBAL TRADE

Clearly, on this specific front, the outlook is very bleak indeed. Generally speaking, with the global economic forecast continuing to remain clouded for 2012 and beyond, no national political leader is prepared to swim against the tide and advocate an opening of the trade sluice gates, which could eat into domestic jobs.

Specifically, taking the US as an example, the US Trade Representative, Mr Ron Kirk, told a meeting in Davos that there could be no progress at the WTO talks on the Doha Round unless “the public supported global trade”; and that the current situation in the US was that “more and more Americans… believe that we have exchanged jobs for cheaper T-shirts and iPads”.

The WTO Director-General, Mr Pascal Lamy, played this tune in Davos when he said that a want of political will was withholding a global trade deal, adding, “You need a lot of political energy to do things multilaterally and it just isn't available. It's in short supply, just as it is in climate change.” Importantly, Mr Lamy went on to say that, instead of concentrating on the WTO talks, governments were focusing on bilateral and regional trade arrangements “such as the Trans-Pacific Partnership comprising the US, Australia, Vietnam, Peru and four more countries”.

POLITICAL DICHOTOMY

This, in fact, is the second issue which has been eating away quietly at the roots of the WTO's multilateral trade effort. Briefly, the efficiency of the Doha Round, if ever one is negotiated, will depend on its uniform implementation among the entire WTO membership. Bilateral and regional arrangements affect adversely the prospect of such uniform implementation.

Mr Lamy, one would like to believe, probably meant this when he urged national politicians to focus on a global trade deal. But then, at the subsequent Addis Ababa meeting of the African Union, the WTO chief declared categorically that there was “absolutely no contradiction between accelerating regional integration and deepening the multilateral trading system,” adding somewhat heroically, “Use multilateral trade negotiations and the WTO system as impetus for greater regional integration.”

(This article was published on January 31, 2012)
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