The Future for the Doha Round

The July 2008 WTO talks were supposedly the ‘last chance’ for the Doha Round and their collapse was a major setback. Its implications extend beyond the fate of the negotiations, raising concerns about the role of the WTO and its ability to steer a purposeful course at a time when rapid geo-political and economic change is altering the complex balance of power between its members.

Prospects for success

Prospects do not look promising. US Presidential elections rule out the resumption of the talks before spring 2009 at the earliest. The European Commission elections are scheduled for 2009 and by then India must also hold elections.

The expiration of the U.S. president’s trade negotiating authority on June 30, 2007, raised the prospect of longer delay.

If and when talks do finally resume, the identities and priorities of a number of leading trade negotiators will have changed. The international economic climate will also be different. With this in mind, it is unlikely that the talks will be able to start where the broke off, and even if they did, there are no reasons to believe that they would yield any new decisive breakthroughs.

Alternatives to the Doha Round

Even without a conclusion to the Doha Round, the WTO continues in business and the Uruguay Round agreements remain in force. Three sets of developments will influence the trade policy environment for developing countries, including for agricultural trade, in the coming years.

The race to regional trade agreements

With the failure to secure a final agreement on Doha, it is likely that there will be a rise in bilateral trade agreements and there has already been evidence of this. For example, less than a month after the collapse of Doha, India signed a regional trade deal with the ASEAN group of Asian countries. India is also currently negotiating a Free-Trade Agreement with Australia. This development is likely to be of great concern to developing countries, as the powerful countries like the US, Europe, China and India might find it more advantageous to negotiate bilateral agreements in which they can apply more pressure on a single trading partner.

Litigation

Countries may seek to achieve through litigation what they failed to achieve through negotiation. Such action could spark a tit-for-tat response from other countries, placing immense pressure on the WTO’s dispute settlement mechanism. There is also a fear that continued drift in the Doha Round negotiations will foster broad scale neglect of the multilateral trading system, causing irreparable harm to the WTO’s credibility as a negotiating forum.

On climate change, for example, some in the United States and Europe want to impose "green tariffs" on goods from countries that aren't reducing their carbon emissions fast enough (read: China and India). In the absence of clear rules, China and India would have plenty of leeway to challenge such tariffs, putting WTO tribunals in the terribly awkward position of having to decide: Are such tariffs illegal, meaning that free trade trumps saving the planet? Or, if the tariffs are legal, should the Chinese and Indians have the right to slap duties on goods from Western countries, which they blame for creating the global warming problem in the first place?

Doha-light

Alternatives to Doha

The WTO is about more than simply trade negotiations. It needs a work programme to improve the functioning, efficiency, inclusiveness and transparency.

Resources:

Chatham House, After the Doha Debacle: What next for the global trade system (PDF), 2008
This briefing paper argues that the July 2008 Doha talks is a symptom of deeper institutional problems in the WTO, as it struggles to adjust to global economic change. At state are not only prospects for a further push to open world markets, but the primacy of the WTO as the maker and enforcer of the multilateral rules that underpin the international economic order.

The Economist, Beyond Doha, 2008
Informative article that discusses the collapse of the Doha Round and wider implications this poses for the multilateral trading system

ODI, The WTO Doha Round Impasse: Implications for Africa (PDF), 2008
This briefing paper discusses what is on the table in the latest WTO Round and how such a global compromise would affect African countries It also asks what African countries require to benefit from international trade, and the extent to which these issues can be addresses by the WTO.