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A new deadline for Doha?

The recent declaration after a meeting of trade ministers and negotiators of six key countries at New Delhi may not mark the breakthrough that the WTO members as a whole were hoping for to put the derailed Doha round back on track. Yet the degree of optimism evinced by representatives of India, Brazil, the United States, the European Union, Japan, and Australia to facilitate the completion of the talks by the end of 2007 is significant. An immediate, salutary inference is that, despite the lengthening odds, negotiators who have been relentlessly pursuing the multilateral trade agenda have not given up hope. The Doha development round that began in 2001 has had a chequered history. In July last year, talks foundered on the seemingly intractable issues connected primarily with agriculture. India, Brazil and certain other large developing countries resisted demands by the U.S. and the EU that they lower their tariffs without insisting on a quid pro quo from the developed countries by way of a substantial reduction in their domestic subsidies and agricultural tariffs. At that time WTO Secretary General Pascal Lamy had identified a triangle of initiatives on which the future of the Doha round depended: the U.S. should agree to a deeper cut in its domestic farm support, the EU to an increased market access (by lowering tariffs), and the developing countries to a lowering of industrial tariffs. Those have remained very much the same with each side waiting for the other to move first.

Given the past record, nobody is betting on the deadline of December 2007. There are still major obstacles to be overcome. The U.S. President's fast track authority to ratify trade agreements ends in June. Although the American trade representative is hopeful of a further extension with bipartisan support from the Congress, the outcome remains unclear. Official espousal of free trade in the U.S. is often offset by acts of creeping protectionism. However, among all WTO member countries there is a better appreciation of the stabilising effects the multilateral trading system has on world trade and the global economy. Besides, a breakthrough in the Doha round will help in a more orderly conduct of trade by way of strengthening the already impressive disputes settlement mechanism of the WTO. Commerce and Industry Minister Kamal Nath has made India's stand very clear once again — the concerns over the livelihood of farmers in developing countries will not be compromised. Along with other developing countries, India would do well to focus on the development aspects of the Doha round as much as on tariff cuts to boost world trade.

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