A meeting of trade ministers under the aegis of the World Trade Organization (WTO) was held in Geneva in mid-December. On the eve of the ministerial meeting, there were very few expectations over the Doha development round.
Meetings of trade ministers are normally held once every two years to give crucial political direction to trade talks. This time, the only outcome that every one expected was that the meeting of trade ministers would finally and formally acknowledge, after ten years of tortuous negotiations, the Doha round of talks was going nowhere and that in its present form it is unlikely to reach a closure anytime soon. Therefore, there was no disappointment when the Geneva meeting ended without breaking the impasse. The communique at the end of the meeting acknowledged the fact that the Doha round was for all practical purposes dead. At the same time, it urged member countries to “more fully explore different negotiating approaches while respecting the principles of transparency and inclusiveness.” These words, like many forming part of declarations at previous meetings, do not amount to anything tangible. What is certain, however, is that without formally giving up their commitment to multilateral trade as embodied by the Doha round, each member country privately agrees that the Doha round is dead and to further trade links seek more practicable avenues such as bilateral and plurilateral preferential trade agreements.
The positive areas
The Geneva ministerial meeting did achieve something positive in certain other areas, however. It reached an agreement on government procurement and on streamlining the accession process for the least-developed countries. The trade ministers also admitted Russia — the only big economy that remained outside the WTO so far — and three smaller countries into the WTO. But as the lack of progress on development-related trade issues, the yawning gap between precept and practice continues to bedevil the WTO and its members.
The Doha round of trade talks launched in the Qatari capital ten years ago has had a chequered history. Moving in fits and starts, the talks reached a dead end in July, 2008, when another ministerial meeting, also in Geneva, collapsed in acrimony. The differences with the U.S. over a special safeguards mechanism for agricultural products had reached a boiling point. In India, the then Commerce Minister Kamal Nath was projected as one who stood up to the might of the U.S. “for the sake of marginal and subsistence farmers whose livelihood would be compromised by unbridled imports of agricultural products.” In much of the western press, however, Mr. Kamal Nath was branded as a deal-breaker, the one who put the Doha round to sleep.
Talks back on track
Now under Commerce Minister Anand Sharma, India has tried to put the multilateral trade negotiations back on track.
A mini-ministerial was held in New Delhi. But the deadlock in trade talks has persisted. One very basic point about trade negotiations, especially multilateral ones, ought not to be missed. Inherently of long durations, these tend to involve many political leaders from each country.
Also, even successful negotiations have outcomes that will be seen after many years. Taking these together, it is fairly certain that the trade ministers, who negotiate, will not be the ones to see the benefits of a concluded trade deal.
In the early years of negotiations however, commerce ministers and officials will have to deal with several pressure groups and lobbies. These partly explain why the Doha round was severely handicapped right from the start.
What next?
With all the failures behind it, it seems naive to even speculate on the resumption of the Doha round, leave alone its successful culmination. Yet, that is what all countries must wish for.
Failure to conclude the Doha round, at least at some future date, will lead to a further erosion in the authority of the WTO. That would be highly regrettable.
Apart from negotiations, the WTO has created fair and equitable machinery for overseeing the implementation of agreements, monitoring and surveillance, capacity building and dispute settlement. These have brought the rule of law to world trade and dispute settlement mechanism especially enables the smallest country to take on the world's biggest economy.
Preferential agreements
The WTO's initiatives in these have checked protectionism. It would be unfortunate for India if, as a consequence of losing its pre-eminence in negotiations, the WTO becomes less effective in these roles.
The failure of the Doha round has made many countries, including India, to enter into other forms of preferential agreements, either bilateral (India-Japan) or plurilateral (India-EU, India-ASEAN).
These are easier to conclude and the benefits from them can be reaped quickly. However, many trade economists feel that these would stand in the way of future multilateral agreements.
For almost the past decade of negotiations under the Doha round, if there is one point of agreement among countries, it is the less than stellar role of the U.S. Time and again, it has been alleged that the U.S. has been lukewarm in its efforts to move the discussions forward.
The U.S. naturally figures in any discussion on the future of the Doha round. Even a likely date of resumption of talks will depend on how soon a new administration gets into stride after the elections.
Already the U.S. is in an election mode and a new set of key officials dealing with trade may not be keen to restart a multilateral round of trade talks. That is why India's Commerce Secretary Rahul Khullar does not think it will be possible to start afresh before 2014.
