The failure to complete the Doha Round will inevitably lead to a dilution of the WTO and the rule of law

Doha Round is dead, long live multilateral trade negotiations. That seems to be the new mantra in trade lingo.

It is not surprising at all that even the most ardent optimists have given up on the Doha development round of trade talks under the aegis of the World Trade Organization (WTO).

Even as the last flicker of hope is in the process of getting extinguished, time has come to take stock of the future of multilateral trade and indeed of the WTO itself. What went wrong in the round of talks that promised so much and has delivered so little? Not to be overlooked is the fact that all the 153 member countries are outwardly at least professing their commitment to the Doha Round.

Such commitments have, however, been symbolic. They have not been enough to take the talks substantially forward. The Doha Round of trade talks having an ambitious development component was launched in November 2001 in the Qatari capital soon after the terrorist attack on the U.S. With its emphasis on rule-bound multilateral trade, the Doha Round aimed to bring about stability and orderliness in world trade and thus provide an antidote to the chaos and uncertainty and nervousness that had begun to afflict the global economy. It sought to enable poorer countries export more by gaining greater access to developed markets while it was expected that the latter would reduce their various subsidies, “market support” programmes and so on that distort global trading rules. However, during the last ten years, the talks have missed many deadlines. Last year, the G20 countries urged a completion of the Doha Round by the end of this year (December 2011). That, of course, seems highly implausible now.

WTO's Director-General Pascal Lamy was not saying anything new when he said recently that the Doha Round talks had reached a deadlock. Rather than pitch for what seems to be a lost cause — the completion of the Doha Round within a timeframe — the accent of Mr. Pascal Lamy and others with a vested interest has now shifted to emphasising the advantages of multilateralism.

Among the points the WTO Director-General made during his recent visit to Delhi are:

(1) All member countries (of the WTO) should continue to repose faith in multilateralism. Government should recognise the contribution of multilateral trading during the recent crisis, through smooth flow of goods and services between countries and peaceful settlement of trade disputes, to capacity building in developing countries.

(2) At a time when the global economy is limping towards recovery and many countries are deep under sovereign debts, the multilateral trading system could be “the only tool to fight poverty, generate employment and create jobs”.

(3) The WTO is an insurance policy against protectionism and it did work during the crisis. But over the last several years the Doha Round is inextricably linked to the WTO. If the Doha Round prolongs, there is a risk of the WTO itself losing its credibility.

A multilateral trade agreement governed by rules and procedures will give member countries access to WTO's highly acclaimed disputes settlement body through which the smallest member country can direct the richest to stop trade distorting practices. The failure to complete the Doha Round would inevitably lead to a dilution of the WTO and the rule of law which the organisation has helped foster in international trade. The sad fact is that despite member countries being fully aware of the risks to world trade in allowing the Doha Round to lapse, nothing much can be done to resuscitate it at this stage. Many countries have contributed to its failure by refusing to work out a fair package but a large part of the blame should vest with the U.S. and a few other rich countries.

Time has come to look beyond the Doha Round. Trade ministers from all the 153 member countries will meet in Geneva between December 15 and 17 to draw a map for sustaining the multilateral system in future. Will that be an occasion to officially call off the Doha Round?


Look beyond DohaSeptember 13, 2011

The WTO — credible stillSeptember 11, 2011