Is The Doha Round At An End?

By David Jessop

News Americas, LONDON, England, Weds. Jan. 6, 2016:

Unlike the recent climate change talks in Paris, or even the late September global agreement on Sustainable Development Goals at the UN, despite its equal importance, the outcome at the World Trade Organization’s (WTO) Tenth Ministerial meeting in Nairobi, was scarcely mentioned in the Caribbean media.

This is unfortunate as the conference marked the moment when the developed and the developing world formally parted company over the Doha development agenda with the implication that the shape of world trade may change significantly to the detriment of future opportunity for the region’s exporters of goods and services.

By way of background, in Doha in November 2001, all WTO member states agreed to negotiate new world trade rules in a manner that would see in a single agreement, tariffs and other trade barriers reduced in ways that particularly helped developing nations.

Since then much has changed as new global and national economic and political imperatives have emerged. This has meant that despite progress being made on the detail, every Ministerial meeting from 2008 on has ended without any consensus on how to achieve an all-embracing single agreement that would meet the requirements of all developed and developing countries.

The consequence has been a sort of stalemate with, as an alternative, large nations negotiating bi-regional and bilateral agreements with economically attractive groups of nations or with individual states that are prepared offer freer trade in exchange for new economic opportunity and rapid growth.

At the Nairobi ministerial however, something very different happened: at the suggestion of the US and Europe – with the apparent acquiescence of Brazil and possibly others – it was suggested that the idea of a single development round should be abandoned and a new approach taken to global trade negotiations.

The consequence was an agreement to disagree, encapsulated in paragraph 30 of the post conference declaration: ‘We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations.’

Although hedged around by the language contained in the declaration’s preceding and subsequent sections, which suggested that there was a strong commitment by all members ‘to advance negotiations on the remaining Doha issues’ and that work agreed should ‘maintain development at its centre,’ there was no disguising what paragraph 30 meant.

To emphasize the point, the United States Trade Representative, Ambassador Michael Froman, issued a statement following the meeting which appeared, in US eyes at least, to declare the Doha Round dead.

In it he said: “Our work in Nairobi marks a turning point for the WTO. Members agreed on a series of important outcomes on agriculture and development, and very importantly, started a new phase in the WTO’s evolution … Members engaged in honest and focused conversations on the limitations of the Doha Development Agenda framework. While opinions remain divided among the WTO Membership, it is clear that the road to a new era for the WTO began in Nairobi… As WTO members start work next year, they will be freed to consider new approaches to pressing unresolved issues and begin evaluating new issues for the organization to consider.”

Although his remarks prefaced his more positive views on the specific outcomes of the meeting – new rules on export subsidies, export credits, state trading enterprises, and food aid; an agreement on information technology; priority being given to the interests of the least developed countries; and special and differential treatment remaining an integral part of the process – Ambassador Froman made clear that the US was now looking for a “next phase in the evolution of the WTO and the development of the global trading system”.

Since then, some developing-country politicians have hit back, telling journalists that as far as they are concerned, the substance of the Doha Round would continue to be negotiated. Amina Mohamed, the Kenyan chair of the meeting and Kenya’s Cabinet Secretary for Foreign Affairs, told a press conference that the language of the Nairobi Declaration specifically prioritized outstanding Doha issues, and observed that no new issues could be taken up unless all WTO members agreed.

That said, anyone who is realistic will recognize that any formal agreement to disagree in a consensus based system must mean that any possibility of a single undertaking on the Doha Development agenda is now at an end.

It also implies that the US and Europe, possibly together with some of the world’s advanced developing nations will now seek to promote a dialogue within the WTO about new and limited forms of agreement, and will want to debate how negotiations are organized.

More than anything else the agreement to disagree in Nairobi is a reflection of the radical changes that have taken place in the last decade in location and exercise of global economic power.

Not only has the emergence of large developing economies including China, Brazil and India changed the dynamics of global decision making, but it is clear that like the US and Europe have rightly become just as determined to use international mechanisms in their own interests, working where these coincide, with others nations.

The effect has been to bring into question the future role of the WTO and once the dust has settled will likely set in train a fundamental discussion about how a new trade policy approach might be developed that takes account of the interests of developed and advanced developing economies while finding a place for very small economies.

Although many nations in Africa, the Pacific and the Caribbean will now want to fight the idea that the Doha Round is effectively dead, this may be a moment for reflection and new opportunity for the region. That is to say, a time for the Caribbean to think carefully about how it might couple any such approach with a position that better serves its long term trade interests in relation to services, market opening, and difficulties in implementing economic integration.

David Jessop is a consultant to the Caribbean Council and can be contacted at  david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org.