Email this page

WTO Doha Round Suspended

On the 24th July, Pascal Lamy the Director General of the World Trade Organisation (WTO) announced in a press conference “I believe that the only course of action I can recommend is to suspend the negotiations across the Round as a whole …”.

This announcement means that intense negotiations being undertaken by 150 countries at the WTO to liberalise trade in agriculture, industrial goods and services will stop. When they will start again is anybody’s guess.

The 150 countries at the WTO have been negotiating the Doha Development Round which was launched in November 2001 in the city of Doha in Qatar. The Ministerial declaration provides a mandate for negotiations on a range of trade areas of which agriculture, industrial goods and services are the main pillars.

At its heart, the Doha Development Round is meant to address some of the imbalances in international trade so that the developing and least developed countries can see tangible economic and social benefits from trade. As the preamble of the Doha Declaration says “The majority of WTO members are developing countries. We seek to place their needs and interests at the heart of the Work Programme adopted in this Declaration”.

Since 2001 the most contentious issue in the Doha Round has been agriculture. The agricultural policies of the European Union (EU) and United States of America (USA) are highly protective and seek to support their farmers through tariffs on imports and domestic subsidies that can boost exports. These policies limit the access developed and developing countries have to the EU and USA markets.

Last minute talks called by the Director General Pascal Lamy over the weekend of 22nd – 23rd July in Geneva, were designed to reach agreement on the issues of market access and domestic subsidies in agriculture. Hopes were set on a compromise being reached amongst the G6 countries comprising Australia, Brazil, EU, India, Japan and the USA. In the press conferences given following the breakdown in talks, the main disagreement appears to be between the EU and USA.

Mr. Peter Mandelson, EU Trade Commissioner is in no doubt that the USA position on domestic support in the form of farm subsidies, was the reason for failure. He informed the press that the lack of new offers from the USA to reduce farm subsidies meant there was little point in continuing talks.

“In deciding to withhold any indication of their own flexibility, the United States has judged that it would be better for the process of negotiations to be discontinued at this stage. Actions have consequences, and this action has led to the round being suspended”.

Ms. Susan Schwab, United States Trade Representative blamed the collapse of the talks on the limited new offers for market access. In particular, the EU was singled out for its reluctance to open markets on key agricultural products such as beef.

Susan Schwab, U.S. Trade Representative

“While the US was prepared to do more, yesterday’s focus on the loopholes on market access, on the layers of loopholes on market access revealed that a number of developed and advanced developing countries were looking for ways to be less ambitious”, said Schwab at her press conference.

Mr. Kamel Nath, Indian Minister for Commerce & Industry who was taking part in the G6 meeting, was clear that failure was inherently based on what he termed “a gap in mindset”.

“Until and unless we are able to bridge this gap in mindset, there seems to be no future of this round. … The content of this round has to demonstrate new opportunities of market access for developing countries into developed country markets”.

Kamel Nath, Indian Minister for Commerce & Industry

Minister Nath is clear that structural flaws in global trade, especially in agriculture, should be the focus of the Doha Round. However, developed countries have been aggressively pursuing market access for their own companies in agriculture, industry and services.

“They say, you give us market access and if we get the market access of the kind we want, then we will correct the structural flaws. Then we will remove the distortions. There is no equity in that”.

The collapse in talks is seen by many developing country officials as a serious blow to economic growth and development. The types of market access available through the multilateral system are not available to developing countries through bilateral and regional trade agreements. As Mr. Celso Amorim, Brazilian Minister for External Relations stated in his press conference;

Celso Amorim, Brazilian Minister for External Relations

“There is no substitute for the WTO, there is no substitute for the multilateral trading system when it comes to disciplines, when it comes to subsidies, when it comes to things like anti-dumping. And that is why for developing countries especially but not only for them, the WTO is irreplaceable”.

Given the importance of the round to developing and least developed countries, it is perhaps surprising that these countries have not been directly involved in the final negotiations. The G6 represents four industrialised powers and only two developing countries. As one negotiator from a developing country recently explained to me “I have not been invited to any green room”. This refers to the exclusive negotiations that take place amongst key players in the WTO.

The Quaker UN Office (QUNO) has been working with developing and least developed countries to promote their interests in the Doha Round. We were asked in particular, to work on intellectual property issues related to the TRIPS Agreement and the temporary movement of service providers under GATS Mode 4. To ensure that equitable trade has a chance, it is important to stay committed to helping developing and least developed countries at the WTO to bring about the ‘change in mindset’ referred to by Kamal Nath. Duncan Wood who was director of QUNO from 1952 – 1977 wrote:

“If we believe in the necessity of worldwide institutions to meet the needs of the whole human family, we have a duty to support and encourage those who work for them, whether as delegates or members of the secretariat. We have to share with them our conviction that their work … is a worthwhile contribution to the achievement of human unity”.

Martin Watson, QUNO.
25th July, 2006