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EDITORIAL: The death of Doha?
(Japan Times Via Acquire Media NewsEdge) Aug. 2--For seven years, international negotiators have struggled to reach agreement on a deal that would lower barriers to trade and investment. From last week to early this week they held a round of talks that was widely considered "do or die." Failure to conclude a deal was likely to kill the effort.
The threat of collapse did not spur negotiators toward compromise. After nine days of intense discussions, the talks ended without agreement. The global trade order continues, but great damage has been done.
Launched in 2001 in Doha, Qatar, this round of talks was intended to address the concerns of developing states; they complained that previous rounds focused on developed country priorities. Topping their list of concerns was access to agriculture markets in the developed world, one area in which the world's poorest countries can compete but are often denied the opportunity as a result of protectionism.
Those political barriers have proven formidable. Discussions broke off at a ministerial meeting in Cancun, Mexico, in 2003, in Hong Kong in 2005, in Geneva a year later and in Potsdam, Germany, last year. Skeptics point out that each of those meetings was "do or die" for the Doha Round, yet each failed and discussions continued.
Yet this time the Cassandras may be right. The United States is revving up for a presidential election and congressional approval of any deal is virtually impossible. The next administration may demand additional scrutiny of any agreement struck now: Democratic Sen. Barack Obama has said he wants labor and environmental standards included in any new accord, a potential deal-breaker.
Japan's government is in no position to make important concessions on agriculture, and neither is that of India -- a key developing nation -- that will hold its own elections next year. Europe is not united when it comes to concessions on agriculture.
Unsurprisingly, the nine days of talks failed to produce an agreement. After getting pledges from the U.S. to cap support for American farmers -- Europe and Japan would be expected to follow suit -- many thought a deal was in reach. But developing countries then introduced a new obstacle: Ironically, they expressed the wish to protect their own agriculture sectors from foreign competition. They want to be able to implement safeguard measures that would keep their farmers from being overwhelmed in the event of import surges.
Developed countries protested that such measures are not allowed under current trade rules and permitting then would constitute a step backward.
Apart from the particulars of the disagreement, the dispute reflects fundamental changes in way international trade negotiations occur. First, there is the sheer size of such negotiations. There are now 153 members in the World Trade Organization (WTO). That makes talks messy and drawn out: A few members cannot make deals on behalf of the whole.
Second, and more important, is the assertiveness of emerging economies. China and India in particular are increasingly vocal in these talks. Openness and integration into the global economy have given them new clout in trade negotiations and they have not been reluctant to use it. That is not to say such behavior is unjustified: All governments should assert their interests in such negotiations. But their new strength changes their perspective on the value of such talks. Delhi and Beijing may now prefer bilateral negotiations in which they can even more aggressively press their interests. In other words, their commitment to multilateralism may be flagging -- at least once their other concerns have been addressed.
The collapse of the Doha Round does not undermine the WTO. Previous trade agreements remain in place and the organization's dispute settlement mechanism, arguably its most important feature, continues to function. Yet even though negotiating parties refuse to concede the round is over, absent some great awakening in the next few weeks, the progress that has been made in the last several years will be lost. The bargains will be undone and negotiations will likely resume with a blank slate.
Meanwhile, governments will move forward with bilateral and regional trade deals. That has the potential to create a patchwork of trade rules and to introduce distortions in trade relationships. This will make it harder for companies to operate in various markets and deny producers in poorer and weaker nations the opportunities to do business. Economists estimate the failure to reach agreement could cost hundreds of billions of dollars in lost economic growth. That does not include the potential impact of a rise in protectionist sentiment as economic woes spread. And prospects for other multilateral agreements, such as those dealing with climate change and energy security, are likely to be impacted by the failure to conclude a trade deal. Even if Doha is not dead, great damage has been done.
To see more of the Japan Times or to subscribe to the newspaper, go to http://www.japantimes.co.jp/.
Copyright (c) 2008, Japan Times, Tokyo
Distributed by McClatchy-Tribune Information Services.
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