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Doha.Thmb.jpg Doha Development Round: Seven years of failure and uncertainty

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Writuparna Kakati | 23 Jun, 2008

Now in its seventh year, the Doha round of talks seem making no headway. The WTO (World Trade Organisation) launched it in 2001 and since then the talks have been continually stricken by disagreements, particularly over agriculture.

The stalemate between the developed nations (led by EU, USA and Japan) and the developing countries (G20 countries  represented mainly by India, Brazil, China and South Africa) have continued years after years making everyone wonder when the drama will come to an end.  

The WTO launched Doha Development Round with the underlying intent to lower trade barriers around the world, permitting free trade between countries of varying prosperity. But the round has been in a such deplorable state due to constant conflict of interests between the negotiators that, at present stage, the negotiation has largely become about agriculture and the stalemate around it. All other important aspects of negotiation such as industrial tariffs, non-agricultural market access (NAMA), and trade in services are on the sidelines. But still it seems that the possibility of the Doha round coming to an end is far away from reality.

The last developments in the Doha talk in 2008 is no difference. While the US has accused India of wrecking the negotiations by "working behind the scenes", countries like India, Brazil, Mexico and South Africa rejected the latest proposals put forward by chairs of the WTO negotiating groups on agriculture and industrial products. In India, the apex bodies of the country's industries, trade and commerce has not received favorably WTO's revised proposals on subsidy reduction, duty cut and market access.

How India and other developing countries  will be affected if the revised WTO draft modalities of February, 2008 are included in the WTO charter?  Have a look at the envisaged revised modalities in brief-

  • Elimination of all forms of exports subsidies and improved disciplines on export credits, food aid and export state trading enterprises;
  • Reductions in overall trade distorting domestic support (OTDS) in the range of 50-85 per cent using a tiered formula, some new (modest) disciplines on commodity specific trade distorting domestic support and green support; and
  • Tariff reductions in the range of 48-73 per cent, again using a tiered formula which requires deeper cuts for higher tariff.
Many developing countries led by India strongly believe that he reductions are all for developed countries. Reacting to the revised WTO draft modalities, India's Commerce Secretary G. K. Pillai commented "If our national interests are not protected in both agriculture and NAMA, there will be no deal" while Commerce Minister Kamal Nath viewed " The text has ignored the core mandate of the Doha Round of less than full reciprocity in reduction commitments and comparability in ambition between NAMA and Agriculture."

Not only India,  many other developing countries feel that the latest Doha text is flawed with regard to eduction in farm subsidies and enhanced market access for industrial goods. While Brazil opposed the ranges of cuts proposed in the draft, Argentina, and South Africa along with India feel that text simply did not incorporate their proposals on the principle of less-than-full reciprocity.

Thus, it seems that the Doha round is going nowhere with a huge unfinished agenda. Have a look at how the round have been in a deplorable state right from the beginning-
  • 2001 ( WTO Ministerial Conference in Doha) : After the failure of the proposed WTO Ministerial Conference of 1999, the new round began in Doha (Qutar) with bickering and mistrust. Held under tight security, the meeting established key areas of work including  opening up non-agricultural market access (NAMA) mainly for industrial goods in developing countries and liberalizing agricultural markets in rich countries.  
  • 2004 (Geneva Talk): The U.S.A, EU, Japan and Brazil agreed to end export subsidies, reduce agricultural subsidies and lower tariff barriers. Developing nations agreed to reduce tariffs on manufactured goods, but gain the right to specially protect key industries.
  • 2005 (Paris Talk): Disagreement over small technical issues. The EU, US, Australia and India failed to agree on issues relating to chicken, beef and rice while France opposed moves to cut subsidies to farmers.
  • 2005 ( WTO Ministerial Conference in Hong Kong): Amid great protest, different countries reached a deal that sets a deadline for eliminating subsidies of agricultural exports by 2013.
  • 2006 (Geneva Talk): Disagreement over reducing farming subsidies and lowering import taxes
  • 2007 (WTO Ministerial Conference in Potsdam): Disagreement over  how to cut rich nation farm subsidies; Members fail to achieve a common objective in terms of opening up industrial and agricultural markets in various countries.
In the above scenario, many fell that the Doha round of multilateral trade negotiations is not going to end easily. There is no doubt that the WTO's aim to create a fair and market oriented trading system is an honest one, but there have been several constraints which need to be addressed properly to make the round successful. Transparency in export credit and investment, simplification of modalities, uncompromising attitude towards food and livelihood security, ration-wise domestic support, adjustment of disputes and, above all, sincerity of purpose and commitment - all these things require attention to achieve a common objective and make the round successful in the coming years.  
 
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