The Week in Europe

By David Jessop

 

In a matter of weeks it will become clear whether the Doha Development Round at the World Trade Organisation (WTO) will either move forward or remain stalled, possibly until well into 2005. 

 

Since last September and the collapse of the WTO Ministerial meeting in Cancun, Trade Ministers from around the world have been engaged in a seeming merry-go-round of meetings. In these, groups bringing nations together, often in overlapping alliances, have been struggling to achieve a basis for consensus. They have been trying to arrive at an outline agreement on many complex and interlocking issues relating to agricultural subsidies, tariff reductions, market access and other matters necessary to progress the process of global trade liberalisation.

 

At these meetings, Ministers and officials have been discussing proposals that try to address the reasons why the Cancun meeting failed. They have been trying to find solutions acceptable to all, but accommodate some of the requirements of the two main groups of nations that halted progress last year. The first include countries such as Brazil and India and others in the G20 that require the developed world to halt their agricultural subsidies and enhance access for their agricultural goods.  The second is the G90 that brings together the smallest and poorest nations including the least developed and the African, Caribbean and Pacific group (the ACP), which require special and different treatment and trade solutions that cause development.

 

The process of revitalising the round began in January when the US Trade Representative, Robert Zoellick, suggested that all WTO members should seek to make progress by the end of July. His initiative was widely welcomed in public. However, in private reaction was hedged with doubts about his ability to deliver any agreement within the US in an election year on matters that touched on politically sensitive issues such as agriculture.

 

Then in May, the European Trade and Agriculture Commissioners Pascal Lamy and Franz Fischler, sent a joint letter to all their WTO counterparts outlining three areas in which the EU was ready to make further concessions. They indicated that the EU was ready to discuss the removal of export subsidies as long as any agreed WTO package relating to agriculture was balanced. They suggested also that the EC was prepared to be flexible on the so-called Singapore issues (investment, competition, transparency in government procurement and trade facilitation) by recognising that consensus was only likely on trade facilitation. 

 

The two Commissioners also proposed that the round should include a form of special and different treatment through concessions for the poorest and weakest WTO members: essentially the G-90. Here the EC proposed that these nations should not be required to further open their markets but should benefit from improved access to developed nations and the wealthier emerging markets for all agricultural and industrial products. 

 

In response the US, Australia, Mexico and Japan welcomed the initiative as did developing nations such as those in the Caribbean, but others most notably in emerging markets, saw the move as an attempt by Europe to create at their expense, new categories of nation with preferential arrangements. 

 

More recently still the US has put forward its own proposals for developing countries that would enable some derogation from their proposed tariff reduction formula that is meant to apply to all. However, it seems that this exception would apply only to the least-developed nations that might designate products that are sensitive and wish to protect. So far this offer has not been extended to other developing countries in the G90 group. 

 

Many other key meetings have also taken place. The G90 have developed a single position that may well influence significantly the ability of the WTO membership to achieve any framework agreement this month.  

 

Also of significance have been virtually secret negotiations within the Five Interested Parties Group consisting of the US, EC, Australia, Brazil and India, which have been heavily criticised for giving the impression that the developed world and some emerging nations are trying to reach an accommodation irrespective of the wishes of other members of the G20 or the G90.

 

The result is that in Geneva the air of official optimism is tempered by individual uncertainty. 

 

According to the Director-General of the WTO, Supachai Panitchpakdi, WTO members are "within striking distance" of achieving their target of an outline agreement by the end of July as the main negotiating groups had, he suggested,  "made tangible progress in most areas".  

 

But others are not so sure.  While significant progress has been made since January there is among many officials a sense that time is not on anyone’s side. 

 

If there is no clear agreement by the end of this month it is likely that there will be no further movement forward until at least the middle of 2005. There are three overriding reasons for this. The US presidential race shows every sign of being very close and any framework agreed within the WTO that that is perceived as threatening to US agriculture is likely to be set aside by an Administration desperate to hold on to office. Secondly the two key international figures who have been driving the process forward for the developed world, Pascal Lamy in Europe and Robert Zoellick in the United States, both demit office this year. And thirdly, the longer-term strategic agendas of India, China and some other emerging nations suggest that they may see value in not making concessions, preferring to defend their industrial and agricultural base for a while longer as they continue their economic ascent, they hope to super power status.  

 

The timetable too is impossibly tight. Some reports suggest a draft framework for discussion is expected around July 9. Then ministers from the US, European Union, Brazil, India and Australia, are due to meet in Paris on July 10-11, and a ministerial meeting of the Group of 90, will follow in Mauritius on July 13-14. All have as their objective, agreement on the endorsement of the framework agreement at a WTO General Council meeting on July 27/28.

 

The Doha Development round is supposed to end in December and while some argue that a successful framework deal this month could pave the way for quick completion of negotiations next year, others see little practical prospect of conclusion before 2006 or even 2007. A consensus this month on how to move forward would be welcome but still seems far from likely.

 

David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]

July 2nd, 2003


        	
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