How flexibility can salvage Doha
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A successful agreement in the Doha round is within reach, but it could slip through our fingers unless a handful of major developed and developing countries demonstrate their willingness to confront difficult choices. If this once-in-a-generation opportunity is missed, the price would be paid primarily by the poorest people on the planet.
Last month, leaders of the 21 Asia-Pacific Economic Co-operation economies – developed and developing, representing almost half of world trade – met at the Apec summit in Sydney. All 21 pledged to exercise “the political will, flexibility and ambition to ensure that the Doha round negotiations enter their final phase” and called on their trading partners to do the same.
In Sydney, and more recently before the United Nations General Assembly, George W. Bush, US president, emphasised the importance of shared responsibility in the World Trade Organisation, where agreements require the consensus of all 151 members. The reality of the Doha negotiations is that no single country can make it a success, but a handful of countries unwilling to make the necessary contributions can bring the round to a halt. We must avoid that.
What are the contributions that the major trading countries must make? The leaders in Sydney spelled out the path we must follow: “real and substantial openings in agriculture, industrial products and services” and “real and substantial reductions in trade-distorting subsidies”.
In Geneva right now, Doha round negotiators have draft texts in agriculture and industrial products that offer the only reasonable prospect of meeting the Apec leaders’ standards. These texts were prepared by the chairs of official WTO negotiating groups, whose aim was to draw leading members out of their comfort zones. In other words, all the leading nations will be faced with making additional contributions – involving tough political decisions.
The negotiators certainly succeeded with regard to the comfort zones. The question has become: will each of the leading countries, including the major emerging economies that are likely to gain the most from the round in the short term, take the difficult steps necessary to reach an agreement?
The US has already taken a step. When asked directly and publicly by the chairman of the agriculture negotiating group if we were prepared to negotiate within the range of subsidy reductions in his text, we said “yes”, provided that the other leading nations did the same with respect to new market access for agricultural and industrial goods.
Lamentably, most of the other leading members have yet to state their intentions. Even worse, some have signalled an unwillingness to negotiate within the texts’ ranges or a desire to nullify market-opening commitments through loopholes.
Now is the time for the other leading nations to step up. The European Union has. Singapore, Chile, Mexico and others have. Members with the highest tariffs and other barriers to agriculture – Japan, Switzerland and others – should state openly their agreement to negotiate within the chairman’s range for agricultural market access.
The most advanced emerging economies – Brazil, China, India, Argentina and South Africa – should be equally clear that they will negotiate both agricultural and industrial tariff reductions within the ranges specified for advanced developing countries by the chairmen of those negotiating groups.
Even with these commitments, there are many tough issues still to be addressed, including an ambitious outcome on services and negotiations on trade facilitation, rules and trade capacity building. These must be negotiated in the same spirit of creating a comprehensive agreement that opens markets for all members of the WTO.
The potential benefits are clear. Expanded trade and investment offer a more durable way to reduce poverty than is achievable through aid alone. Since the burden of tariffs falls disproportionately on the poor, reducing tariffs is most important for the least well-off. Expanding global markets also gives farmers and workers more chances to offer their products and services.
We are at a critical point in the negotiations. To move forward, it is critical that all WTO members signal that they will join the US in negotiating within the ranges and flexibilities in both texts.
This is a binary choice – yes or no. “Yes, but” or “we will be flexible” or “you go first” are no longer answers that will drive the Doha round to a timely conclusion. Anything short of this commitment should turn the spotlight on any nation risking the round.
But if the other major developed and developing countries are ready to pledge to negotiate within the market access and subsidy ranges on the table in Geneva, we have a shot at reaching the goals set out when WTO members launched the Doha round. We can do it – but only if we act together and now.
The writer is the US trade representative
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