[WTO Talkes Doha Round] 'Big Picture' Blindness Dogs Doha Talks

from Forbes

With an end-of-June deadline looming, WTO ministers and senior officials meet in Geneva next week to discuss key elements in Doha Round negotiations. Time is running out for the Doha Round trade negotiations and governments seem unable to resolve their differences. One reason is that the consequences of success or failure are difficult to assess and understand.

WTO ministers and senior officials will try to reach agreement on key elements of a liberalization package for agricultural and industrial products and services. They face a wide range of choices. There are few grounds for optimism about the outcome, since participants have shown little readiness to make significant concessions to each other's views.

An element in the reluctance to take difficult decisions is the lack of measurable evidence of what is at stake in the round. Two recent World Bank reports have attempted to calculate the effects of a successful Doha Round on poverty in developing countries and on global welfare. Neither has proved very persuasive.

In a recent speech, WTO Director-General Pascal Lamy set out gains that could emerge from a successful Doha Round. He argued that the round is "deeper, larger and fairer across the board" than previous trade negotiations. Lamy's points are crucial for governments engaging in the Geneva talks. However, much more is at stake in the round. In an upbeat speech designed to enlist business support, Lamy did not mention the equally unquantifiable, but very serious, risks of failure:

Negotiated agreements require compromise. However, it seems widely agreed that if a compromise in the coming weeks requires a result that falls seriously short of what Lamy outlined, at least some participants may reject it as not offering a worthwhile balance of advantage. If this happens, negotiations could continue for a while. However, since no one can be certain of this outcome, all need to be aware of the dangers inherent in a possible collapse of the negotiations:

1. Immediate consequences: Failure of the Doha Round would have a number of immediate consequences:

-- An immediate result of failure would be the loss of the market opening and other changes under discussion in the negotiations.

-- To the extent that changes in national trade policies are already programmed, these would continue, but without the influence of external commitments to liberalize.

-- Agricultural and industrial tariffs in developed and developing countries would remain as they are now.

-- Subsidy commitments would be unchanged from those made in 1994 in the Uruguay Round.

-- Commitments on services would also remain very limited.

-- WTO rules would remain as they are.

2. Longer-term consequences: The longer-term consequences of a Doha Round failure are serious:

-- Loss of WTO credibility: As a forum for negotiation of trade liberalization, the WTO would be seriously discredited. In the absence of any other global instrument, multilateral trade negotiations would be blocked, probably until the next decade.

-- Free trade agreements: Bilateral and regional agreements would proliferate still further, at the expense of the core WTO principle of non-discrimination.

-- Dispute settlement: The WTO's second main function, adjudicating disputes between member countries about the application of its rules, might initially be reinforced. However, this aspect of its work could also eventually suffer.

-- Multilateral cooperation: More broadly, the setback to the WTO would be damaging to the whole concept of multilateral cooperation.

The Doha Round risks collapse because participants, preoccupied with concerns about the effects of opening their markets, are reluctant to make concessions needed to achieve a deal. Possible consequences of failure for the future of the international trading system could be much more serious.

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