The Doha Development Agenda and Prospects for the Cancun Ministerial

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Dr Supachai Panitchpakdi, Director General of the World Trade Organisation (WTO), warned of the serious challenges still facing the Doha trade and development negotiations.

The Doha Development Agenda and Prospects Prospects for the Cancun Ministerial

DrSupachai Panitchpakdi, Director General of the World Trade Organisation (WTO), addressed a European Policy Centre breakfast policy briefing, organised in partnership with the King Baudouin Foundation and sponsored by Nike, on “The Doha development agenda and prospects for the Cancun ministerial.” A question and answer session followed. This is not an official record of the proceedings, and specific remarks are not necessarily attributable.

The WTO was facing the same dilemma as the European Union (EU), said Dr Supachai – enlargement was making the search for consensus harder. With a queue of countries awaiting WTO membership and with American elections and a new European Commission in 2004, it was vital that the Doha Round started showing results before the summer of next year. The Cancun ministerial, however, should not be seen as a point of either success or failure – more a stock-taking exercise in a highly complex negotiation.

Dr Supachai said the problem, in a world of increasing unpredictability but intertwined destinies, was how to structure the future of a global economy and establish fair rules for all nations, large and small. The answer was to strengthen multilateralism and keep it alive, because that was the only way to maintain lasting world peace. Multilateral solutions were required to tackle economic slowdown, with enhanced market access to help the poorest countries participate in a multilateral trading system.

The WTO was working along the same lines as the EPC in trying to enhance international understanding, and, just like the EU, the WTO was embarked upon a dynamic enlargement programme, with more than 20 nations, including Saudi Arabia and Russia, lining up to join the current 144 Member States. Meanwhile, the challenge of the Doha Round agenda was to pull together issues such as manufacturing, agriculture and rural development, as well as dealing with Uruguay Round leftovers. Solutions needed to be found, preferably by the end of 2004. Doha was a highly complex agenda, with market access still the main issue. Getting rid of quotas, looking at high tariffs (still up to 40% in some cases), and addressing the rules issue were paramount.

Serious challenges facing the Doha Round

The four major areas of Doha Round discussion were market access, rules, development-related issues and implementation. Development issues posed a particular problem with 49 less developed countries (LDC) that had nothing to trade and claimed a total world trade share of about 0.4%. The situation was not hopeful, unless Doha got a grip on labour-intensive industries, such as agriculture and textiles.

Implementation was the application of existing commitments entered into under the Uruguay Round but not yet applied for various reasons, including the financial crisis in Asia, the general economic downturn, or problems in some WTO countries with parliamentary procedures. It was one of the most difficult issues because of the attempted extension of “geographical indicators”, a protection still demanded by the “old world” countries but that “new world” countries wanted to end.

A fifth issue was the Disputes Settlement Understanding Review (DSUR) – the backbone of WTO work. That review was now due, four years after the DSUR had first been applied. Dr Supachai emphasised that more than half of WTO credibility rested on the credibility of the DSUR. There were hundreds of disputes cases pending and the aim of the review was to make the system faster and more efficient, and apply it to environmental issues as well as trade. Dr Supachai acknowledged that the WTO had a solid history of missing deadlines, but that was not for lack of trying. With so many countries involved in negotiations and with such a wide range of d etailed issues, it was not easy to achieve consensus on time.

Agriculture was certainly at the heart of the Doha negotiation, because although it only accounted for 10% of world trade, its political weight was far greater. To those concerned about missed deadlines, the Director General observed that, in the Uruguay Round, the farm negotiations had taken three years, with by far the most progress being achieved in the second half.

In the services sector, there had already been strong progress under Doha, but sorting out the rules issues remained technical and complicated, with hundreds of cases pending on subsidies, fisheries, and anti-dumping. China remained the “world champion” in the number of alleged rules breaches.

For Cancun to succeed, many “impediments” would have to be removed, but the ministerial was not an end in itself but simply part of the Doha Round work programme. Cancun would allow ministers to take stock of the last two years and establish “road maps” for the remaining part of the Round.

Concluding, Dr Supachai said the Doha Round should be used to help stabilise the global economy, and for that the WTO needed the support of the EU, with its 25% share of global trade and its good understanding of world trade issues.

Discussion

Answering questions, Dr Supachai said it was the case that African nations would benefit the most from waiving thetrade-related intellectual property rights (TRIPS) commitmentfor countries facing public health problems with malaria, tuberculosis and HIV aids. But he pointed out that the benefits of assisting such countries would extend to the whole world. The TRIPS waiver was not exclusive. It could equally apply to countries affected by the SARS virus, an issue, which could be raised during this Round.

Dr Supachai said theIraqi conflictand the political disputes it had triggered had had little fall out on trade talks. The war had not affected the desire to develop cooperation. Managing such a complex trade round remained difficult, however, and there were complications in balancing the need for sectoral negotiations with the desire for a final, overall single package of agreement.

One aim of the WTO when it replaced the General Agreement on Tariffs and Trade (GATT) procedure was toend the system of “rounds”, but for practical purposes there might still be a need to have such negotiating milestones. It would, however, be sensible to lower ambitions and settle for more realistic deadlines in future.

Dr Supachai saidbusiness support for Doha was vital. The WTO dealt with governments and also NGOs, but it was businesses which were directly affected by trade decisions. So it was important for the business sector to represent their own interests, something, which was strangely absent in many major sectors. The problem was that governments tended to consider that they were dealing largely with agriculture and felt it necessary only to safeguard the needs of their farm sectors. That was important and legitimate, but the fact was that up to 70% of GDP and more than 50% of job creation was centred on the services sector, and there was virtually no contact with the transport, insurance, telecoms and other affected areas of the service industry.

What were needed in the Doha negotiations were not just politicians who were prepared to be statesmen, looking beyond the interests of their next election, but also businessmen who thought like statesmen.

OnRussia’s possible accession to the WTO, Dr Supachai said that Russia had made significant progress over the last year but the talks were bogged down for the moment. However, the obstacles, even on energy policy, were not insurmountable. But it was clear that as energy was the backbone of Russian economic policy, there was no chance o f Russian accession until the matter was resolved.

Challenged over WTO adherence to negotiating throughMost Favoured Nations, Dr Supachai said the work of the WTO was clearly hampered by many bilateral trade deals, a lot of which were not notified to the WTO. There were over 300 of these regional arrangements, although the WTO did not know the real figure. Many of them did not last long, but while some of them survived and brought down some trade barriers, they often resulted in the erection of others. The answer was a registration system for such deals, so that there was no “agenda clash” between individual countries and the work of the WTO.

Dr Supachai said there was aneed to regulate non-tariff barriersas well as tariff barriers and this would be part of the non-agricultural negotiation; “Unless we do regulate this area, the emergence of non-tariff barriers will be a future source of more disputes.”

Closing the meeting,Stanley Crossicksaid the role of the Director General of the WTO was crucial and with more and more countries joining, it was difficult to achieve consensus. What was needed in the Doha Round, he said, was: “patience, patience and patience.”

 


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