“We are committed to bringing the Doha Round to a successful conclusion in 2010.”  Heard that one before?  Yes, this time it was at the latest G20 Summit, in Pittsburgh.

Even since the Doha Development Round was launched, a bevy of international summits and ministerial meetings have been promising to bring it to a successful end.  I suppose one day it will really happen, if only because of boredom and fatigue!  But even that is not sure, as for the first time ever the developed OECD countries not dominating the negotiations.  India and Brazil are major protagonists, going to head-to-head with the US and EU, which are still going head-to-head with each other.

The Doha Round is but the ninth round of post-war trade negotiations which have substantially liberalized mainly trade in manufactured goods.  It was launched in November 2001, just two months after the 9/11 terrorist attacks, a moment when the world came together in a rare spirit of co-operation.

Another key aspect was that many developing countries claimed that they gained little, or even lost, from the previous round of negotiations, the Uruguay Round.  Thus, there was international agreement that the next round of trade negotiations should be focused on the development agenda.  In the background, there was much international debate at the time about inequitable sharing of the benefits of globalization, and a development round would help re-balance these inequities.

What are the main issues on the Doha agenda?

First and foremost, there is agriculture which has become of the linchpin of the Doha Agenda.  If developed countries were serious about helping developing countries, they would abolish all agricultural protection today.  This would allow developing countries to exploit their comparative advantage.  Importantly, many developed countries would remain competitive in agriculture, especially in special niche areas.

For ages now, the Americans and Europeans have been playing a ping pong blame game about whose liberalization should be improved in terms of market access, reductions of export subsidies and reductions in trade-distorting support.  But they are not the only ones to blame, India and China are trying to hang on to protection for some of their farmers.

Second, there are industrial goods for which the goal is to further reduce tariffs, including tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, particularly on products of export interest to developing countries.  It is here that many developing countries are bad guys, blocking efforts to free up trade.

Third, there is the ambition further liberalizing all categories of services and including mode 4 regarding migration of service providers.

And lastly, there is a string of issues like antidumping measures subsidies and countervailing measures, regional trade agreements, Dispute Settlement Mechanism, environment, and trade facilitation.

Many estimates have been made of the potential benefits of a successful conclusion to the Doha Round.  The benefits are large.  You only have to look at the economic situation of countries that don’t trade much (North Korea, Burma, or Cuba) to see the benefits of trade.  Further, OECD estimates that total support given to OECD agriculture is at $375 billion in 2008, more than triple the size of official development assistance!

With President Obama presiding his very first G20 summit, leaders indicated the following:

“We remain committed to further trade liberalization. We are determined to seek an ambitious and balanced conclusion to the Doha Development Round in 2010, consistent with its mandate, based on the progress already made, including with regard to modalities. We understand the need for countries to directly engage with each other, within the WTO bearing in mind the centrality of the multilateral process, in order to evaluate and close the remaining gaps. We note that in order to conclude the negotiations in 2010, closing those gaps should proceed as quickly as possible. We ask our ministers to take stock of the situation no later than early 2010, taking into account the results of the work program agreed to in Geneva following the Delhi Ministerial, and seek progress on Agriculture, Non-Agricultural Market Access, as well as Services, Rules, Trade Facilitation and all other remaining issues. We will remain engaged and review the progress of the negotiations at our next meeting.”

Nice words indeed, though slightly indigestable.  But it is President Obama who will have the greatest challenge is bringing the Doha Round to a successful conclusion.  He needs a Trade Promotion Authority which would prevent Congress from amending any agreement.

And yet it is perhaps America which has the greatest moral responsibility to contribute to the conclusion of the Doha Round.  Through the global financial crisis which America caused, it has created immense suffering for the developing world.  It should do everything in its power to help ease this suffering.

References:

www.wto.org

www.oecd.org