Is early harvest still possible?

Zhenyu Sun 28 May 2011

a

A

I am greatly interested in the discussions among experts and professors recently on the future of the Doha Round. While I can feel their strong sense of frustration about the deadlock, I don’t see any real possible solutions for the problems at hand. I don’t have one either. The lack of a solution is probably due more to political problems than to technical problems.

Next steps

To announce that the Doha Round is dead would be easy. But then what? Would such an announcement inspire people to inject more energy to the work of the organisation? Would it serve the purpose of strengthening the multilateral trading system? I rather doubt it.

After dropping the Round, what could be done next? Just continue with business as usual? Should members only focus on trade policy reviews, on regular meetings in the bodies under the General Council, and on dispute settlement cases? Should they take it for granted that the panellists and Appellate Body members will be able to fill in the gaps of writing new rules for the world trading system? This does not sound very attractive.

The need for progress and the difficult options

If the WTO is to remain relevant, its members must negotiate new rules. How could they do this? Could there be a completely new round sometime later? Or could there be new rules or amendments of the old ones adopted at each and every council or committee separately?

One option would be to launch a new round. To start a new round post-Doha, however, could be even more difficult than the Doha Round itself. People have tasted the failure of Seattle. In any new round members could not ignore the built-in agenda of agricultural subsidies, or discussing the tariff-cutting formula on agricultural and non-agricultural products, or services trade, and rules. It may still be difficult to cover labour and environmental standards. In any case, the hard bargaining over the past 10 years would not disappear with the start of a new round.

Another option could be to rule out all rounds after Doha. To not even to talk about the “single undertaking” any more, i.e. to abandon the negotiating principle, heretofore respected, where all WTO members must agree to all aspects of the final package. This option would just let the councils and committees continue with their normal functions, setting new rules and amending old ones on their own. I personally believe this option might be feasible, but it is not in line with 60 years of WTO common practice. Members may not like this option because it could rule out trade-offs across interests in other areas.

Early harvest as the way forward

If dropping the Round is not an attractive option, and if waiting till after the next US election is likewise unappealing, the only option left is some kind of ”early harvest” to be adopted at the December 2011 ministerial meeting.

I am fully aware that some members are strongly against the idea of an early harvest. Even if they could eventually negotiate a duty-free quota-free agreement for the world’s poorest nations, an agreement on cotton, and an agreement on trade facilitation, they are unlikely to agree to implement them now because they will need to use these issues to negotiate trade-offs with their other interests. I would like to make an appeal to those members.

Guarding the future of the multilateral trading system

It is high time that people gave more considerations to the future of the multilateral trading system and less to their short-term national economic interests. As the APEC leaders reiterated at a recent summit:

“We uphold the primacy of the multilateral trading system and reaffirm that this strong, rules-based system is an essential source of sustainable economic growth, development, and stability. We take considerable satisfaction in the success of the WTO, its existing framework of rules, and its consultative mechanisms in contributing to the beginnings of global economic recovery. The WTO has amply proven its worth as a bulwark against protectionism during a highly challenging period.”

I do hope that people take this statement seriously. This means giving thought to ways to save the credibility of this organisation, to deliver the promise of a development round, and to make sure that this organisation is still relevant to 21st century trade matters. Safeguarding the future of the WTO is particularly important at a time when the world has experienced the global financial and economic crisis, the upheaval in the Middle East, and when we face great uncertainties.

Content of the early harvest

Certainly there could be more detailed discussions on what issues should be included in the possible package. If members are willing to move along that line, there is still time to finalise the content. My friend Ujal Singh Bhatia (WTO Ambassador from India until 2010) has indicated some areas where members could try to build consensus and adopt a decision at the December 2011 ministerial meeting (Bhatia 2011). I strongly believe that it is worthwhile to make some extra efforts along the lines he has proposed.

  • In any case, duty-free-quota-free treatment for LDCs and the issue of cotton have to be included in the package.

These are decisions taken at the Hong Kong Ministerial Meeting; its immediate implementation would be conducive to addressing the great concerns of the poorest countries and thus very much in line with the principle of the Doha Development Round.

  • Trade facilitation could bring benefit to all members.

It could help trade expansion enormously and bring even more benefit to trade than would further reduction of tariffs. It could also help President Obama achieve the goals of doubling US exports in the next 5 years and substantially increasing employment at home.

  • The date for expiration of export subsidies at 2013 was adopted at the Hong Kong ministerial meeting and should be included in the package.

The EU may want to bring in some other issues to balance its interests. Personally, I believe it is doable through adding some issues of their interest, such as environment products, to the package.

Concluding remarks

When they meet in Geneva this December, I am sure that members would prefer to have their trade ministers making some kind of substantive decisions. An early package for the Doha Round is probably a suitable one for the ministers to consider and to deliver at their meeting later this year.

References

Singh Bhatia, Ujal (2011), “Salvaging Doha”, VoxEU.org, 10 May.
 

a

A

Topics:  International trade

Tags:  WTO, Doha Round, Next Steps Doha

Chairman, China Society for World Trade Organization Studies

Events

CEPR Policy Research