The WTO lives on, the Doha Round does not

Gary Hufbauer 21 December 2015

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Walking dead are normally confined to Hollywood, but the WTO Ministerial Declaration, published on 19 December 2015, added the Doha Development Agenda to this ghoulish cast.

The key paragraph is number 30 (WTO 2015):

“We recognize that many Members reaffirm the Doha Development Agenda (DDA), and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organisation.”

US Trade Representative (equivalent to the trade minister in most nations) Michael Froman authored a funeral oration for the DDA, printed in the Financial Times on the eve of the Nairobi 10th Ministerial meeting (Froman 2015). Like Froman, other advanced countries insisted that the DDA mandate has become an historical relic, akin to the Treaty of Versailles. In their collective view, as a negotiating modality the Doha Round, with its stress on a single undertaking and consensus decisions, has simply failed. Finding a new architecture is now the first order of business.

On the other side of the debate, the more numerous developing countries insist that the DDA still charts the way for WTO negotiations. New topics cannot be added to the DDA until core issues – agriculture, NAMA, and services – are settled to the satisfaction of all members. The DDA was born by consensus among WTO members, and it can only die by consensus. Froman’s oration was premature.

Realpolitik versus legalism

If such debates were decided by a court of law, the developing members might well prevail, and the DDA could be declared alive and well. But realpolitik, not legal briefs, will shape the negotiating architecture of the WTO in the years ahead – the same as in the past.

In fact, the actual decisions taken at Nairobi illustrate realpolitik at work. Subjects of great interest to developing countries were resolved in their favour:

  • Developing members will be able to use a Special Safeguard Mechanism to escalate tariffs as needed to protect their farmers;
  • They will be able to maintain Public Stocks for Food Security Purposes without violating agricultural subsidy limits;
  • With a few exceptions, members will phase out their export subsidies on agricultural goods – advanced countries immediately, developing countries by 2018;
  • Advanced countries, and emerging countries that feel able (e.g. China), will open their cotton markets to least developed countries (LDCs) on a duty-free, quota-free basis;
  • Members are urged to write preferential rules of origin in free trade agreements (such as the TPP) in a manner that allows LDCs to have a larger quantity of third- country inputs in their qualifying exports;
  • Members are permitted to give LDCs preferential access to their service markets until 2030, without violating the members’ MFN obligations.

At the same time, the Nairobi package included three issues of great interest to the advanced countries:

  • Additional pledges were gathered to ratify and implement the Trade Facilitation Agreement – the crowning achievement of the 9th Ministerial in Bali in 2013;
  • A deal was sealed on the expanded Information Technology Agreement (ITA-2), a plurilateral pact among 53 WTO members accounting for about 90% of global ITC trade;
  • A work programme on electronic commerce was endorsed, and a no-duty pledge was reaffirmed through the 11th WTO Ministerial, to be held in 2017.

Which parts of the DDA died and which are alive?

The Nairobi package demonstrates there is still some life in this full-fledged zombie.

  • The DDA can still ‘shout out’ on issues of concern to developing members, and some will be resolved.

At the same time, the Nairobi package shows that a new architecture is under construction.

  • The consensus rule is no longer a complete roadblock, and the single understanding is truly dead.

The final paragraph of the Declaration, number 34, points the way:

“While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members.”

In plain English, this means that a single member can still block multilateral talks, but any issue can be taken up, in a stand-alone plurilateral negotiation, by a willing subset of members.

The DDA may be a zombie, but the WTO negotiating arm, in its new dress, is alive and well.

References

Froman, Michael (2015), “We are at the end of the line on the Doha Round of trade talks”, Financial Times, 13 December.    

WTO (2015), Nairobi Ministerial Declaration, 19 December.

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Topics:  International trade

Tags:  Doha Round, WTO, Bali package, agricultural trade reform

Reginald Jones Senior Fellow, Peterson Institute for International Economics

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