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Trade Policy Roundtable

Creating Momentum in the WTO System (May 8, 2003)

AT A MEETING on May 8 at Decatur House, Washington, DC, the Cordell Hull Institute’s Trade Policy Roundtable, which brings together specialists in trade policy and law, will discuss the difficulties being encountered in the Doha Round negotiations in Geneva.

Herminio Blanco, the former Mexican Secretary of Trade and Industry, now chairman of Consultoria Soluciones Estrategicas in Mexico City, will lay out a vision of what the negotiations should be aiming to achieve. John M. Weekes, trade policy adviser in Geneva to Sidley Austin Brown & Wood, the Washington-based law firm, will assess what is happening in the negotiations. He was previously at APCO Worldwide Inc. and is a former Canadian ambassador to the World Trade Organization

In a background note on the meeting, Hugh Corbet, president of the Cordell Hull Institute, writes:

“Given the political circumstances in which the Doha Round negotiations were launched, especially the anti-globalization climate prior to September 11, it is not really surprising they are struggling to get traction and falling behind schedule. Most recently, the WTO delegations in Geneva could not get close to meeting the March 31 deadline for settling the modalities for negotiations on agriculture. Other deadlines in the timetable agreed at the Doha ministerial meeting in November 2001 are also looking hard to meet.

“In Geneva it is recognized that progress on agricultural trade is critical to making progress on services, manufactures and systemic reforms. Spokesmen for the Cairns Group of agricultural-exporting countries have repeatedly said that without the substantial liberalization of agricultural trade the negotiations ‘will not be completed’.”

Reduce Expectations or Raise Sights?

There are reports of doubts in Geneva about governments being in a position at the WTO ministerial meeting in Cancun, Mexico, this September to move to “stage two” of the Doha Round agenda - extending the WTO system to investment regulations, competition laws, transparency in public procurement and trade facilitation. Working groups on these issues were established at the WTO ministerial in Singapore in December 1996 - hence “the Singapore issues”, believed to be important to the European Union and Japan.

In Geneva, it is being asked whether expectations should be lowered, perhaps by reducing the Doha Round agenda, or whether sights should be lifted.

“Doubts and delays are to be expected in the early part of complex negotiations,” Mr Corbet notes. “That was the case two years into the Uruguay Round negotiations. The mid-term review of those talks at the Montreal ministerial meeting in December 1988 was the first time the Cairns Group walked out of an inter-governmental gathering. Is the situation today more serious?”

Diplomatic Failure Over Agriculture

Last November, the background note recalls, the negotiations suffered a setback when the President of France and the Chancellor of Germany declared there would be no change in the European Union’s common agricultural policy before 2013. “However interpreted at a technical level,” Mr Corbet says, “their statement showed that, as much as ever, agriculture is a deep-seated political problem that needs to be addressed at the highest level.”

Strengthening the political commitment to the WTO round in the United States has been difficult with media and high-level attention dominated by the Iraq crisis, the note continues. “With the end of the Iraq War, however, and the need to carry on the struggle against global terrorism, some would say it is now important to set about (i) promoting recovery in the world economy, (ii) restoring multilateral cooperation, especially among developed countries, and (iii) setting about the alleviation of poverty by liberalizing trade in products of export interest to developing countries.”

The note recalls that last summer Clayton Yeutter, the Institute’s chairman, who played a leading part in the Uruguay Round negotiations, wrote in Opportunity of a Century to Liberalize Farm Trade:

“The most successful of previous rounds of multilateral trade negotiations were those inspired by ambitious objectives. Somehow governments must now come together on a range of objectives that are lofty and imaginative enough to generate the political interest, momentum and commitment needed to achieve a worthwhile and durable outcome commensurate with the times.”

Time for a Pause to Reflect?

The note draws attention to the speech in London on April 15 by Peter Sutherland, the WTO’s first director-general, now BP’s chairman (click here for the text). Mr Sutherland said that the “development” perspective of the Doha Round negotiations needs to be more carefully thought through. “Many of the objectives being pursued are understandable when set against the rhetoric of poor countries as victims of the WTO system. But do they make sense in terms of poverty reduction, the generation of competitive export sectors, the attraction of inward investment or integration into the global economy?”

If the Cancun ministerial meeting in September is not able to agree on modalities for negotiations on the Singapore issues, the note concludes, there will presumably be a pause to reflect, as after the Montreal ministerial meeting in 1988. “Should governments consider reducing the agenda? Or should they lift their sights?”