Pumping new life into Doha Round

Despite exhortations from successive G- 20 summits, the Doha Development Ro-und has been in

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a state of suspended animation since July 2008. It is fortunate that protectionist measures taken by several governments since November 2008 have not resulted in a rash of competitive protectionism. But we are at the top of a very slippery path. It will not take much for governments to succumb to domestic protectionist pressures if unemployment continues to rise or the recovery falters. Therefore, it is quite important that the multilateral trading regime be strengthened and the credibility of the World Trade Organisation (WTO), which ser-ves as its global watchman, is enhanced. There can be no better means of achieving this than by ensuring a successful conclusion of the Doha Round.

In this context, it is sad to realise that a successful outcome of the Doha Round is seen as an increasingly remo­te possibility. There is talk of ‘multilaterlising regionalism’ which, in all honesty, is somewhat of an oxymoron. And so­me observers, on grounds of realism, have suggested that we accept a failed round as a fait accompli and start looking at the second best options. India and other emerging ec­ono­mies should not accept such a pessimistic prognosis. Inste­ad, they need to ensure that the Doha Round is successfully concluded, even if with a lower ambition level.

In this context, the Indian initiative to hold a mini-ministerial conference in Delhi (on September 4-5) is indeed welcome. It is also heartening to note that most major WTO members and less developed countries have agreed to send their trade ministers as this will ensure that participation in this purely informal get-together would be seen to be fully representative of WTO me­mbership.

This is vital, as in the absence of such a broad-based representation, the mini-ministerial could well be critici­sed as being exclusionary in nature and focusing only on issues of interest to a few advanced and large emerging economies. Henceforth, negotiating modalities in WTO should be such that all 150 members feel included and the process is seen as transpa­rent and not one in which de­als are reached behind closed doors by a handful of members. This will require that members of the so-called New Quad have a far more active communications stance with the rest of the membership.

Moreover, formation of ‘issue-based negotiating gro­ups’, which could reflect fluid negotiating geometries and co­alitions, should be actively encouraged. The mini-ministerial would do well to focus principally on these ‘process issues to facilitate further progress. With an enlarged membership, likely to expand even further, modalities have to be agreed upon to ensure that outcomes and also the negotiating processes are also inclusionary, equitable and tr­ansparent.

The most important chan­ge that has happened in WTO since the end of the Uruguay Round is the emergence of three or four large emerging economies such as Brazil, Ch­ina, India and South Africa, which have had to be included among the small core gr­oup of negotiators. The emergence of the New Quad (the US, the EU India and Brazil, with the latter two replacing Japan and Canada. The negotiating gr­oup often includes China and South Africa as well) marks a major transition in global tr­ade negotiating architecture and necessitates building up of trust and confidence am­ong the members of the New Quad. The best means to bui­ld this trust is to try and ac­hieve some collective success on issues that may require less compromise for all concern­ed. This would also lend support to accepting a less ambitious outcome if that is what is needed for the successful conclusion of the Doha Round.

The other transition being tackled in the Round is to bring agriculture within the ambit of the multilateral trade regime from which it has so far remained excluded. This is a historical undertaking, mu­ch more strategic in its implications than was, for example, the inclusion of textiles and the winding up of the multi-fibre agreement. This also took very long and required tre­mendous efforts and compromises. Agriculture is seen as a strategic sector in the context of food security. This gives extraordinary and disproportionate clout to domestic agriculture lobbies that have been hitherto successful in thwarting any move toward agriculture under the WTO discipline. A necessary condition for achieving this would be for WTO members to agree to an international convention on food security that would essentially disallow food being used as a strategic weapon ag­ainst any other member country. This would also include protocols outlawing export restrictions and permitting action against cartels by an empowered WTO. The mini-mi­nisterial could discuss holding such a global convention under the UN aegis.

In the meantime, we may agree to move forward on the basis of the understanding th­at was reached in July 2008. At that time, Indian negotiators were successful, having overcome strong resistance, in securing sufficient safegu­ards against import surges th­at could affect the livelihood of small and marginal farmers. A successful Doha Round that yields bound tariffs in NAMA (non-agricultural market access) that are above the applied rates, protects our small and marginal farmers and gives us greater market access for our competitive services exports is entirely in India’s interests.

By calling for the mini-ministerial, the commerce mi­nister has already signalled India’s intention to remain actively engaged. Now he only has to mobilise the political support within his party for concluding the Round. This must be his next priority.

The writer is director and chief executive, ICRIER. These are his personal views.

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