Dead Ducks II: Lamy Out to Revive Doha (Really)

The Doha Round has degenerated into a really bad horror movie, "The Return of the Doha Zombies," with endless sequels. Indian Finance Minister Kamal Nath once quipped, "while Doha is not dead...it is definitely between intensive care and the crematorium." Once again, WTO Director-General Pascal Lamy is out to resuscitate Doha against all odds. In the past, I have compared D-G Lamy to Don Quixote for his relentless optimism in the face of towering odds. Despite disagreeing with him severely on the meaning of several substantive disputes, I cannot help but admire his dogged pursuit of a deal no matter how the odds stack up against him.

Now Reuters is bringing word that Lamy is--hold your breath--attempting to get the negotiating parties together again in another attempt to get Doha done for good. This he mentioned at a still-ongoing UN Conference for Trade and Development (UNCTAD) shindig. Before you guffaw, remember that the last get-together of trade diplomats was supposed to have almost resulted in a deal. Were it not for Nath's supposed intransigence over the form of special safeguards to support subsistence farmers in India should the country be suddenly overwhelmed by agricultural imports. If a deal really is as close as some trade pundits suggest, by all means, go ahead and demonstrate that it really is. However, the US pressing for non-agricultural market access in China looks set to be a large stumbling block in possible negotiations:

The World Trade Organisation (WTO) could invite ministers to Geneva in the coming weeks to resume July's abortive talks on a new global trade pact, its head said on Tuesday. But fresh sparring between U.S. and Chinese diplomats indicated that any new meeting would not be easy.

"In the weeks to come, and depending on progress made by the negotiations at senior official level, I am ready to call ministers back to Geneva to try and close the issues which remain open," WTO Director-General Pascal Lamy told a meeting of the United Nations Conference on Trade and Development (UNCTAD).

Officials from seven trading powers met last week to explore ways of bridging the gaps, and are to meet again this week. July's ministerial talks fell apart over differences between the United States and India over special measures to help poor-country farmers cope with a surge in imports. The talks were also marked by tension between the United States and China over several issues, including one to eliminate import tariffs on certain industrial sectors.

But speakers from both rich and poor countries at the UNCTAD meeting said that July's talks did not represent a collapse of the WTO's Doha round, launched in 2001 to free up world trade and help developing countries export more. "There's no doubt it was a setback, but it was not a collapse of the round," said Australia's WTO ambassador, Bruce Gosper, who chairs the WTO's General Council.

A deal to free up world trade could boost confidence in a world economy battered by financial meltdown [see my note below]. Developing countries are particularly keen to complete the talks as they recognize trade can help them grow out of poverty. "If the shirt that we are producing to export, we don't find somebody in Europe or in the export destinations to buy it, then we don't survive," said Shree Baboo Chekitan Servansing, the WTO ambassador of Mauritius, which represents African, Caribbean and Pacific countries at the WTO. Both rich and poor countries want to build on what was achieved in July, despite the ultimate failure of those talks.

Trade experts said any resumed ministerial talks would most likely be called before the U.S. presidential election. The deputy U.S. ambassador to the WTO, David Shark, said the United States remained committed to doing a deal this year, and dismissed speculation about the impact of the forthcoming poll. "I can say on behalf of the United States that we remain willing and able to negotiate," he said.

Shark repeated Washington's long-standing view that success in a deal required a big contribution from big developing countries like China and India to open up their markets. But that prompted a swift response from China. "The problem now is that often in the negotiating rooms you find that some members are obsessed with market access rather than development, are obsessed with inventing new terms like 'key emerging countries'," said Huang Rengang, a senior diplomat at China's WTO mission.

BTW, I have expressed disbelief that Lamy ties the completion of Doha to helping countries withstand the current global financial crisis. But, he just keeps repeating this line. My point is that greater trade liberalization has enabled towering trade imbalances to mount. That is, greater integration has only meant the US consuming more and more by importing like there's no tomorrow. Accompanying this trade imbalance has been the world funding the US and its various misadventures--especially the subprime fiasco. It thus seems to me that further trade integration has played a role in making this financial crisis come true, not mitigating it. But, don't try that line on D-G Lamy...