Diminished Expectations: Downsizing WTO Doha

At year's end, I typically clear out old bookmarks that I haven't had the chance to blog about. Like most bloggers, I often come across more interesting stuff on the web than I can comment on at length. This one, however, is one that I cannot readily delete as it deals with the prospects for the WTO's Doha Round completion in 2010 after not being completed for nine years now.

A few weeks ago near the time of the latest unsuccessful mini-ministerial, the IELP ran an interesting feature on options for WTO's Doha Round. Among others was making the WTO a "functional UNCTAD" in which negotiations for further tariff reductions would cease but instruments such as dispute settlement and surveillance would go on.

Reuters wrote something along similar lines here. Basically, downscaling ambitions is the operative aim:

At a World Trade Organization meeting in Geneva, ministers from both rich and poor countries expressed frustration at having to wait for an overall Doha deal to be wrapped up to benefit from some its least controversial elements.

British Trade Minister Gareth Thomas said punitive import tariffs on wind turbines, solar panels and other environmental goods should be cut immediately to give incentives to producers in the clean-energy sector. "Why hold back now, just because we are waiting for the Doha round to be done?" he said.

The WTO's 153 member governments need to reach consensus in all areas of the global accord -- which aims to make it easier to export everything from cars to computers to clothes -- in order for the Doha round to be signed. But many countries have hesitated to cut the payments and subsidies they give to politically influential farmers, and also face pressure from manufacturers aggrieved at being exposed to more outside competition under the deal. That has caused big delays and blockages in the negotiations, now in their ninth year.

With doubts already hanging over a pledge from WTO members to edge the deal to conclusion in 2010, countries with something to gain from certain corners of the Doha agenda are looking for ways to secure an "early harvest" ahead of the full agreement.

South African Trade Minister Rob Davies said that subsidies to U.S. cotton growers, which have suppressed global prices and hurt African producers, should be cut before the eventual Doha deal. "That would be fair and just," he said. And Burkina Faso and other West African cotton producers threatened in Geneva to launch WTO litigation against Washington over the U.S. subsidies, saying "We cannot wait for ever because our entire cotton industry will disappear."

What is being suggested here is similar to the "Doha Lite" option being put forward by the IELP in breaking Doha into smaller, more readily digestible parts. The logic in doing so is that there are many parties angling for more immediate resolution of issues that concern them aside from just tariff reduction:

Sustainable farming activists said this week a breakaway agreement on cutting subsidies to deep-sea fishing vessels should also precede a full Doha accord, and the European Union said it was on the verge of agreeing a resolution to the long-standing "banana wars" with Latin America as a side deal to Doha, instead of making producers wait.

At the end of the Geneva ministerial, where officials said they would take the pulse of the round again in early 2010, WTO Director-General Pascal Lamy said that Doha would remain an all-or-nothing "single undertaking" unless all members agreed to break it apart.

Negotiating all 20 pieces of the Doha agenda at once helps balance trade-offs and gains "between topics which some of our members like and topics which some of our members like less," the Frenchman told a news conference.

"For the moment, we remain with the single undertaking," he said. "Some of these suggestions have been floated but as long as there is no consensus to break the single undertaking, all of these topics remain bundled in the negotiating bag and the negotiation will finish when members have agreed on each and every one of these 20 topics."

Demands to settle issues like cotton or duty-free access for goods from the poorest countries early are aimed particularly at the United States. But U.S. Trade Representative Ron Kirk said that he would wait to see what the whole package offered. "We want you to go ahead and do duty-free, quota-free [DFQF in trade parlance], we want you to go ahead and do cotton, but you'll kind of figure out what the U.S. will get down the line, and I felt: What about nothing's decided until everything's decided?" Kirk said.

It's interesting to note that the US is still holding out for a complete deal as the USTR suggests. Making concessions to different parties without gaining across-the-board market access improvements would tend to go against US interests. With the world's largest nation--of goods and services--balking at the breaking up of Doha, don't be surprised if this Doha downsizing is not yet on the cards.