Low expectations

 

 

 

 

 

 

 

The eighth ministerial meeting of the World Trade Organisation held in Geneva made little headway in breaking the impasse over the Doha development round. The outcome was, however, no surprise, since not much was expected from the meeting. The only realistic hope was that the political leaders would finally and formally acknowledge that after 10 years of tortuous negotiations, the Doha round was going nowhere and that, in its present form, it is unlikely to reach a closure any time soon. The communiqué issued after the meeting acknowledged as much. At the same time, it urged member countries to “more fully explore different negotiating approaches while respecting the principles of transparency and inclusiveness.” The meetings of trade ministers, held normally once in two years, are meant to give political direction to trade issues.

 

The meeting this month reached an agreement on government procurement and on streamlining the accession process for the least developed countries. It also saw the formal admission to the WTO of Russia — the only large economy that has stayed out so far — and three smaller countries. But as the lack of progress on development-related trade issues shows, the yawning gap between precept and practice continues to bedevil the WTO and its members. 

Two key issues emerge from the acknowledgment of an impasse over the Doha negotiations.

 

First, is it still possible to fix a reasonable time frame for concluding the talks?

 

Secondly, how does the stalling of talks affect developing countries such as India? Commerce Secretary Rahul Khullar said that he does not see a deal materialising before 2014. One main reason is that the United States is entering into an election mode and a new administration is highly unlikely to negotiate a multilateral trade treaty soon after taking office. The failure of the Doha round will lead to erosion in the standing of the WTO, and that would be a pity.

 

The negotiations apart, it has created a fair and equitable machinery for overseeing the implementation of agreements, monitoring and surveillance, dispute settlement and capacity-building. It is widely acknowledged that its initiative in these areas has helped in checking protectionism during the recent crisis.

It would be unfortunate for India if, as a result of the WTO losing its pre-eminence in trade negotiations, it becomes less effective in playing these roles. Driven by expediency, many countries, including India, have entered into other forms of preferential trade agreements, either bilateral or plurilateral, although they know only too well that these are only second-best options.