Doha To Cancun: It’s Too Early To Predict The Outcome

Published: The Financial Express, May 05, 2003
By Pradeep S Mehta

“The ongoing Doha trade round is collapsing under Europe’s stubborn adherence to its hefty farm tariffs,” writes The Washington Times in a recent editorial. This reaction came after the WTO having missed the March 31st 2003 deadline for setting guidelines for cuts in agriculture tariffs and subsidies.

Earlier, similar kind of fear was expressed by many, when trade ministers failed to meet a year-end deadline in 2002, for an agreement by poor countries to get access to generic drugs to fight AIDS and other diseases, as agreed under the Doha agreement on TRIPs and Public Health. No doubt, the Doha round of trade negotiation is in crisis, as we have failed to meet one deadline after another. But, it will be little unfair to arrive at any firm conclusion at this moment that Doha trade talks have failed or that Cancun would go the Seattle way. At Cancun, rather than launch any negotiations, trade ministers will take stock of the progress in negotiations since the launch of a new trade round at Doha in 2001.

If we look back at previous trade negotiations, we find that deadlines have been seldom met. The initial time period of the Uruguay Round was four years (1986-90), but it took seven years for its completion. The Tokyo Round concluded in over six years time period (1973-79). So, how can anyone expect the Doha Round to be wound up in three years time? It has a bigger agenda than before, with members being more experienced and resourceful in comparison with the previous rounds.

The deadlines are often to push things forward, and not necessarily for reaching at a clear “Yes” or “No” situation at the end. The EU Trade Commissioner, Pascal Lamy echoes more or less similar views on the current stalemate. “Deadlines are there to focus minds, to get people to clarify their positions. This has largely been achieved: today, we have a much clearer understanding than six or even three months ago about where individual countries stand”, Lamy told an International Chamber of Commerce meeting in Bangkok on April 1.

This viewpoint of Commissioner Lamy makes one thing pretty clear that at Doha, most of the members, especially the two trading giants – the EU and the US, did not reveal their cards. They did not want an encore of Seattle and also wanted to send a positive message across the world after the unfortunate 9/11 terrorist attacks. In other words, members used sentiments rather than logic. The current pessimism over the fate of the Doha trade talks is mainly because of the members’ failure to meet the March 31, 2003 deadline to agree on modalities for the agriculture talks.

In my view, this pessimism is a little unwarranted. At no point of time after the Doha Ministerial, did the EU give an indication that it is going to fulfil its commitment on farm trade liberalisation agreed at Doha.

Moreover, in its last submission on agriculture, the EU reiterated the same Uruguay Round formula for tariff reductions and outrightly rejected the “Swiss formula” as suggested by the US.

The root of the problem lies in the lack of consensus among the EU members over Common Agricultural Policy (CAP) reform. It is neither Lamy nor the EU agriculture commissioner Franz Fischler, but France, which bears the brunt of the responsibility. Disagreement over farm policy divides the EU into two similarly sized camps – anti-reform France and Germany on the one side and . pro-reform UK, Netherlands and Belgium on the other side. Without an internal consensus, Commissioner Lamy will have no authority to deal. This was clarified in his recent article in the Financial Times, written jointly with Franz Fischler, the EU farm commissioner. Both of them have simply substantiated the existing stand of the EU on farm trade liberalisation.

Over the last few months, Fischler brought two sets of proposals for reforming CAP, but none of them succeeded in bridging the gap. However, there is a slight hope that President Jacques Chirac of France, whose approval ratings have soared on account of his opposition to the Iraq war, may abandon his country’s stubborn defence of the outdated common agricultural policy and its lavish payouts to French farmers.

At a recent meeting with African leaders, Chirac did express desire to address the subsidy issue. It does not matter who is to blame, but the result is certainly not good for those of us who want to see trade barriers crumble. The obstacles to agriculture trade seem to be as high as they were at the end of the WTO’s Uruguay Round. Now, the goal is to have trade agreements finalised by 2005 and the way out from the current mess is clear.

“For the new round to succeed, the major players, the US and the EU must contain domestic political difficulties, defuse bilateral conflicts and cooperate intensively,” writes Razeen Sally in a new report from the Cato Institute.

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