WHAT’S HAPPENING TO THE DOHA TRADE ROUND ?

If you only read the headlines you would be forgiven for thinking the Doha Development Trade Round had failed and that the World Trade Organisation had been consigned to the rubbish bin - a modern League of Nations. New deadlines have again been missed. Most of the media and many governments thought we would not launch the round in Doha. Some governments suggested that as Director-General of the WTO, I should call off the Ministerial meeting such was the danger and expectation of failure. When we did succeed the same newspapers said we couldn’t fail because the terrible events in the U.S. on 9/11 had united the world.

Some Ministers had told their parliaments and leaders they would not accept a new round, new obligations. Prime Ministers and Presidents and capitals were called to give their Ministers new instructions. I agreed to write letters to some Ministers congratulating them on ensuring their positions were defended. I even had to brief a Minister on how he could answer questions in his parliament and table our letters. In the last few hours when the Doha Conference was on the brink of failure, it became retail politics at its most intimate. There was in the end too much in the negotiations for them to refuse.

We failed miserably to launch the trade negotiations at that famous catastrophe in Seattle. Governments could not agree on the breadth and depth of the negotiations. The European Union wanted issues like investment, competition, government procurement, and trade facilitation on the agenda. In Doha we agreed to further study these controversial subjects and got the round going.

At the failed Ministerial meeting in Cancun, a meeting that was just supposed to be a mid-term review and settling of timetables, things again turned to custard. This surprised me, the then European Union Commissioner, now Director-General of the WTO, Pascal Lamy, took these subjects off the agenda. The EU compromised but despite this offer of goodwill, no progress was made. Pascal Lamy was surprised he wasn’t congratulated and that some Ministers droned on with speeches written before his offer as though nothing had changed. The subjects are so complex, some Ministers so poorly serviced by their officials who just lack the technical capacity to respond, that last minute compromises and flexibility close to deadline don’t work. Incidentally, to my grave I will wonder if the EU had taken these items off the agenda in Seattle, could we have done the deal and thus Doha would have been about concluding the round?

This thing can be done. No round has ever come in on time. It is more complex now. New, tough players have emerged, developing countries incensed at earlier failures to move in product areas where they have an advantage, notably agriculture. This is healthy. But despite the correctness of their case, this cannot be just an agricultural round if it is to succeed. It will not be cost- or change-free for developing countries. There are good reasons why they too should open their markets and reduce industrial tariffs. Every bit of economic and historic evidence shows this is good for all sides. Open trade is development. Postponing internal reform despite the evidence because of local politics and privileged interests is like the overweight, chain-smoker promising to quit and lose weight in the future.

There is, correctly, special and differential timetables for poor countries to allow them time to adjust and build capacity. The global agencies, World Bank, development agencies should be focused in a coherent way to help in this adjustment period. There is a dangerous suggestions being floated that special and differential treatment could become an ‘opt out’ and ‘opt in’ clause. Who does this really help in the long run? But to do the deal, this could be attractive to some. When some Ministers talk publicly of a minimum deal, lowering of ambitions, reach for your gun. What they are really saying is, we need to have minimal change to our agriculture. Minimum outcome is really their maximum ambition. Some politicians want to cut a tiny deal, call it victory, and go home. I hope not. That’s like declaring victory in Iraq or Vietnam and running away, hoping the good headline drowns the reality of failure.

The multilateral system has underpinned the most successful 50 years of human existence. Failure is not an option for those who still believe in a growing, peaceful world governed by predictable, enforceable, transparent rules. Alas, the populist protestors may claim a non-result is a victory. But doesn’t that just leave the poor exactly where they have always been?