The WTO mini-ministerial in Geneva collapsed on Tuesday.
Detailed accounts of why and how talks broke down are provided by the ICTSD. Essentially, the negotiations reached deadlock over a relatively insignificant part of the agenda.
Most reports agree that India’s commerce minister Kamal Nath was unwilling to compromise on the level at which the Special Safeguard Mechanism would come into force.
As the IHT reports:
An agreement between the European Union and the United States used to be biggest building block of any agreement, and a grouping known as the Quad – made up of the EU, United States, Canada and Japan – was extremely powerful…
The support of the Brazilian trade negotiator, Celso Amorim, and his Indian counterpart, Kamal Nath, is now indispensable for any deal.
David Cronin, writing in the Guardian, applauds Nath’s intransigence. Cronin believes, as do many NGOs, including the World Development Movement, that no deal is better than a bad deal.
India’s refusal to strike an accord would seem to be intimately connected to domestic politics – a general election may be in hand. Similarly, external circumstances impacted upon other aspects of the talks, with Nicolas Sarkozy sniping at Trade Commissioner Mandelson, a US election upcoming and of course, the so-called “food crisis”. Jack Thurston (also in the Guardian – they always seem to have more coverage of the WTO than any other British paper) astutely writes that:
One could equally ask why the US stuck fast to its own position in opposition to India and China. Could it be that Washington feared the political fallout if the round failed on the next and penultimate issue on the agenda: reducing subsidies to politically powerful American cotton farmers?
Sadly, the anti-globalisation protests of the past were not evident in Geneva last week. I say sadly out of my respect for the principle of public voice, rather than out of any great love for the protesters. Why weren’t they there? Was it the low expectations? Did they think it wasn’t worth it, for talks that would fail anyway? If so, they missed out on a chance to celebrate a rare win. Perhaps they felt that the lack of media attention made attendance unnecessary, though I was actually surprised the talks got as much coverage as they did. It seems possible that the interminable nature of the Doha round has simply worn them down and they felt they’d be best to leave the meeting to fizzle out on its own.
The prognosis, then, must be noncommittal. Circumstances will have to change, as will attitudes. Pascal Lamy was right to say that “the dust needs to settle a bit” (quoted in BRIDGES).
Today’s Financial Times lead editorial is bold enough to say that the Doha round has failed, outright. It speaks of “saving the WTO from Doha”, the failures of which it believes are dragging down the multilateral trading system.
We may well see an increasing number of “side deals” – preferential bilateral trade agreements. Randall Soderquist at the Center for Global Development:
As for what is next, we are witnessing the fragmentation of the global trading system into a world of trading blocs — regional and bilateral
The FT is broadly in favour of these as a second best solution. The Guardian is more concerned, as am I (not least because of the harm done to the MFN principle):
These deals will increase complexity and uncertainty for exporters rather than reducing it, as Doha would have done. They will allow the likes of the US and the EU to flex their economic and geopolitical muscles while China uses soft loans and arms sales in the service of its global quest for supplies of natural resources.
If the round does fail, as the FT is arguing it already has, the international trading system would enter what is in effect uncharted territory.
Yet between those who celebrate the impasse on the one hand and those who bemoan the end of globalisation and the resurgence of protectionism on the other, there are more sober assessments. Dani Rodrik tells us to “hang tight”, as does the erstwhile Larry Elliott.
I’m not quite sure if the fact that India, Brazil and China brought down the talks is a confirmation that the power of the Quad is broken, or a sign that the least powerful countries in the world are still unable to get their voices heard at the WTO. Most likely both analyses are correct.
Yet above all and despite anything else, there remains an eminently reasonable scepticism about how far the Doha round has retained its development agenda. This is no longer a development round. Doha has come a long way in the past seven years and has undoubtedly turned its back on the high-minded aims that were lauded at its creation.
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