Recently I was asked to explain the recent issues relating to Doha Round of WTO talks and how it will affect the global trade.
Well, I excerpt below what the Wikipedia says (interspersed with some of my own observations) about the subject. You will get a thorough background about the
What Wikipedia says about them?
The Doha Development Round of World Trade Organization negotiations aims to lower trade barriers around the world, permitting free trade between countries of varying prosperity. As of 2006, talks have stalled over a divide between the developed nations led by the European Union, the United States and Japan and the major developing countries (represented by the G20 developing nations), led and represented mainly by India, Brazil, China and South Africa.
The Doha round began with a ministerial-level meeting in Doha, Qatar in 2001, with subsequent ministerials in Cancún, Mexico (2003), and Hong Kong, China (2005). Related negotiations have taken place in:
The round was set to be concluded in four years (December 2006)- after two more Ministerial Conferences had produced a final draft declaration. The WTO pushed back its self imposed deadline to slightly precede the expiration of the
The 2003 Cancún talks — intended to forge concrete agreement on the
South Korean Farmers and Fisheries President Lee Kyung Hai committed suicide on the first day of the conference in protest of the price distorting agricultural subsidies of the EU and US. The North-South divide was most prominent on issues of agriculture. Rich countries’ farm subsidies (both the EU’s Common Agricultural Policy and the
The August 2004
Trade negotiators wanted to make tangible progress before the December 2005 WTO meeting in Hong Kong, and hoped to agree to the deal before 2007 when
By July-August an agreement was needed in order to finalize negotiations for agreement in
The Sixth WTO Ministerial Conference took place in
Trade ministers representing most of the world's governments reached a deal that sets a deadline for eliminating subsidies of agricultural exports by 2013. The final declaration from the talks, which resolved several issues that have stood in the way of a global trade agreement, also requires industrialized countries to open their markets to goods from the world's poorest nations, a goal of the United Nations for many years. The declaration gave fresh impetus for negotiators to try to finish a comprehensive set of global free trade rules by the end of 2006. Pascal Lamy, Director General of the WTO, said, "I now believe it is possible, which I did not a month ago."
As many as 2000 protesters demonstrated outside the Hong Kong Convention and Exhibition Centre, the location of the talks. Clashes with the police left at least 116 people injured, including 56 officers, although there were no critical injuries according to the authorities.
The July 2006 talks in
Subsequent developments: Unofficial plurilateral talks
These talks were conducted during May 2007 to narrow their differences. The major participants of the talks were US,
Talks were stuck over issues such as
- Levels of reduction of agriculture subsidies;
- Paring of industrial and farm tariffs; and
- Movement of workers between countries.
The main bone of contention is about agriculture subsidies being extended by the
One recent development that cannot be ignored is the capitulation of the US administration to the long-standing demand by the US labour lobbies that future US trade deals required adherence to the five basic ‘internationally recognized’ labour principles, as stated in the 1998 ILO Declaration on Fundamental Principles and Rights at Work. Violations that harm the
What needs to be kept in mind is the fact that
1. Had the Bush administration fulfilled its commitments, American taxpayers would have benefited from the elimination of huge agricultural subsidies – a real boon in this era of yawning budget deficits.
2. Americans would have been better off as consumers too, with increased access to a variety of low cost goods from poor countries.
3. Migration pressure would have reduced, because it is the huge disparity in incomes more than anything else that leads people to leave their homes and families to migrate to the
4. A more prosperous globe is in the interest of the rich developed world – as a less poor world would lead to less despair and thereby less political instability across the world.
How will the failure affect the world?
While I do not disagree with the assessment give above, what I see clearly emerging is that failure or success, whatever may the outcome, it is for certain that the World will keep seeing more of regional FTA (Free Trade Area) agreements taking shape. More and more regional blocks will start getting formed and they will start gaining more negotiating power than what is available with them at present. Their presence also will acquire a kind of institutional status within the WTO framework. Remember the EU? How it has become the sole representative or arbitrator of European interests! A similar thing will happen in the years to come for all regional trade blocks that are going to become more powerful.
Secondly, it is no longer possible for anybody to ignore the BRIC or IBSA countries. These developing countries are gaining a faster mind share, in the public consciousness of the policy makers in the developed countries. As long as that is so, and that is bound to be so for years to come, the developing countries’ interests are going to be articulated reasonably well by these five countries. But how far they will be able to hold their ground and not yield to undue pressure from the developed world, will always be open to question.
Lastly, a weekening dollar may pose unforeseen situations before the world. My take on that is, the emerging economies may no longer be interested in financing the current account deficits of a consuming economy. They may instead start pumping their surpluses into regional development. Look at the way the Chinese are wooing the African countries! They may finance the African deficits in return for a greater share of natural resources of