Current Article: Doha Round : Issues , Implications & Challenges
Trade ministers from about 35 countries met in Delhi recently to give impetus to the Doha round of trade talks. This article covers in a condensed form the background of the stalled Doha round of Trade negotiations, understanding the issues of the developing countries and challenges ahead. Before You read this article Here are a few helpful links. This article is the extension of the fourth link ‘Genesis of WTO & Doha Round” .
What was the Objective of Delhi Meeting?
The objective of the Delhi meeting was neither to focus on negotiations on specific topics nor to reach an agreement .The objective was to concentrate on working on a timetable for the talks. India’s Foreign trade minister, Anand Sharma had invited the leaders to get some momentum into the negotiations.
The Echo of the Issues
The core issues were echoed in G20 summits in Washington in November and London in April as well as the G8+ summit in L’Aquila in July apart from a meeting of farm exporters in June at Bali and again at the Organisation for Economic Cooperation and Development (OPEC) in Paris and in July at a meeting of the Asia-Pacific APEC grouping.
Is America taking Much Interest ?
United States which is key to any deal , is expected by many other countries to start engaging in the negotiations , however the key focus of Obama Administration seems to be upon economic crisis and health care besides to be able to point to new opportunities for U.S. business.
What is Emphasis of Developed Countries?
Developed countries emphasize the big emerging countries like China, India and Brazil to open their markets and not make excessive use of special arrangements for developing countries in a Doha deal to shield their industries from competition.
Who came for the Meeting?
About 35 trade ministers, representing major developed economies, such as the United States and European Union; the big emerging countries, such as China, India, Brazil, Indonesia and South Africa; and developing countries who coordinate regional alliances, such as Mauritius for the African, Caribbean and Pacific countries, and Burkina Faso for the cotton producer apart from WTO Director-General Pascal Lamy. (TOI)
What are the core Issues & Challenges?
There are gaps and unresolved issues on agriculture and non-agriculture market access (Nama). The center point of talks involves efforts to open up trade in agriculture and industrial goods.
The involves rich countries to open their protected markets for agriculture produce and cutting their heavy subsidies they provide to their farmers & agro exporters , as they are able to wipe out the farmers in poor / developing countries out of the market.
The richer developing countries will also cut industrial tariffs in return so that it opens up their markets for industrial goods to do business with both rich and poor countries.
What is center point of issues?
There are some exceptions to these cuts which are called flexibilities. The flexibilities are the major difficulty.
The developing countries are being led by Brazil. Developing countries say that rich nations are using these flexibilities to protect farmers and prevent any competition at their domestic market in such commodities like farm produces which are politically sensitive everywhere.
The developed countries also see that developing nations may use some flexibilities to shield some sectors. The United States says it would not move further until it has a better idea how the developing nations like India, China , Brazil will use the flexibilities.
Special Safeguard Mechanisms
This is an agreement that would allow developing countries to raise agricultural tariffs temporarily to help their farmers cope with a sudden flood of imports.
US and some developing countries such as Costa Rica which exports food said that the safeguard must not be used to choke off the normal growth in trade, and that tariffs must not rise above “pre-Doha” levels.
India and other big countries such as Indonesia said they needed a quick and powerful safeguard to protect their millions of subsistence farmers from the unforeseen impact of market opening, even if that meant big rises in tariffs.
The United States wants to push for agreements that would go beyond any general cut in industrial tariffs to eliminate duties altogether in some sectors, such as chemicals or electronic goods.
China and India say they are resisting efforts to strong arm them into sector deals, which they insist must be purely voluntary.
African countries want the United States to make bigger cuts in its cotton subsidies than in other agricultural products. They say that U.S. cotton subsidies make it uneconomic for their farmers to produce, and they cannot afford similar state aid.
What did WTO Director General Pascal lamy Said?
WTO Director General Pascal Lamy pointed out that in the Hong Kong ministerial in 2005, it was decided that the modalities (formulae for calculating tariff and subsidy cuts and levels of flexibilities) for agriculture and NAMA (Non Agriculture Market Access) would be concluded first and then the final offers in services negotiations would be exchanged.
However, in July 2008, a number of developing countries, including India, wanted to make sure while the NAMA (Non Agriculture market Access) and agri talks moved towards conclusion, services were also made part of the package so that offensive interests are met.
What is the Current Situation?
The 36 invitees (excluding India) included the Brazil-led members of the G-20 alliance of developing countries, the G-33 Group, the coordinators of the Least Developed Countries group, African group, Caribbean and Pacific countries, Nama-11, Small and Vulnerable Economies, Cotton-4, and the G-10. The US, European Union, Japan, Australia and New Zealand.
A deadline has been already fixed to conclude the Doha round by the 2010, however it seems difficult as WTO’s decision-making process works on the basis of consensus even if one member decides not to join a proposed agreement talks get stalled.
Trade ministers are now working on the a ‘single undertaking’, which means decisions have to be made on all important issues like agriculture, services and NAMA.
This means that nothing gets inked till everything is decided.
There seems to be a more of a split between the developing and the developed nations.
G20 summit will held in Pittsburgh in September 25-25 for further continuing the talks.
with inputs from various newspapers