Column: A long way from a done Doha deal

Written by Biswajit Dhar | Updated: Oct 24 2013, 02:20am hrs
In just over a month, members of the World Trade Organisation (WTO) will congregate in Bali for the Ninth Ministerial Conference. This meeting is being seen as an important step towards providing the much-needed impetus to the Doha Round, which has suffered an extended impasse. In 2001, when the decision was taken to launch the Doha Round, WTO members had agreed to seal the deal in four years. However, well beyond a decade since, progress in most of the major negotiating areas has been perfunctory. There is, therefore, no doubt that the current round has been the most vexatious of all the negotiating Rounds that the multilateral trading system has seen since it was established in 1948.

An oft-ignored aspect of the Doha Round is that its architects had envisioned a balanced outcome by ensuring that negotiations in all the mandated areas conclude simultaneously. This was reflected in their agreement that the outcome would be in the nature of a single undertaking, which really meant that the Doha Deal could only be done when WTO Members have concluded agreements on all areas. The WTO-speak in this regard said it all: Nothing is agreed until everything is agreed. In practical terms, this approach was extremely significant since it sought to curb the tendencies of the more dominant countries to conclude agreements in areas that suited their interests best (euphemistically called cherry picking) and to go slow (or even ignore) in areas in which they had to make concessions. Thus, countries could engage in inter-sectoral trade-offs and this was seen as a big step towards ensuring a balanced outcome.

The high ambitions set for the Doha Round have eroded rapidly, particularly since the breakdown of the negotiations in July 2008. The narrow focus of the issues being discussed in the run-up to the Bali Ministerial Conference underlines the extent of erosion of expectations. The agenda engaging the WTO membership looks thin in relation to the overall negotiating mandate of the Round as they cover three areas, viz., trade facilitation, a couple of issues in agriculture and a package for the least developed countries. The focus of the pre-Bali engagement has, however, been on the first two issues.

Since its inclusion in the negotiating mandate in 2004, trade facilitation (TF) has looked as the most likely area in which WTO Members could conclude an agreement. Negotiations on TF have been dealing with several customs-related issues, including transparency, release and clearance of cargo introduction of risk management, post clearance audit, instituting single window for clearance of goods, elimination of pre-shipment and post-shipment inspections, and uniform forms and documentation requirements for clearance of goods. Besides the above-mentioned, freedom of transit and customs cooperation are key elements of the discussions.

The broad contours of an Agreement on TF are getting clear, despite there being more than 400 square brackets in the latest negotiating text. At the same time, several contentious issues are engaging the WTO members. Differences persist, particularly on the extent of flexibilities that are to be included in the agreement, which are of primary interest to the developing countries. Moreover, these countries have been insisting on the inclusion of effective provisions on special and differential treatment; provisions that would allow developing countries to take less onerous commitments and also benefit from a longer phase-in period for the implementation of their commitments. In addition, developing countries have been seeking firm commitments on capacity building and technical assistance, which will enable them to meet the challenges posed by the proposed agreement.

Agriculture has been the among the most contentious issues in the Doha Round and the run-up to the Bali Ministerial has been witnessing deep differences between the developing and the developed countries. Agriculture has been identified as a priority area by two groups of developing countries, viz., the G-20 and the G-33, both of which include India as a prominent member. While the former is seeking elimination of export subsidies and credit, the latter is seeking amendments in the Agreement on Agriculture (AoA) for promoting food security.

Way back in 2005, WTO Members had agreed in the Hong Kong Ministerial Conference that by 2013, export subsidies will be eliminated and export credit would be significantly reined in. What is quite clear by now that these twin commitments will not be met. The G-20 has, therefore, taken the initiative to ensure that these egregious forms of subsidies are eliminated in quick time.

It is the G-33 proposal on food security that has emerged as the critical issue in the confabulations on agriculture. Towards the end of 2012, the group tabled a proposal for the inclusion of specific measures in the AoA that could enable WTO members to support their food security programmes. Besides India, which has initiated one of the most broad-based programmes for providing food aid to the needy, ASEAN-members are among those that have taken measures for promoting food security; especially after food prices had reached record levels in 2007-08.

The G-33 proposal seeks to ensure that AoA provisions do not impede implementation of food security programmes by developing countries. These countries have therefore proposed three amendments to the subsidies disciplines, which, they argue, can be introduced through a Ministerial Decision in Bali.

The first of the proposed amendments would allow developing countries to make payments on specific activities to promote rural development and poverty alleviation without being subjected to any disciplines introduced by the AoA. Thus, paragraph 2 of Annex 2 of AoA was proposed to be amended by including payments by developing countries for farmer settlement, land reforms, rural development and rural livelihood security, such as provision of infrastructural services, land rehabilitation, soil conservation and resource management, drought management and flood control, rural employment programmes, nutritional food security, issuance of property titles and settlement programmes.

Secondly, G-33 proposed that the existing provisions relating to public stockholding for food security purposes should be amended in order that developing countries can spend on acquisition of stocks of foodstuffs for supporting low-income or resource-poor producers and the cost of so doing will not be accounted for in their subsidies bills. And, finally, they have sought specific amendments to the AoA to cover the programmes designed to lower food prices to more reasonable levels.

In a more recent submission, the G-33 members have proposed a supplementary decision a key element of which is a so-called peace clause, which would provide immunity to the food security programmes of developing countries from WTO disputes. This peace clause would therefore enable developing countries to implement their food security programmes in an unhindered manner as long as their proposed amendments to the AoA do not take effect. But the G-33 proposal faces serious challenge from the developed countries. The United States has been in the forefront of those opposing the G-33, and has demanded that the peace clause be a time-bound interim solution.

In its opposition to the G-33 proposal on food security, the United States has thoroughly exposed its duplicity on the issue farm subsidies. According to the estimates provided by the OECD, the United States has been the largest provider of farm subsidies, having steadily increased its support for agriculture from about $101 billion in 2005 to more $156 billion in 2012. These subsidies have not only allowed the United States to protect its highly resource intensive agricultural sector, they have also provided enough cushion to the farm lobby to dump their products in the global markets. At the same time, however, the US and other developed nations unhesitatingly oppose developing countries when the latter initiate programmes for feeding their poor and the under-nourished. India and other G-33 members have stood up against any attempt to curb their sovereign rights to undertake social welfare programmes; this stand must be taken to Bali and beyond.

The author is director general, Research and Information System for Developing Countries