Dead as Doha. But will come alive in 2010

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Negotiations on the Doha Development Agenda (DDA) began in December 2001, but are currently deadlocked. To know why, four points must be appreciated.

First, negotiations have become more complicated. There’s no longer a clean line between external sector liberalisation and the domestic economy. Agriculture is the most obvious example. It is significant that not a single RTA (regional trade agreement) touches agriculture.

Second, the GATT/WTO system has, in a way, become a victim of its own success. Negotiating between 23 countries in 1947 was relatively easy. With 153 member countries, each one of whom has an in-principle right of veto, negotiations become impossible. WTO (and GATT earlier) resolves the problem by recognising that the relative democracy of WTO vis-à-vis IMF is de jure rather than de facto. The core group consists of around 25-30 countries, including the developed ones. Earlier, if the US and EU agreed (with Japan and Canada co-opted), there was little developing countries could do to stop the agreement. DDA negotiations witnessed the somewhat more formal constitution of developing country coalitions. G-20 was formed through the Brasilia Declaration in June 2003 by India, Brazil and South Africa and with China joining, these four countries form the core of G-20. G-33 actually has 44 countries as members. Then there is the G-90 coalition that emerged in Cancun in 2003.

But coalitions are only as strong as their economic clout. As countervailing pressure to the US/EU and Japan, the group that matters is India, Brazil, South Africa and China, particularly when the negotiating position is a collective and united one.

Therefore, the third point: Have developed countries adjusted to this altered economic reality and recognised that decision-making processes within WTO must change? Or do they still tend to take that core group for granted and believe that carrots and sticks can break it up.