Wishful thinking

Updated: Aug 1 2005, 05:30am hrs
If there is one thing for which World Trade Organisation (WTO) chief Supachai Panitchpakdi cannot be faulted, it has to be boundless optimism. Almost four years after the launch of the Doha Round, the WTO has very little to show for itself. On the contrary, bilateralism in the form of free and preferential trade agreements has become increasingly common, while multilateralism has taken a backseat. If despite that, the WTO director-general remains upbeat and thinks a trade deal is possible by the end of the year, then he is an incurable optimist. Or, as WTO chief with long experience of multilateral negotiations, he is in a better position to assess the mood of the 148 WTO members and so, feels the time is opportune for progress. We hope, for the sake of world trade, it is the latter, as optimism alone will not carry the world very far.

As has been the case right from the beginning of the Doha Round, the sticking points are essentially two agriculture and trade in services. On agriculture, weve had progress in fits and starts. The July 2004 Framework Agreement was greeted enthusiastically by member-countries last year. But a year down the line, very little has changed on the ground. With countries in no mood to agree on whether to go with the Swiss formula, the modified Swiss formula or some other esoteric formulae to work out how the intricacies of agriculture subsidies should be phased out, a consensus looks increasingly distant. The only hope is if a breakthrough is made at the ongoing talks in Geneva. In that admittedly unlikely case, we should definitely have something to celebrate in Hong Kong in December.

If a final agreement on agriculture looks difficult, the prospects of finding a meeting ground on trade in services are even more daunting. Part of the reason, of course, is the very nature of services negotiation, with every country making a request bilaterally and the other responding to the request with its offer. The net result is that any negotiation is bound to be long and protracted. In such a scenario, the world has a lot riding on the hope that Supachais optimism is not without basis.