Global Trends by Martin Khor
Monday 25 April 2011
Crunch time arrives for WTO talks
Last week the WTO issued a mega-document with reports on the Doha negotiations
which have reached an impasse with unbridgeable differences. This week
a meeting will decide on whether to continue with, suspend or end the
The differences among key countries in the World Trade Organisation’s
Doha trade talks are so wide
as to be unbridgeable in at least one major area, and the time has come
to decide on what to do about the talks – to continue trying to get
a deal this year, to admit failure and close the talks, or something
This seems to be the message coming out of the 600-plus pages of a document
issued by the WTO on 22 April, that contain reports on the state of
play of the negotiations in nine issues, plus assessments by the Director
General Pascal Lamy.
On 29 April, the WTO will meet to hear what delegations have to say
about the reports and the latest crisis-like situation.
The failures in recent weeks to make progress have deepened the impasse.
The inescapable conclusion is that these talks will not complete in
2011, the deadline set by political leaders.
There have been many missed deadlines since the talks began in 2001.
But there is now a serious feeling that if they do not complete this
year, they may never complete at all, because political events (especially
the United States elections) in 2012 and beyond will make it impossible
for a deal to be struck.
The Brazilian ambassador Roberto Azevedo, expressing frustration at
the pressures put on big developing countries by some developed countries,
had put it this way: “If this view (that developing countries have
to make even more concessions) prevails then we have not reached the
end-game, we have reached the end of the game.”
In his 21 April report, Lamy had focused on the impasse in tariff reductions
in industrial tariffs (known as the NAMA issue) and found the gaps between
developed countries and major developing countries (China, India, Brazil)
to be “not bridgeable today.”
The specific problem is that the US in particular is demanding that
these three developing countries cut their tariffs to zero (or near
zero) for three sectors (with the stress on chemicals, electronics and
The super-liberalisation in these “sectorals” is supposed to be voluntary,
but the US
wants it to be mandatory for the big developing countries.
The latter in turn think they are unfairly picked upon to carry the
whole burden of the Doha
talks. They already have to slash their industrial tariffs significantly;
with the extra load of the sectorals, the local industries would be
However it is misleading to point to the differences on sectorals as
the cause of the crisis. On one hand, the US has clarified that it
also wants more out of the developing countries in other sectors too
(agriculture and services).
On the other hand, the major developing countries resent being picked
on as the ones blocking the deal.
To them, the demands on sectorals is the last straw on the camel’s back,
epitomising the gross inequalities that characterise all the issues
in the Doha package.
Although Doha started as a “Development
Agenda” with a pledge that developing countries’ interests would be
at the centre, ironically there is hardly any development content left
in the Doha elements. This is evident from a review
of the 600-plus pages of the 21 April texts and reports.
The agriculture report mainly reaffirms the 2008 text, under which the
developed countries will be allowed to continue their high domestic
subsidies (though the nature may change). They can also shelter their
“sensitive products” from steep tariff cuts through an agreed formula.
In contrast, developing countries have to cut their farm tariffs more
steeply and widely than they did in the previous 1996 Round. And the
new special safeguard mechanism for these countries to use to prevent
import surges (that damage local farm production) is so weak it is practically
of no use.
The report on NAMA reaffirms the December 2008 text. Under this, some
major developing countries have to cut their industrial tariffs by 50-70%,
while developed countries’ cuts are only around 25%.
On average, developing countries affected by the
agreed formula will have average applied tariffs of 11-12 per cent after
the cuts, which will be damaging to their domestic industries.
But on top of these already onerous obligations, the US
backed by other rich countries are now demanding that China, India,
and others agree to super-liberalisation in the “sectorals”.
The 21 April report shows that in services, the developing countries
are also under pressure to open up to foreign competition in many sectors
such as finance, telecoms and retail trade.
But the developed countries are unwilling to open up in labour services.
Many are in fact tightening their quota of visas for foreign workers
and professionals from developing countries.
At the 29 April WTO meeting, it is unlikely that countries will stop
the Doha talks altogether, though
they may accept the 2011 deadline cannot be met. A suspension of talks
at least in some areas is an option, though the question is when are
they to resume.
The meeting may also decide on the status of the 600-plus page document.
Will future negotiations be based on this, or are other relevant documents
just as valid, such as existing proposals that are not adequately reflected
in the reports, and new proposals?
TO MAIN | ONLINE
BOOKSTORE | HOW TO ORDER