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What next for the WTO?

A FIASCO IN 1999 at Seattle and now a collapse at Cancun in 2003 speak poorly of the World Trade Organisation. After two major failures at ministerial conferences in the past four years, the WTO now faces a crisis of legitimacy. This is a crisis that goes beyond how to give a new momentum to the Doha round of trade talks. The fifth WTO ministerial conference was unable to take decisions on the two major items on the Doha agenda — on agriculture and on the four new or Singapore issues of investment rules, competition policy, transparency in government procurement, and trade facilitation. But the failure at Cancun to break the deadlock in the Doha round is only symptomatic of basic problems with the agenda that the WTO has thrust on the member-countries and the structure of decision-making at the organisation.

The Cancun conference collapsed because many developing as well as least developed countries refused to approve proposals to begin talks on new WTO treaties on the four Singapore issues. They did so because they felt that global agreements in these areas would further reduce the space for autonomy in domestic policy. India has been consistently arguing this position and did so at Cancun as well. The developing countries also said no to WTO proposals on agriculture, which they saw as formulated to accommodate the interests of the E.U. and the U.S. and failing to address the concerns of the developing world. Two years ago, the Doha round of trade talks was sold to the South as a "Development Round". But the proposals at Cancun had less to do with furthering development than with furthering the mercantile interests of the advanced economies. A decade ago such proposals might have been approved without any problem at GATT. But the developing countries, now aware of the new obligations they have been asked to take on over the past decade, will no longer agree at the WTO to demands that provide little benefit to them. The failures at Seattle in 1999 and Cancun in 2003 reflect a loss of confidence in the WTO agenda. If the WTO is to win the confidence of the developing world, it has to offer an agenda that addresses the concerns of the majority of the members. Cancun turned out to be a fiasco also because the least developed countries, in particular, were not fully involved in the formulation of the proposals placed before them for approval. True the WTO has become more participatory when it seeks endorsement of the proposals on the table. But it is still not inclusive in the preparation of these proposals. After the failure at Cancun it is now certain that the Doha round cannot be completed before the scheduled deadline of January 2005. The priority now should be to address the institutional problems at the WTO.

India went to Cancun hoping to obtain a decent agreement in agriculture and confine the Singapore issues to the ongoing study process. The Singapore issues are now as good as dead in the Doha round, but an agreement on agriculture is yet to be negotiated. The one concrete gain for India and the other members of the group of 21 developing countries is the demonstration at Cancun that their alliances can have an impact at the WTO. Such coalitions have to be strengthened if the developing countries are to have a permanent say in the making of future WTO agreements.

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