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Keeping the Doha round alive

A significant achievement of the just concluded Hong Kong ministerial meet of the WTO may well be the unanimous approval of the draft text by all 149-member countries. Yet such unanimity, while welcome from the point of view of keeping alive multilateral negotiations centred on the Doha round, ought not to be interpreted as a major substantive gain. The expectations from the ministerial meet were toned down substantially because of continuing differences over issues related to agriculture as well as non-agricultural market access (NAMA) and services. The earlier hope was that two-thirds of the Doha round agenda could be wrapped up at Hong Kong, leaving the balance for 2006. On the eve of the ministerial meet, such an outcome seemed remote. In the event, the most favourable verdict might well be, as WTO Director-General Pascal Lamy assessed it, that it has managed to put the (Doha) round on track after a period of hibernation. But that also implies that many substantive issues remain unresolved, raising the stakes for the ministerial meet to be held by April 2006.

India and other developing countries have reasons to be satisfied that they were able to negotiate as a bloc. However, even the few issues that were settled in their favour are subject to caveats and conditionalities. The phasing out of export subsidies on agricultural products by 2013 is claimed to be the biggest single concession wrested from the developed countries. For this to be effective, certain loopholes that allow hidden subsidies in export credit and food aid will have to be plugged. The phase-out is a small but important step but much needs to be done in the area of domestic support, where only the broad modalities for subsequent negotiations have been arrived at. Even the deal on cotton — expected to benefit some of the poorer African countries — is subject to an agreement being reached on eliminating all export subsidies by 2006. Under this arrangement, while the U.S. will abolish export subsidies on cotton by next year, India and other developing countries can retain higher tariffs to protect their farmers and ensure that food and livelihood concerns are met. Their need for a special safeguard mechanism based on price and volume triggers has been recognised. In NAMA, developing countries are not required to cut tariffs to the same extent as the developed countries. While the principle of "less than full reciprocity" has been recognised, there is no agreement on the exact mechanics for such reductions. Only subsequent discussions will bear out whether the developing countries have given away too much under NAMA in return for concessions in agriculture. There has hardly been any progress on the services front this time. From the standpoint of multilateral trade, the Hong Kong meet may be termed a modest success but, for the development agenda, it has only served to sharpen the focus on the more contentious issues that are pending.

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