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Last chance for Doha

A WTO report on world trade released last month advocated a reinforced trading system to serve as the anchor of economic activity. The Doha development round might have had a chequered history since its launch in 2001, but according to Secretary-General Pascal Lamy, its early completion is the best hope yet for bringing stability to the global markets including the seriously disrupted financial markets. One month later that hope does not seem to be entirely baseless. It lo oks certain that there would be a ministerial meet to resolve the contentious issues in agriculture trade and non-agricultural market access (NAMA). These two were delinked from other issues and official level discussions at Geneva have helped in the finalisation of drafts in those two critical areas. There have been substantive differences in the past over both agriculture and NAMA. Despite the chairpersons’ assertion that major differences had been sorted out, many countries including India have found the two drafts deficient in some vital aspects. The NAMA draft has been criticised on a number of counts. For instance, contrary to the original Doha mandate, it has not incorporated the flexibilities the developing countries require to keep their sensitive industries out of the tariff reduction commitments. Equally important, the principle of “less than full reciprocity” in tariff cuts has been given the go-by. In certain cases, developing countries are expected to cut their tariffs by a higher proportion than developed countries.

From India’s point of view, the agriculture draft too is deficient on several counts. Protection of subsistence farmers is a non-negotiable issue but the draft does not give sufficient manoeuvring space. Specifically, the rules relating to special safeguards mechanisms that deal with a sudden surge in imports are too restrictive. There needs to be greater clarity on issues such as percentage cuts in trade-distorting subsidies the developed countries should undertake. While the forthcoming high level negotiations can be expected to iron out these and other differences, it is important for developing countries not to break ranks by yielding to blandishments and incentives the developed countries might offer them individually. India has done well to agree to participate in the proposed high level meetings but it cannot obviously accept any binding commitments unless the basic flaws in the two drafts are rectified. The benefits of multilateralism are many, but it must be realised that the odds for a successful conclusion of the Doha round have lengthened considerably.

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