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A VoxEU.org eBook

Next Steps:

Getting Past theDoha Round Crisis

Edited by Richard Baldwin and Simon Evenett


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Next Steps: Getting Past theDoha Round Crisis

A VoxEU.org eBook


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Centre for Economic Policy Research (CEPR)

Centre for Economic Policy Research

3rd Floor

77 Bastwick StreetLondon

EC1V 3PZ

UK

Tel: +44 (0) 20 7183 8801

Fax; +44 (0)20 7183 8820

Email: [email protected]

Web: www.cepr.org

Centre for Economic Policy Research 2011

ISBN (eBook): 978-1-907142-37-6


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Next Steps: Getting Past theDoha Round Crisis

A VoxEU.org eBook

Edited by Richard Baldwin and Simon Evenett


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Centre for Economic Policy Research (CEPR)

The Centre for Economic Policy Research is a network of over 700 Research Fellows

and Affiliates, based primarily in European Universities. The Centre coordinates the re-

search activities of its Fellows and Affiliates and communicates the results to the publicand private sectors. CEPR is an entrepreneur, developing research initiatives with the

producers, consumers and sponsors of research. Established in 1983, CEPR is a Euro-

pean economics research organization with uniquely wide-ranging scope and activities.

The Centre is pluralist and non-partisan, bringing economic research to bear on the

analysis of medium- and long-run policy questions. CEPR research may include views

on policy, but the Executive Committee of the Centre does not give prior review to its

publications, and the Centre takes no institutional policy positions. The opinions ex-

pressed in this report are those of the authors and not those of the Centre for Economic

Policy Research.

CEPR is a registered charity (No. 287287) and a company limited by guarantee and

registered in England (No. 1727026).

Chair of the Board Guillermo de la Dehesa

President Richard Portes

Chief Executive Officer S tephen Yeo

Research Director Mathias Dewatripont

Policy Director Richard Baldwin


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Contents

Foreword vii

The Doha dilemma: An introduction to the issues 9and possible solutionsRichard Baldwin and Simon Evenett

There is no Plan B only Plan A: Towards completing 19DohaMari Pangestu

Acknowledge Dohas demise and move on to save 27the WTOSusan Schwab

Next Steps: Getting past the Doha Round crisis 33Ujal Singh Bhatia

Next Steps: Is an early harvest still possible? 41Zhenyu Sun

Getting past the Doha Round crisis: Moving forward 47in the WTOJohn Weekes

The good ship Doha: Salvage-and-abandon-ship or 51repair-and-wait?Stuart Harbinson

Keeping the WTO on track: A Doha down payment 61plus moreRichard Baldwin and Simon Evenett


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vii

Doha is deadlocked the members of the WTO are unable to give up and unable to go

forward.

In this eBook the contributors propose several dmarche that consider various

combinations of 4 initiatives that offer a way out of the current impasse:

Deliver a down payment

Ditch the current process of negotiating in silos it doesnt work

Develop a new and forward-looking agenda for the WTO

Demonstrate some leadership:

The down payment is straightforward. All the contributors suggest a number of area

where agreement is already close, and which could be wrapped up in time for the

December Ministerial. After a decade of negotiations, it hardly seems right to call this

an early harvest, but a set of measures that focus on the needs of the least developed

nations seems right for a Development Round.

The current approach to negotiations is clearly not working and offers no way forward.

Why not try new approaches? A number of contributors suggest abandoning the current

silo approach. The December Ministerial, they argue, should adopt a new approach,

abandoning modalities and emphasising horizontal negotiations. One contributor, ex-

USTR Susan Schwab, suggests abandoning the Round altogether and starting from

scratch.

While much of the energy in the Doha negotiations has been expended on traditional

issues such as agriculture, and market access for goods and services, there is a long list

of new issues that will only grow in importance over time. Several contributors advocate

a programme of analysis and discussion that will help members better understand issuessuch as competition policy, climate change, and government procurement.

Foreword


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VOX Research-based policy analysis and commentary from leading economists

viii

The current Doha deadlock is largely due to the absence of leadership from the major

players. Expecting leadership now from any of the Big 5 is unrealistic. Baldwin and

Evenett, drawing on their discussions with a wide-range of WTO delegations, suggest

that one demarche that could help unblock the impasse is a bold move by the middle-

power WTO members. They could seize the initiative by adopting a set of unilateral

measures to offer to liberalise trade. The new commercial opportunities this would

provide would remind exporters what they have to gain from the conclusion of the

Round.

Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency,

assembling at short notice a distinguished group of authors whose essays identify

solutions to Doha Deadlock. And as always, they have been very ably supported by

Team Vox, in particular by Bob Denham, Samantha Reid, Anil Shamdasani and Pierre-

Louis Vzina. We are grateful to them all.

Stephen Yeo

Chief Executive Officer

May 2011


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World leaders must make important decisions concerning the future of the Doha Round

for the 31 May 2011 meeting of the WTO membership. This essay introduces the issues

and summarises contributors suggestions for Next Steps. It argues that the best

outcome would be for WTO members to agree to work towards a small package of

deliverables for December 2011 and push the rest of the agenda items into the future

perhaps with specific instructions for changing the basic negotiating protocols used

to date.

Global leaders face a dilemma over the WTO multilateral trade negotiations known

as the Doha Round. The talks are dead in the water; both movement forwards and

movement backwards seem blocked. How did we get here? Current and former trade

policy officials typically emphasise two points.

Ten years of talks have made some progress but it now must be taken as a hard fact

that the Doha Round in its entirety will not finish this year.

No government is willing to announce publicly that they want to abandon the Round.

The sources of unwillingness vary. Some argue that abandoning the Round would throw

away genuine progress, such as the ultimate phase-out of agricultural export subsidies.

Others wish to maintain attention focused on particular problems in the trade system.

Yet others simply fear that theyll be blamed for delivering the bad news.

Richard Baldwin and Simon EvenettGraduate Institute, Geneva and CEPR; University of St Gallen and CEPR

The Doha dilemma: An introductionto the issues and possible solutions

99


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Next Steps: Saving the WTO from the Doha Round

World leaders must now decide how to tackle this dilemma at the WTOs next key

meeting on 31 May 2011. Logically, there are only 3 roads ahead:

Road 1: Declare failure and call for a period of reflection;

Road 2: Buy time by suspending the Round; or

Road 3: Think creatively about work-around solutions that avoid acrimony and lock

in some of the progress to date.

This eBook on Next Steps: Getting Past the Doha Round Crisis gathers the thinking

of a handful of the worlds most experienced Doha experts, namely: former US Trade

Representative Susan Schwab, Indias former WTO Ambassador Ujal Singh Bhatia,

Chinas former WTO Ambassador Zenyu Sun, Canadas former WTO Ambassador

John Weekes, and Hong Kongs former WTO Ambassador Stuart Harbinson all of

whom spent years directly engaged in Doha negotiations.

Road 1: The pitfalls of declaring failure

Susan Schwab argues strongly that declaring Dohas demise is essential to allowing

the WTO to move on. John Weekes likewise argues: It would be damaging to invest

more resources and credibility in something that cant be done. Ujal Singh Bhatia, by

contrast, argues that Road 1 could lead to unpredictable results. Zenyu Sun notes that

declaring the Doha Round to be dead would be easy, but then what? Would such an

announcement inspire people to inject more energy into the work of the organisation?

Would it serve the purpose of strengthening the multilateral trading system? I rather

doubt it, he writes.

These judgements on the medium- to long-term ramifications differ, but the short-

term fallout is clear. Declaring the Round dead would invite an immediate storm of

recrimination among WTO members. A great deal of hope and effort has been investedin the Round by nations across the globe. Most WTO members are still looking for the


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Next Steps: Getting Past the Doha Round Crisis

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Doha Round to effect critical adjustments to the world trading system especially a

rebalancing of the level of openness to agricultural versus industrial trade (Nassar and

Perez 2011). If one or more of the Big-5 reject a deal that most members still think is

doable, the blame game could get very nasty.

There is a great danger that this level of ill-will could undermine multilateral trade

cooperation for years. It could lock in the growing perception that the WTO is not a

place where serious negotiations can be conducted. The US in particular is likely to

be subject to severe criticism in a way that might have the unintended consequence of

convincing US Congressional and private sector groups that the WTO is not a forum

where America can do business. Such an outcome would serve no ones interests.

Despite the clear logic of Schwabs and Weekes arguments, the pitfalls highlighted

by Bhatia and Sun find resonance with most world leaders. This is why almost every

WTO member opposes Road 1. As a consequence, it is extremely unlikely that WTO

members will decide to declare Doha dead any time soon.

Road 2: The pitfalls of suspension

Suspension is certainly the most politically expedient choice for the Big-5, and it

is superficially attractive. The logic is well expressed in the old story about a man

condemned to death by his Emperor who obtains a years stay of execution by

promising to teach the Emperors horse to sing. Much could happen in a year, the man

reasons. The Emperor could die, I could die, the horse could sing.

But the usual merits of muddling through dont apply to Doha. Suspensions have been

tried so often that everyone would know that suspension is just a circuitous means of

killing the Round; Road 2 is just the long route to Road 1. All the pitfalls of Road 1

therefore also apply to Road 2.

But suspension would be even worse in many ways. The world of trade is changing more

rapidly than negotiating positions, so each delay seems to make a compromise based on


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the existing elements even less likely. Worse still, a suspension would strengthen and

spread the belief that the WTO is not an appropriate venue for multilateral negotiations.

As Ujal Singh Bhatia writes: the Round will continue to hang like an albatross around

the WTOs neck, preventing it from addressing new challenges to the global trading

system. This would be particular worrisome since the world economy is moving into a

phase of great stress. It is facing new challenges that will require multilateral solutions

issues like food security, natural-resource export restrictions, and trade in goods,

services and technology that are essential to climate-change adaption and mitigation.

Road 3: A small package followed by a big package

The third road seems the most likely way to move past the Doha dilemma of not being

able to move forwards or backwards on the broad agenda. The idea here is that the

agenda would be sorted into do-able and not yet do-able piles. Nations would move

forward on a small package of do-ables for December 2011 while agreeing to discuss

the bigger issues later under revised ground rules that would be more likely to permit

the trade-offs necessary to make the big package acceptable to all members.

As Stuart Harbinson puts it, Doha is like a ship run aground; a small package of

deliverables for December 2011 would act as a patch to keep the good ship Doha

afloat until the high tide comes in and lifts the ship off the rocks. In this analogy the

high tide would be a change in the global economic and political seascape, enabling

the major trading economies to settle their differences and bring the ship safely into

harbour, he writes.

Choices to make on the small package

All five experienced trade negotiators contributing to this eBook and most of the WTO

delegations with whom we spoke believe that it is worth trying to lock in agreement

on a small number of areas by the end of 2011. There are two critical issues to decide:


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1. How much time should be spent on negotiating the small package?

2. Which items should be in the small package?

The contributors disagree over the first issue. Susan Schwab argues for giving it not

more than 2 weeks; others suggest longer. They all, however, recognise that a prolonged

and contentious negotiation on a small package especially one that ultimately proved

fruitless would solve nothing and might harm the system.

There is far more agreement on the second issue possible composition of the small

package. All the contributors, and most of the WTO delegations with whom we spoke,

suggest that some items on Dohas massive negotiating agenda are close to conclusion.

Indeed, the lists are remarkably similar despite the vast differences in the contributors

perspectives. They all point out, however, that striking even a very restrained list of

agreement will require abundant goodwill and hard negotiating.

Suggestions for the small-package items include:

Some sort of accord on duty-free, quota-free treatment for least developed nations;

A waiver that allows WTO members to provide preferential access to services trade

from least developed nations;

An agreement to reduce distortions in cotton to the benefit of least developed na-

tions;

A package of measures that promote trade facilitation, i.e. reducing barriers to

imports stemming from excessive red-tape barriers in customs, inferior port infra-

structure, and other non-trade-policy impediments to trade;

An agreement on a monitoring mechanism for special and differential treatment;

An agreement to make permanent the transparency mechanism for regional trade

agreements that has been operating successfully for years;

An agreement on certain non-tariff barriers;


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An agreement formalising cooperation between the WTO and various multilateral

environmental agreements.

Other issues may ultimately prove tractable or necessary to provide balance. Those most

often mentioned include a standstill agreement on fisheries subsidies, certain aspects

of the less controversial rules negotiations, and export subsidies. Such a package could

also include other DDA matters for which the negotiations could be completed quickly

or non-DDA matters where the WTO membership is at one, such as the promising

negotiations to upgrade the WTOs Agreement on Government Procurement.

The final issue is what to call the small package; this is not a trivial matter.

One option is to just boldly call the small package the Doha Round to declare

victory and move on.

While this would clearly disappoint many, it speaks to the objective of not letting the

Round drag down the WTO not allowing the WTOs credibility to be further damaged

by endless discussions that can never led to a happy ending.

Of course, this option would leave unsolved the core Doha issues reducing distortions

in and improving market access for industrial goods, agricultural products, and services

trade, and updating the rules. But it might allow members to re-craft the parameters of

the negotiations in a way that would be more likely to lead to success. This is clearly

the view taken by Susan Schwab and John Weekes. As John Weekes puts it: Not

completing the Doha Round would be a serious setback to the WTO and the multilateral

trading system. However, if it is clear that the Round cannot be concluded successfully,

it is better to admit that and work constructively to develop an agenda for the future

work of the organisation.

Another option would be to wrap up the collection of small agreements into a package

called the Doha down payment or Doha deliverables, or Doha early harvest as a

way of stressing that all the Doha agenda items are still on the table.


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A third option would be to view the individual items as standalone agreements to be

agreed by the ministers of WTO members at the December meeting without clear

reference to what comes next.

This brings us to the next major element of the Road 3 pathway: What to do with the

rest of the agenda?

Choices to make on the big package

Albert Einstein once defined insanity as doing the same thing over and over and

expecting different results. This makes it clear that any complete plan for a way past the

Doha dilemma must change something in the way the negotiations have been operating.

Any multilateral trade negotiation involves choice on a series of negotiating rules

or conventions. The Doha Round has accreted an odd constellation of these. Some

are fundamental and therefore extremely difficult to change. These include the idea

that everything must be agreed by all before anything is agreed (the so-called single-undertaking principle) or the choice to focus on the particular tariff-cutting formula

known as the Swiss formulas. But many of the choices are less central, such as the exact

way in which flexibilities on tariff-cutting are to be decided.

The ramifications of these procedures on the negotiating dynamic were not well

understood years ago when the original decisions were taken. The lack of understanding

is even deeper when it comes to the joint operation and interaction among the

conventions.

For these reasons, the set of negotiating conventions that guide Round may no longer be

optimal. Consideration of the pros and cons of alternatives might identify other ways of

finding a package of trade-offs that is acceptable to all.


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The forward-looking agenda

A number of contributors suggested that the process of rebuilding momentum and

confidence in the ultimate outcome could be boosted by agreeing to launch work

programmes (not actual negotiations) on how the WTO could address 21st-century

trade issues that have come to the fore since the Doha agenda was set in 2001.

Here, there are two basic lines. The first would consider WTO institutional reform; the

second would consider new issues, such as new disciplines to underpin the increasing

convergence of trade, investment, and services (as is now routinely done in regional

trade agreements), setting limits on acceptable national climate policies with trade

implications, or export restrictions.

There certainly seems merit to these idea. If nothing else, it would interject new

dimensions to discussions that have been going on for a decade. It would also make

it clear that we need to safeguard the WTO as a forum for multilateral discussions on

critical 21st-century issues.

Concluding remarks

Many decent, hard-working public servants have committed plenty of energy to the

Doha Round since its inception. At this critical time, any temptation for recriminations

or lapses into bitter disappointment should be set to one side to let governments chart a

new path for the WTO. The circumstances facing WTO members in the middle of 2011

are hardly ideal, and the set of options that stand any chance of acceptance is narrow. In

times like these, it would be a mistake to make the perfect the enemy of the good. It is

time to think creatively and cooperatively about getting the WTO past the Doha crisis.

A decision, or non-decision, that led to several more years of drift years that will be

complicated by elections and changes in governments in some of the leading trading

powers could turn out to be the beginning of the end for the WTOs role as leaderof the global trading system. The alternative uncoordinated developments led by the


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Big-5 in their own systems of regional trade agreements is a very plausible outcome

at this stage, but not one that will ultimately serve anyones long-run interests.

References

Andre Nassar and Carlos Perez (2011). Why WTO members should not give up the

Doha Round: The case of agricultural trade, in Richard Baldwin and Simon Evenett

(eds.), Why World Leaders Must Resist the False Promise of a Doha Delay, VoxEU,

April.
http://www.voxeu.org/index.php?q=node/6434http://www.voxeu.org/index.php?q=node/6434http://www.voxeu.org/index.php?q=node/6434http://www.voxeu.org/index.php?q=node/6434


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Doha is stalled by gaps that are unbridgeable today. Indonesias Trade Minister argues

that we need to be guided by priorities and pragmatism. We should develop a set of

stepping stones that will help us complete the Doha Round eventually. We should

identify the areas that are achievable in the very near future but which have an impact

on development while building confidence for the continued journey to a successful

Round. We should never lose sight of the final goal completing the Doha Round as a

single undertaking. In short, we are not looking for a Plan B; we are looking for a

new way to execute Plan A.

The importance of completing the Doha Development Agenda sooner rather than later

goes beyond bringing gains of $360 billion of additional trade with substantial benefits

for industrialised and developing economies (HLTE 2011). The importance also goes

beyond what pragmatic soothsayers who are telling us: Why are you worried, the

WTO system will continue to be robust whether we conclude Doha or not. Companies

and countries will continue to trade. As a developing country policy maker and I

believe I speak for many other developing countries I am greatly worried about the

costs and opportunity lost of not completing Doha.

The costs of not completing Doha

I will point to four costs of not completing the Doha Round.

First is what it could achieve for food security.

Mari PangestuMinister of Trade, Indonesia

There is no Plan B only Plan A:Towards completing Doha

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During the 2008 food crisis, imbalances between supply and demand were partly

attributed to distorted agriculture prices caused by trade-distorting export subsidies

and domestic-support schemes. The agriculture package in Doha will go some way to

address this. In todays situation of high commodity prices, now is the perfect time to

address the removal and elimination of such trade-distorting policies. Removing these

distortions can only be achieved through multilateral negotiations, not through bilateral

or regional agreements.

Most importantly, the winners would be the billions of hungry and poor people all over

the world; correcting the system and ensuring the future supply of food and greater

price stability is very much in their interests. For example, in Indonesia a 10% increase

in the price of rice, without any change in income, would lead to a 1% increase in

poverty.

Second keeping protection at bay.

During the depth of the crisis benign protectionism was the order of the day, according

to the self-reporting surveillance mechanism established by the WTO at the request of

G20 Leaders. This allowed the rebound of trade to become one of the costless ways for

the global economy to recover. It is ironical that in the recovery, the latest report (WTO

2011) shows that there has been a slight increase in protectionism causing an estimated

impact of 0.6% to G20 exports.

The main increase has been due to tariff increases, automatic licenses, and other

restrictions including export restrictions. Whilst this is still small, it is nevertheless

double from the previous period. Restoration of the confidence in the world trading

system through clear signals that we are progressing on completing the Round is crucial

to keeping protectionism at bay. Developing countries such as Indonesia have a great

interest in this because only the multilateral trading system will provide the fair, rules-

based trading system for us to face large and more developed partners on a fair and

equal standing.


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Third the lack of progress on the Doha Round already has, and will continue to raise

the pressure to undertake bilateral and regional free trade negotiations.

In the ASEAN region there are already FTAs between ASEAN and all six of its dialog

partners (Australia, China, India, Japan, Korea, New Zealand), and numerous bilateral

FTAs. The EU has just completed negotiations with Korea, which has put pressure

for the Korea-US FTA to be ratified as soon as possible. The EU has also completed

negotiations with India, and is negotiating with Singapore, Malaysia, and preparing

to do so with other ASEAN countries. Recently China, Korea and Japan announced

revitalization of their FTA initiative. Furthermore we have the Trans-Pacific Partnership

initiative between 8 members of APEC.

It is not the bilateral and regional free trade agreements which are problematic per

se; it is negotiating them in the absence of a robust WTO system a system which is

seen as meeting the needs of the current and future trade-linked issues. Bilateral and

regional agreements can only work towards complementing the multilateral trading

system when they are WTO-plus, not WTO-instead.

Fourth the potential dampening effect on unilateral reforms.

The political economy of openness in trade policy and institutional reform have always

functioned better within the framework of international commitments. Multilateral

rules impose an important caveat on what countries can or cannot do. In a country like

Indonesia this has worked to our advantage in the way we frame our reforms, and in fact

has functioned in the past to put bad policies to rest.

For instance in the famous National Car case in the mid 1980s, which violated the

MFN principle by allowing duty-free imports of cars only from one source country, the

domestic politics at the time did not allow for policymakers to remove this policy. The

policy was finally ended through the WTOs dispute settlement mechanism. It would

be too bad for reforms if the process is undertaken within weakened confidence of

multilateral trading system, or one which will eventually not be relevant to the evolution

of 21st century trade issues.


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The Way Forward: No Plan B

Despite G20 Leaders commitments, and all the good intentions and intensive work in

Geneva that came after the push given by trade ministers during their informal meeting

in Davos in January 2011, it proved impossible to arrive at a draft text by the end-of-

April milestone. There remains unbridgeable gaps in a number of main negotiating

groups, namely non-agriculture market access.

Given this situation, trade ministers met first during the APEC Ministers of Trade

Meeting in Big Sky Montana, and then on the fringes of the OECD meeting in Paris.

Fortunately all have agreed that we all remain committed to completing Doha as a single

undertaking. However, there was a sense of realism as to the timing and pathways to

achieve this desirable outcome in a timely way.

From an Indonesian perspective there is no Plan B. We do not support a Doha

Light, and we remain committed to a comprehensive, ambitious, and balanced package

building on what we have achieved to date.

After almost 6 years of negotiations since the key Hong Kong WTO Ministerial, I

believe we are more than 50% or some would say 80% of the way done. A realistic way

forward is to identify the sequence of steps that would take us to the final outcome; this

is necessary to avoid the costs and lost-opportunities I outlined above.

This is not about an early harvest or cherry picking and then stopping. It is about

identifying the steps forward in a meaningful way towards the final goal of the single

undertaking of Doha.

Identifying stepping stones to a nal Doha Roundconclusion

There are areas within the negotiations that could be seen as steps towards the final

package. Of course work and political will is still needed to find ways to bridge the


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unbridgeable gaps. In identifying the areas where we could find convergence, a number

of priorities stand out.

First and foremost is areas of negotiations that will contribute and deliver to devel-

opment objectives such as the Least Developed Countries package and/or an effec-

tive aid-for-trade, and facilitation package; this is, after all, a Development Round.

Second areas where there would be clear benefits for development and the private

sector in facilitating and ensuring the benefits of trade are greater; we need stake-

holders to be cheerleading the way forward.

Third there could be areas where we would be able to address the food-security

challenge.

One could also foresee that, within each current area of negotiations, there could be

items which could be wrapped up without disturbing the overall balance of elements

in that particular area. It is important that we do not go into new negotiations in

identifying which areas. We should go into the mode of identifying these pathways and

steps with the mindset and political will of win-win.

We need to be guided by priorities and pragmatism. That is, to identify the areas that are

doable and achievable in the very near future, but which have an impact on development

and increasing the benefits of trade, while at the same time building confidence for us to

continue our journey to the final package. Most importantly, we should never lose sight

of the final goal of the single undertaking.

Looking forward

It is also important to provide the signal in what we say and do elsewhere. Beyond

talking about Doha, we must ensure continued confidence in and implementation of the

rules-based, open trading system.


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This would mean the commitments of G20 Leaders and others on refraining from

protectionism going beyond words; the good intentions need to be strengthened

with commitments and actions.

It also has implications for how we undertake bilateral and regional agreements;

these should be done in a way that is not an alternative to, and does not detract from

the multilateral trading system. We should pursue regionalism in a way which is

going to contribute to and complement the system.

Concluding remarks

In conclusion, we should not underestimate the costs of not doing all this. We will

need to draw upon the strength of our individual and collective political commitment.

We need to call on the ability of some major economies to look beyond pure national

interests, and to look at the impact and costs on the global system and economy. And we

need to remember that there are many countries and billions of people many of which

are impoverished who are waiting for the Doha deliverables.

References

HLTE (2011), World trade and the Doha round, final report of the High-Level Trade

Experts Group chaired by Jagdish Bhagwati and Peter Sutherland.

WTO (2011). Reports on G20 trade and investment measures (mid-October 2010 to

April 2011), WTO Secretariat, 24 May.

About the author

Mari Pangestu is Indonesias Minister of Trade since 2004, having served as Executive

Director of the Jakarta-based think tank, the Center for Strategic and International

Studies, and a lecturer in the Faculty of Economics at the University of Indonesia. From

1991 to 1998, Dr. Pangestu was the coordinator of the Trade Policy Forum of the Pacific
http://www.voxeu.org/sites/default/files/file/__Trade-experts-group-final%20report-26-05-2011.pdfhttp://www.wto.org/english/news_e/news11_e/igo_24may11_e.htmhttp://www.wto.org/english/news_e/news11_e/igo_24may11_e.htmhttp://www.wto.org/english/news_e/news11_e/igo_24may11_e.htmhttp://www.wto.org/english/news_e/news11_e/igo_24may11_e.htmhttp://www.voxeu.org/sites/default/files/file/__Trade-experts-group-final%20report-26-05-2011.pdf


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Economic Cooperation Council, and serves on the Board of the Overseas Development

Council; World Gold Council; and the Asian Journal of Business from The University

of Michigan, Ann Arbor.

She has published widely on a range of subjects including matters pertaining to

Indonesia as well as regional (i.e. Asian and Asia Pacific) and global issues. She earned

her B.A. and M.A. in economics from Australian National University, and a Ph.D. in

economics from the University of California, Davis.


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The Doha Round has failed, according the former US Trade Representative Susan

Schwab. This essay argues that prolonging Doha jeopardises the multilateral trading

system and threatens future prospects for WTO-led liberalisation. Negotiators should

salvage whatever partial agreements they can from Doha, and quickly drop the rest

to ensure the December ministerial meeting focuses on future work plans rather than

recriminations over Doha.

The Doha Round has failed. It is time for the international community to acknowledge

this sad fact and move on. Prolonging the pretence that the Doha Round will succeed

is now a greater threat to the WTO and the multilateral trading system than facing the

truth.

A great many smart, hard-working and well-intentioned individuals have worked over

many years to realise Dohas potential to contribute to global economic growth and

development. But what is on the table in Geneva has failed to deliver any outcome,

let alone a meaningful one. It is time for a swift, clean break from the past and to

lay the groundwork for a future where the WTO and its members revive WTO-led

liberalisation and reform.

End Dohas stranglehold and build towards near-term wins

To keep the multilateral trading system healthy, it is necessary to end the Doha

Rounds stranglehold on the system. This should happen quickly in order to ensurethat the December 2011 ministerial meeting focuses on future work plans, rather than

Susan SchwabUniversity of Marlyand; former U.S. Trade Representative

Acknowledge Dohas demise andmove on to save the WTO

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recriminations about a Doha Development Agenda that has struggled through one failed

encounter after another.

Negotiators should refocus their efforts on near-term wins and on building the next

Round which need not be another behemoth, but perhaps a rolling round of reforms

and new market access, or a few highest-common-denominator plurilateral, or WTO-

plus deals. Ultimately, these should lead to a broader-based market access and rules

agreement under the multilateral auspices of the WTO.

The small package possibility

In my recent Foreign Affairs article (Schwab 2011), I suggested that negotiators should

try to salvage whatever partial agreements they can and then walk away from the rest.

I mentioned a number of potential candidates, such as trade facilitation and the largely

completed agricultural-export pillar (comprising proposed agreements on export credits,

food aid, state-trading firms, and the elimination of export subsidies). Negotiators

might also try to complete two environment-related agreements, one cutting subsidies

to industrial fishing fleets that are overfishing the worlds oceans, and the other ending

tariff and nontariff barriers to green technologies in major producing and consuming

countries. Taken together or individually, each of these would benefit countries across

the spectrum of economic development.

I am, however, sceptical that even these small agreements are achievable in the current

climate of mistrust and entrenched positions. A troubling development during the course

of the Round has been how often countries seem to forget or forfeit their own economic

interests let alone the greater good in the face of peer pressure and group-think. In

the current environment, even these smaller deals might prove impossible to achieve.

It is certainly worth trying to achieve a few deliverables by taking a run at a small

package, but negotiators should not spend too much time on it. They already know

exactly what the options are; if they cannot get to yes in, say, two weeks, they should


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give up and move on to the real challenge of launching a new series of multilateral

negotiations under WTO auspices.

Getting past Doha

How to conclude the Doha Round? One option would be for the Director-General and

a representative sample of WTO Ambassadors to come together in the interest of the

institution and to offer a declaration of Dohas demise, along with their pledge to begin

building the future. That would enable leaders at the November G20 meeting to pledge

their support for the rules-based trading system, the WTO and its next steps, rather than

for the ever elusive balanced and ambitious Doha outcome.

After a short period of grieving over the death of Doha and an opportunity to get

beyond the anger, lead trading nations should refocus on getting the WTO back into

its mainstream business of negotiating mutually advantageous market opening, and

updating the global rules of the road. This approach offers the best promise of a

meaningful development outcome as well.

How might this be achieved?

It seems unrealistic to think WTO members would agree to launch another massive

all-or-nothing round in the near future. Such broad negotiations, however, will be

necessary to tackle some of the worlds most important market access challenges in

services, manufacturing, and agriculture, along with such issues as farm subsidies.

There are ways to build-up to the big-round model again, where countries once more see

economic self-interest in the use of broad-based negotiations and trade-offs to achieve

both new market access and market reforms. First, however, we must re-establish trust

and regain momentum.

One way forward would be for ministers to agree to launch a number of confidence-

building negotiations. For example, ministers in December could decide to open talks


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on expanding the 1997 Information Technology Agreement; a number of nations

seem interested and the US Administration already has the authority to implement an

enhanced agreement. If negotiators fail to work through the 850 brackets in the current

Doha trade facilitation text, that could also be tackled as a stand-alone agreement, since

each nation would benefit from more efficient movement of goods and services across

borders.

Another confidence-building measure might be a merger of sectoral agreements geared

toward a widely-shared objective, such as cheaper, better healthcare. A package that

included pharmaceuticals, medical devices, and healthcare services might attract

support from the broad array of WTO members across the development spectrum. Given

the high-level of public interest in and awareness of environment issues, a sectoral

negotiation on environmental goods and services might be another confidence-building

deal, once it is removed from the straightjacket that Doha has become.

Lessons from Doha for next steps and the next round

Confidence building agreements would offer modest economic and social contributions,

and serve to prepare the atmospherics for launch the next Round. This brings me to my

last topic the lessons we should draw from a decade of Doha talks.

One thing that is quite clear from years of struggling with the basic structure of Doha

is that the combination of formula and self-selected flexibilities has not worked. It

resulted in a situation where every negotiator had to assume the worst case knowing

the political costs they would pay for their own liberalisation, but expecting their trading

partners to use flexibilities to negate any meaningful new market-access. It is possible

to draw from the best of the Doha formulas such as the higher the barrier, the greater

the cut while still creating real negotiations around them through requests and offers

delivered using above- and below-formula cuts.


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Another key lesson is that lumping the worlds very diverse economies into three

basic categories developed, developing, and least developed is a practice that no

longer fits 21st century economic and trade realities. Nor is it a structure conducive to

negotiations and real progress based on an exchange of market access among nations

with large markets. Yes, the advanced economies should be expected to do more than

those at lesser stages of economic development, but expectations should also reflect

the fact that many emerging economies are characterised by both poverty and sectors

where they are globally competitive trade powerhouses.

The emerging economies have large markets, represent over half of global GDP growth,

and stand to be the biggest winners from any major trade agreement. They should be

expected to contribute to the next Round accordingly. Major trade agreements generally

take at least 12 years to implement from the time they are initially concluded. What

should the world trading system look like in 2025 in terms of the absolute and relative

responsibilities of key trading nations?

Concluding remarks

I am optimistic when it comes to the multilateral trading system and the WTOs central

role in its governance. The optimistic scenario is that we put the Doha Round behind

us. Facing facts can invigorate and strengthen the trading system. If we fail to act, the

WTO risks losing its relevance.

The Doha Round which in my view cannot be concluded as it is conceived today

should not be allowed to continue draining the WTOs credibility and potential progress

on the multilateral front. Now is the time to liberate the would-be trade liberalisers from

the Doha straightjacket and move on.


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References

Schwab, Susan (2011). After Doha: Why the negotiations are doomed and what we

should do about it, Foreign Affairs, May/June.

About the author

Ambassador Schwab has been a Professor at the University of Maryland School of

Public Policy since January 2009 and a strategic advisor to Mayer Brown, LLP (global

law firm) since March 2010. Ambassador Schwab served as U.S. Trade Representative

from June 2006 to January 2009 and as Deputy U.S. Trade Representative from

October 2005 to June 2006. Prior to her service as Deputy U.S. Trade Representative,

Ambassador Schwab served as President and Chief Executive Officer of the University

System of Maryland Foundation from June 2004 to October 2005, as a consultant

for the U.S. Department of Treasury from July 2003 to December 2003 and as Dean

of the University of Maryland School of Public Policy from July 1995 to July 2003.

Ambassador Schwab serves on the boards of Boeing Company, Caterpillar Inc. and

FedEx Corporation.

She holds a B.A. in Political Economy from Williams College, a Masters in Development

Policy from Stanford University (Food Research Institute), and a Ph.D. in Public

Administration and International Business from The George Washington University.
http://www.foreignaffairs.com/articles/67719/susan-c-schwab/after-dohahttp://www.foreignaffairs.com/articles/67719/susan-c-schwab/after-dohahttp://www.foreignaffairs.com/articles/67719/susan-c-schwab/after-dohahttp://www.foreignaffairs.com/articles/67719/susan-c-schwab/after-doha


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Hopes for finishing Doha in 2011 are fading fast. This essay suggests a three-track

approach for moving beyond the Doha crisis. 1) Identify a package of deliverables

parts of the Round that could be agreed by December 2011. 2) Assemble a package of

contentious issues for ongoing negotiation with clear terms of reference. 3) Establish

a work programme to consider WTO institutional reform and forward-looking issues.

For reasons that are too well known to be repeated, the WTO finds itself at the crossroads.

Decisions to be taken in the next few weeks will determine whether it can steer its

way to a successful conclusion of the Doha Round in the near future. Failing this, the

Round will continue to hang like an albatross around the WTOs neck, preventing it

from delivering the promised boost to least developed nations and freezing its ability

to address new challenges to the global trading system. All countries would suffer from

such an outcome, but especially the worlds poorest and most vulnerable.

The cost of a never-ending Doha Round

The adverse implications of a continuing Doha impasse on the future role of the WTO

are too compelling to be dismissed offhandedly.

Several trade-linked global problems require global cooperation. Food security, energy

security, trade-related aspects of climate change, labour mobility, commodity price

volatility, and integration of regional liberalisation into the multilateral system are

problems that can only be solved with global cooperation.

Ujal Singh BhatiaFormerly Indias Ambassador and Permanent Representative to the WTO

Next Steps: Getting past the DohaRound crisis

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For example, if food exporters continue to impose export barriers when prices rise,

food importers may respond with import barriers to boost self-sufficiency. This sort of

protectionist reverberation could lead the world to a situation in which all the players

are worse off but none can improve the situation unilaterally. Avoiding this sort of

outcome would require global agreements. There are very few global institutions that

could manage such cooperation; indeed the WTO might be the only one. A WTO locked

in endless Doha debates cannot be the centre of the rules based global trading system.

There are many thinkers who believe that the structure of WTO rules is robust enough

to withstand a Doha failure. It is true that the sky will not fall if Doha is terminated

without a conclusion. Such analysts, however, tend to underestimate the significant

structural changes taking place in the global economy and the trading system. The

WTO is working on a set of rules agreed upon in 1994 that were based on an agenda

set almost a quarter of century ago. These are still useful and relevant for much of

world trade but not all. For instance, the rules were not designed for the technology-

driven fragmentation of the manufacturing process and the distribution of the productvalue chain across several geographical locations, the intertwining of production with

related services, the embedded intellectual property rights in components and sub-

components, or the multiplicity of rules of origin. All these require a different approach

to rule making.

A WTO that remains preoccupied with the Doha Round cannot be expected to focus

on such issues. Therefore, the continuing relevance of the WTO and its primacy in

the global trading system are contingent upon a successful and early conclusion of

the Doha Round. Notwithstanding this urgency, it is now clear that a Doha package

cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010.

To prevent this from tying the WTO in knots for years to come, it is necessary to think

creatively about ways forward.


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Ideas for moving beyond the impasse

Any effort to deal with the impasse in the negotiations needs to be based on a holistic

appreciation of the systemic implications of a continuing stalemate as much as on the

negotiating positions of various members. The efforts for a solution acceptable to all

members therefore need to focus on issues in the Doha mandate as well as on issues for

a post Doha situation.

Within this framework, four constraints need to be borne in mind:

A Doha Lite of reduced ambition will not work. The outcome has to reflect a dec-

ades efforts of the global community. Ambition, however, cannot be defined to suit

the convenience of a few members. It must touch all aspects of the Doha mandate.

Aspects of the Doha mandate that are more relevant to the development dimension

have to be ambitiously addressed and fast tracked.

WTO needs to start work on a new work programme to address new challenges.

The Doha Round cannot be completed in 2011. A down payment is necessary from

the Doha Round this year to convince the world that the WTO can deliver.

A three-track approach

These constraints require the WTO to adopt a three-track approach during the next few

months leading up to the ministerial meeting in December 2011.

Track 1: Identification of a list of issues that specially address the trading interests

of smaller developing countries and relatively less contentious issues, for fast tracked

finalisation before the ministerial meeting.

Track 2: Identification of a package of the more contentious issues for continuing

consultations with clear terms of reference.

Track 3: Identification of appropriate terms of reference for a work programme on

WTO institutional reform, and the forward-looking agenda.


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A possible timeline

These three tracks, taken as a package, would provide a way forward that respects all

four constraints. Achieving consensus on them would be difficult and require months

of preparatory work and negotiations.

If the WTO membership starts immediately, however, there is still time to get the

package ready for finalisation by ministers at the December 2011 ministerial meeting.

For this to happen, it is essential that discussions on such a package begin this month

so that its contents can be finalised by the end of June 2011. This would leave about

four working months before the ministerial meeting to complete negotiations on the

selected areas.

What the three tracks might contain

The first track would contain the Doha down-payment package. As with any WTO

package the contents would need to be negotiated, and it might require complementary

policies such as technical assistance initiatives.

Such a list must include items that speak to development aspects of the Doha mandate,

such as:

The Implementation of the Hong Kong decision on duty-free, quota-free treatment

for less developed countries;

A ministerial decision on the Monitoring Mechanism for Special and Differential

Treatment provisions;

A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-

porters (the group known as the C-4); and

The finalisation of a less-developed-country (LDC) waiver in services so that pref-

erential treatment can be provided to LDCs in services without extending it to

others.


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It should also include areas of the negotiations that engage the interest of all members

such as:

Trade Facilitation;

All aspects of export competition in agriculture including export subsidies;

The Transparency Mechanism for regional trade agreements (RTAs);

The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA);

and

A ministerial decision on interactions and relationships between the WTOs rules

and its committees, on the one hand, and existing multilateral environmental agree-

ments, on the other (e.g. the Basel Convention on the Control of Transboundary

Movements of Hazardous Wastes, and the Montreal Protocol on Substances that

Deplete the Ozone Layer).

While some members would like to exclude some of these areas from a fast tracked

process in the hope of using them for trade offs in the final stage, it is important that the

package is as comprehensive as possible.

Track two: Items for further negotiation

The second track would gather all remaining items currently under negotiations. This

would include:

All aspects of market access in industrial goods, agriculture and services;

All aspects of subsidies in agriculture;

Various aspects of rules, including fisheries subsidies;

Environmental goods; and

Issues related to trade-related aspects of international property rights (TRIPS) re-

garding the protection of Geographical Indicators, and the protection of traditional


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knowledge and folklore that were are mentioned in the Convention on Biological

Diversity1

.

The need for a balanced package deserves emphasis. It is often assumed that there

is a straight trade-off between agricultural subsidies and market access. The situation

however, is more complex. The interest of countries like India, China, and Indonesia

in agricultural reform is more systemic than export related. For them other incentives,

within the mandate, will be required.

Track three: Looking ahead

The underlying theme for the work programme would be an appraisal of the entire

negotiating and decision-making process in the WTO in the context of the present

realities both within and outside the organisation. The objective would be to prepare

the WTO to address new challenges to the global trading system concurrently with the

ongoing work on the remaining parts of the Doha mandate.

Closing remarks

The above proposals constitute a basic template for addressing the Doha conundrum.

To what extent they are actually embraced will depend on how much political capital

the major members of the WTO are prepared to invest in moving the Doha Round

forward. There is much scepticism about whether such political will exists. It is time

for governments to prove the sceptics wrong.

1 Specifically, as specified in paragraphs 18 and 19 of the Doha Declaration.


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About the author

Ambassador Bhatia Singh joined the Indian Administrative Service in 1974, holding

several senior positions in provincial administration in Orissa State between 1976 and

1995. He served as Joint Secretary, Ministry of Commerce and Industry between 1995-

2000, in which capacity he handled a number of bilateral, regional and multilateral trade

negotiations. From 2004 to his retirement in 2010, he served as Indias Ambassador and

Permanent Representative to the WTO in Geneva.


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Doha is deadlocked. This essay argues that the options are: i) to declare the negotiations

dead, ii) to suspend them until after the US elections, or iii) to negotiate an early-

harvest agreement for the end of this year. The author strongly believes that the early

harvest is worth the extra efforts for both the WTO and the worlds poorest.

I am greatly interested in the discussions among experts and professors recently on the

future of the Doha Round. While I can feel their strong sense of frustration about the

deadlock, I dont see any real possible solutions for the problems at hand. I dont have

one either. The lack of a solution is probably due more to political problems than to

technical problems.

Next steps

To announce that the Doha Round is dead would be easy. But then what? Would such

an announcement inspire people to inject more energy to the work of the organisation?

Would it serve the purpose of strengthening the multilateral trading system? I rather

doubt it.

After dropping the Round, what could be done next? Just continue with business as

usual? Should members only focus on trade policy reviews, on regular meetings in the

bodies under the General Council, and on dispute settlement cases? Should they take

it for granted that the panellists and Appellate Body members will be able to fill in

the gaps of writing new rules for the world trading system? This does not sound veryattractive.

Zhenyu SunChina Society for World Trade Organization Studies

Next Steps: Is an early harvest stillpossible?

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The need for progress and the difcult options

If the WTO is to remain relevant, its members must negotiate new rules. How could

they do this? Could there be a completely new round sometime later? Or could there

be new rules or amendments of the old ones adopted at each and every council or

committee separately?

One option would be to launch a new round. To start a new round post-Doha, however,

could be even more difficult than the Doha Round itself. People have tasted the

failure of Seattle. In any new round members could not ignore the built-in agenda of

agricultural subsidies, or discussing the tariff-cutting formula on agricultural and non-

agricultural products, or services trade, and rules. It may still be difficult to cover labour

and environmental standards. In any case, the hard bargaining over the past 10 years

would not disappear with the start of a new round.

Another option could be to rule out all rounds after Doha. To not even to talk about the

single undertaking any more, i.e. to abandon the negotiating principle, heretofore

respected, where all WTO members must agree to all aspects of the final package. This

option would just let the councils and committees continue with their normal functions,

setting new rules and amending old ones on their own. I personally believe this option

might be feasible, but it is not in line with 60 years of WTO common practice. Members

may not like this option because it could rule out trade-offs across interests in other

areas.

Early harvest as the way forward

If dropping the Round is not an attractive option, and if waiting till after the next US

election is likewise unappealing, the only option left is some kind of early harvest to

be adopted at the December 2011 ministerial meeting.

I am fully aware that some members are strongly against the idea of an early harvest.Even if they could eventually negotiate a duty-free quota-free agreement for the worlds


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poorest nations, an agreement on cotton, and an agreement on trade facilitation, they

are unlikely to agree to implement them now because they will need to use these issues

to negotiate trade-offs with their other interests. I would like to make an appeal to those

members.

Guarding the future of the multilateral trading system

It is high time that people gave more considerations to the future of the multilateral

trading system and less to their short-term national economic interests. As the APEC

leaders reiterated at a recent summit:

We uphold the primacy of the multilateral trading system and reaffirm that this

strong, rules-based system is an essential source of sustainable economic growth,

development, and stability. We take considerable satisfaction in the success of

the WTO, its existing framework of rules, and its consultative mechanisms in

contributing to the beginnings of global economic recovery. The WTO has amply

proven its worth as a bulwark against protectionism during a highly challenging

period.

I do hope that people take this statement seriously. This means giving thought to ways

to save the credibility of this organisation, to deliver the promise of a development

round, and to make sure that this organisation is still relevant to 21st century trade

matters. Safeguarding the future of the WTO is particularly important at a time when

the world has experienced the global financial and economic crisis, the upheaval in the

Middle East, and when we face great uncertainties.

Content of the early harvest

Certainly there could be more detailed discussions on what issues should be included in

the possible package. If members are willing to move along that line, there is still time

to finalise the content. My friend Ujal Singh Bhatia (WTO Ambassador from India until


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2010) has indicated some areas where members could try to build consensus and adopt

a decision at the December 2011 ministerial meeting (Bhatia 2011). I strongly believe

that it is worthwhile to make some extra efforts along the lines he has proposed.

In any case, duty-free-quota-free treatment for LDCs and the issue of cotton have to

be included in the package.

These are decisions taken at the Hong Kong Ministerial Meeting; its immediate

implementation would be conducive to addressing the great concerns of the poorest

countries and thus very much in line with the principle of the Doha Development Round.

Trade facilitation could bring benefit to all members.

It could help trade expansion enormously and bring even more benefit to trade than

would further reduction of tariffs. It could also help President Obama achieve the goals

of doubling US exports in the next 5 years and substantially increasing employment at

home.

The date for expiration of export subsidies at 2013 was adopted at the Hong Kong

ministerial meeting and should be included in the package.

The EU may want to bring in some other issues to balance its interests. Personally, I

believe it is doable through adding some issues of their interest, such as environment

products, to the package.

Concluding remarks

When they meet in Geneva this December, I am sure that members would prefer to have

their trade ministers making some kind of substantive decisions. An early package for

the Doha Round is probably a suitable one for the ministers to consider and to deliver

at their meeting later this year.
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References

Singh Bhatia, Ujal (2011), Salvaging Doha, VoxEU.org, 10 May.

About the author

Zhenyu Sun, the Chairman of China Society for World Trade Organization Studies,

served as the Ambassador and Permanent Representative of China to the WTO from 2002

to 2010. He served as vice minister of Moftec (Ministry of Foreign Trade and Economic

Relations, which later became Mofcom, Ministry of Commerce) from November 1994

till 2002 when he went to Geneva as WTO Ambassador. Born in Fengnan County

of Hebei Province in March 1946, Mr. Sun Zhenyu graduated from Beijing Foreign

Languages Institute in July 1969. From 1973 to 1985, he served successively as staff

member, Deputy Director and Director in the Third Department for Regional Affairs of

the Ministry of Foreign Trade. During this period, he worked on bilateral trade relations

between China and UK, later between China and European Community. From 1985 to

1990, he worked as Vice President of China National Cereals, Oil and Foodstuff Import

and Export Corporation (COFCO), focusing on the companys business with Japan and

South-east Asian Countries.

In 1989, he attended one year program of Management Training Course for senior

executives sponsored by UNDP in cooperation with University of British Colombia,

Canada and Manchester University UK. From 1990 to 1994, he served as Deputy

Director General and Director General of Department of American and Oceanic Affairs

of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC), working on

bilateral trade relations with U.S., Canada, Australia, New Zealand and Latin American

countries during this period. He participated on separate occasions in Sino-US bilateral

negotiations on Market Access, Textiles and Intellectual Property Rights.
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The Doha Round is stuck. This essay argues that finishing Doha would be best, but

if this is impossible, we should admit it and move on. Investing more resources and

credibility in a failure would only damage the WTO and multilateral cooperation.

Leaders should turn their energies towards building an agenda for the WTOs future

work that responds to 21st century interests. Getting this right is critical; the WTO

cannot afford another failure if Doha dies. An early harvest is an excellent idea, but

only if it can be done quickly.

Bringing the Doha negotiations to a successful conclusion is by far the best course of

action. The valuable contribution that such a development would make to strengthen the

trading system has been examined at length elsewhere. No single achievement would

be more valuable than binding in the WTO rulebook the current level of trade protection

maintained by its members in all three areas of market access industrial goods,

agriculture, and services. This action would permanently capture the considerable

liberalisation that has taken place since the effective conclusion of Uruguay Round in

1993. It would also set a new start line for the launch of any subsequent negotiations,

which will surely come before too long.

If Doha cannot be completed

Not completing the Doha Round would be a serious setback to the WTO and the

multilateral trading system. However, if it is clear that the Round cannot be concluded

successfully, it is better to admit that and work constructively to develop an agenda for

John WeekesBennett Jones LLP

Getting past the Doha Round crisis:Moving forward in the WTO

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the future work of the organisation. It would be damaging to invest more resources and

credibility in something that cant be done.

The WTO itself remains an extremely valuable institution. Its worth has been proven

by the role it played in discouraging its member governments from taking protectionist

actions during the recent global economic crisis. The continued accession of new

members to the organisation is a further indication of just how valuable it is to the

international community. In a world of global supply chains, business needs a set of

multilateral rules within which to operate now more than ever.

Avoid the blame game

If the members decide that the Round cannot be brought to a successful conclusion

it will be important to avoid recrimination. One thing is clear; a major and sustained

effort has been made by all the members to try to deliver a successful outcome. While

avoiding recrimination, WTO members should spend some time reflecting on the

reasons for the current difficulties.

One common mistake is to argue that the WTO as a whole is too big. Many outside

observers suggest that, with 153 members, the WTO is too unwieldy an organisation

to address the challenges of 21st century trade, particularly when decisions are taken

on the basis of consensus. It is important to note, therefore, that blockages preventing

conclusion of the Round are not the large number of members, but rather differences

among the largest and most powerful trading countries, who would need to be party to

the conclusion of any major trade negotiation.

One reason for Dohas problems is that the preparatory process for the Round was

inadequate. While the built-in agenda that emerged in Marrakesh led to useful work

and provided a good basis in some areas, it did not permit the sort of broad thinking

that should have gone into preparations for a major negotiating effort. After the failure


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in Seattle, launching the Round as a political act in the face of terrorist threats in 2001

was not an adequate foundation.

Develop the WTOs future work programme over the nexttwo years

WTO member governments should now begin to plan the future work programme of the

WTO. The last major work programme undertaken in the multilateral trading system

began at the fractious GATT ministerial meeting in 1982. The work then undertaken in

the GATT was supported by efforts undertaken in other international organisations and

domestically by the various contracting parties (as members were called back then).

The product of those efforts became the basis for launching, and then concluding, the

Uruguay Round negotiations. Obviously the world of 2011 is very different from that of

1982. Global supply chains and the seamless connections between trade in goods, trade

in services, and investment present a series of new challenges for the trading system.

Members should start to plan the future work now. But this is work that should be done

properly and not in haste. One of the problems with the 1990s built-in agenda was that

it was very difficult to introduce any new items into the discussion, even including

consideration of further tariff liberalisation. In order to avoid such difficulties, it would

be useful to develop the future agenda over a two-year period. Ministers at Decembers

ministerial conference could ask the General Council and the Director-General to

consider the matter and come forward with suggestions for the future work of the

organisation at the next ministerial conference in 2013.

Do we need Doha down payments?

Many players and observers have raised the question of what might be salvaged or

harvested if the Doha Round cannot be finished this year. This is an excellent idea

provided it can be done quickly and efficiently. If, however, it is going to take, say, more

than six months, the effort should be abandoned. I suspect it will not be easy to agree


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on which parts of the Doha Round should be salvaged given the different priorities of

WTO members. The effort would also serve the purpose of testing whether the WTO

can negotiate agreements outside the context of a round. It would be very useful to have

an answer to that question.

Concluding remarks

If the Doha Round is not successful, the WTO cannot afford another failure. Building

a solid agenda for the future work of the WTO that responds to the real interests of its

members needs to be a central task of the organisation.

About the author

John Weekes is senior international trade policy adviser at Bennett Jones LLP with

a long experience in trade diplomacy and trade policy. He was Canadas Ambassador

to the WTO from 1995 to 1999, and Chair of the WTO General Council in 1998. He

was instrumental in the creation of the Committee on Regional Trade Agreements and

served as its chair from its inception in 1996 until he became Chair of the General

Council. Prior to that, he was Canadas Chief Negotiator for NAFTA (1993 to 1995),

and Canadas Ambassador to the GATT during the last multilateral trade negotiations

(Uruguay Round). He was a member of Canadas negotiating team to the Tokyo Round

of GATT negotiations in the 1970s. He is on the Board of the Washington-based Cordell

Hull Institute, and Chaired the Management Board of the Advisory Centre on WTO

Law in Geneva.


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Stuart HarbinsonSidley Austin LLP

The good ship Doha: Salvage-and-abandon-ship or repair-and-wait?

The core Doha goals better market access and rules for agricultural, industrial, and

services trade still matter, but Doha is a ship run aground. This essay argues that the

choices are: i) to abandon ship and try with a new ship later, or ii) to patch up the holes

by delivering some progress in December 2011 and then wait for a high tide to carry us

off the rocks. Only the latter is likely to achieve the core goals.

The good ship Doha is well and truly stuck on the rocks. Lets make no mistake the

rocks are substantial and there is no magic solution that will instantaneously get us off

them. The choice now facing us is to salvage what we can and abandon ship, or to patch

up the holes, wait for a high tide, and sail on.

While the agenda is 10 years old and showing its age in some respects, few are currently

advocating its abandonment. This is because the issues at the heart of the Round still

matter namely, market access and rules for trade in agriculture, industrial products,

and services. The critical test for deciding on immediate next steps should be whether

they would facilitate or complicate ultimate resolution of these difficult issues.

Salvage and re-launch new negotiations: An option thatwont work

With a ministerial conference coming up in December, attention has turned to what

some call salvage. A salvage operation implies that the vessel is no longer seaworthy;

we should just grab what we can and leave the ship to smash itself to pieces on the

rocks. We would then have to look for another ship. One of the problems with this

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scenario is that it would take quite a while to design and construct a new vessel suitable

for WTO negotiations. Even then, the new ship will have to negotiate its way around

many of the same rocks. The problems we face in agricultural and industrial market

access, for example, will not simply disappear.

Its tempting to think that we can simply salvage a few things, forget about Doha, and

start all over again with a better chance of success. The reality would surely prove to

be quite different.

Repair and carry on

This leaves us with the option of repair-and-carry-on (though not necessarily in the same

way as in the past). We would thereby acknowledge, as Ujal Bhatia Singh eloquently

put it recently, that we are lashed to the mast of Doha (Bhatia 2011). This, however,

should not be interpreted to mean that the WTO as an institution is locked in a death

embrace with the Doha Round.

Deliverables for the ministerial conference could constitute a patch to keep the ship

afloat until the high tide comes. In this analogy the high tide would be a change in the

global economic and political seascape, enabling the major trading economies to settle

their differences and bring the ship safely into harbour.

Admittedly there is an element of hope in this, but on balance it does not seem likely

that the present, highly inimical environment (recession, unemployment, exchangerate issues, major domestic policy preoccupations, etc.) will persist indefinitely.

Furthermore, as a result of intensive work in recent months, key members are now

much clearer about the remaining gaps and what it would take to bridge them a very

useful position from which to restart at the right time.
http://ohttp//www.voxeu.org/index.php?q=node/6497http://ohttp//www.voxeu.org/index.php?q=node/6497


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The Doha Round is durable for a reason

That the Doha Round persists after the vicissitudes of over nine years of negotiations

is testimony to its robustness. The widely held view that it was launched off-the-cuff in

reaction to the tragic events of 9/11 without substantive business or political backing

is not borne out by the historical record, nor does it tally with my own experience as

Chairman of the General Council at the time.

In the first place, it is inconceivable that such a complex undertaking could have

been agreed in the space of two months. Efforts to launch a round in fact began well

before the ill-fated Seattle Ministerial Conference in 1999. These efforts received

considerable reinforcement from the failure of the Uruguay Round built-in agenda

negotiations on agriculture and services to deliver results. Recall that the Agreement

on Agriculture refers to the Continuation of the Reform Process, a process to which

many governments and industries were and still are strongly committed. Many

services industries, stimulated by the WTOs successes in moving forward in financial

services and basic telecommunications in the late 1990s, were similarly champing at the

bit. While it is true that there was also some opposition, the history of the preparatory

process in 2001 shows clearly that, well before 9/11, the working hypothesis for the

Doha Ministerial Conference was the launch of a new round.

As the first chairman of the Doha agriculture negotiations commencing in 2002, I can

also testify personally to the intense business and political interest at that time. If such

interest has subsided, this could be ascribed to the apparent lack of movement in the

negotiations and the changing political and economic dynamics since the Round was

launched.


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Deliverables would be welcome as long as expectations

are reasonable

Given the extremely strong commitment displayed by WTO members both in launching

the Round and resolutely pushing it forward over an extended period, as well as the

high-level political commitment restated only six months ago, a concerted effort to

identify a decent number of deliverables for the eighth ministerial conference in

December would certainly be welcome.

Nevertheless it might be prudent not to invest too much expectation in this process.

There is a danger that such an exercise would involve multiple shopping lists which

would prove in a number of instances to be irreconcilable. The last thing the WTO

needs at present is to have a lengthy and acrimonious discussion about deliverables

culminating in a paltry agreement or, worse still, no agreement at all.

Possible deliverables

The emphasis on deliverables should be on the rules elements of the Round since

market access remains highly contentious and linkages make it unlikely that partial

results could be delivered. Even within rules, few issues come without caveats attached.

Among the candidates (concentrating on Doha issues, in no particular order) appear to

be the following:

Trade facilitation is most often mentioned, although substantive issues remain to beresolved, including technical assistance.

It is questionable if an agreement should be rushed into if it involves too many

compromises. However, if it can be delivered, this would be a major boost.

An agreement on the export competition pillar in the agriculture negotiations would

also be a very substantive contribution.

Whether the political will exists to settle this in advance of the remainder of theagriculture package is a question that will need to be answered.


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Domestic regulation in services may be considered as another significant possibil-

ity.

However this item is linked with market access and the stumbling block of the necessity

test issue remains, so the chances may not be great.

Non-tariff barriers: There should be a trawl through the negotiating issues in an at-

tempt to identify possible deliverables.

Realistically, an agreement on transparency may be the most likely.

The least-developed country waiver in services is more feasible though its utility is

limited without services commitments.

Progress building on the duty-free-quota-free (DFQF) market access commit-

ments for least-developed country agreed at the Sixth Ministerial Conference would

be highly desirable.

However, there are political issues to be overcome. Reviews of Generalised System

of Preferences (GSP) schemes in the US and EU may be a complication, and duty-

free-quota-free raise the tricky issue of rules of origin; there is a very real issue to be

resolved here and concerns over circumvention must be addressed.

Cotton also falls into the highly desirable category.

Political realities in the US may still prove to be an insuperable obstacle in 2011,

although it may be possible to grapple with these at a later date with a new US Farm

Bill and especially if the Round as a whole is concluded.

Agreement on a monitoring mechanism for special and differential treatment

would be useful.

Though perhaps not in itself a major achievement, this would constitute a welcome

confirmation that the development component of the Round is not sliding off the deck.

Definitive implementation of the transparency/monitoring mechanism on regional

trade agreements.


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This would be a strong signal that the WTO is developing its surveillance function

steps, doha round

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