Doha Round Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The Doha Round is the latest series of trade negotiations taking place within the World Trade Organization (WTO). The objective of the “round” is to further the liberalization of trade in goods and services between the 152 members of the WTO. Begun in 2001, the round has so far failed to reach agreement on controversial issues of liberalization of agricultural and manufactured goods. There are fears that failure to liberalize on a multilateral level will lead to a further regionalization of trading blocs, undermining globalization.

The Doha Round was launched at the WTO Ministerial Conference in Doha, Qatar, in December 2001. The conference came after a disastrous WTO ministerial conference in Seattle in 1999, where ant globalization protestors disrupted the talks. There was thus a clear need to show unity and dynamism in the world trading system. Launched against the background of growing skepticism on the merits of that system for developing countries, the round was presented from the beginning as a development-oriented round. It was christened the “Doha Development Agenda” (DDA) in reference to these objectives. Fulfilling the hopes of developing countries in a manner acceptable to industrialized countries has been a constant theme in the round.

Progress on the round has been slow. This is partly a result of a wide and complex agenda that went much further than that of the preceding round—the Uruguay Round. It originally covered not only services liberalization, agricultural market access (AMA), and nonagricultural market access (NAMA), but also several “nontrade issues” including the so-called Singapore issues of investment, competition, public procurement, and trade facilitation. This heavy agenda proved difficult for developing countries to manage and, in a tense ministerial conference in Cancun in 2003, the former three themes were removed from the main agenda of negotiations, leaving only trade facilitation—an uncontroversial topic.

With the removal of the Singapore issues, the most contentious negotiating topics in the Doha Agenda are AMA and NAMA. The controversies around these issues reflect the political economy of the members of the WTO. The highest tariffs in the world trading system tend to be in agriculture in industrialized countries and in manufactured goods in the developing world, particularly in emerging markets. The key negotiating point is therefore the extent to which both will agree to reduce their tariffs in these key areas.

Within the round, developing and developed countries do not always split exactly along the lines described above. In NAMA, developing countries who wish to protect their manufacturing sectors are grouped around the G20, a group of mainly emerging nations with relatively high tariffs such as India and Brazil. In AMA, developing countries are not universally in favor of full liberalization, as some still see the need to protect their own agricultural sectors. These countries are grouped into the G33, which includes India and Indonesia. Their main objective is to secure the right to maintain their market protection through the definition of “special products” where liberalization would be limited.

Another key concern for developing countries is the issue of preference erosion. Some are concerned that extensive tariff cuts could actually work to their disadvantage. These countries, such as the Africa Caribbean and Pacific (ACP) group and the Least Developed Countries (LDCs), have extensive preferential access, with little or no tariffs for their exports to several or all industrialized markets. Their concern is that a general reduction of tariffs will erode the cost advantages that their preferences assure them. These countries are grouped together in the G90. Key products of importance in this discussion are bananas, sugar, processed fish, and clothing.

Discussions between these groups have been long and torturous. Several deadlines have already been missed. The ministerial conference in Geneva in 2008 made progress on several key points leading to optimism that the round could be concluded. However agreement was not secured on the key issue of developing countries’ capacity to protect against import surges in agriculture—a major concern of the G33.

The broad lines of the agreement seem to be in place, but discussions on the numbers are the most difficult. In agriculture , there is agreement that levels of tariff cuts should vary between countries, with the EU making the highest cuts; however, the exact extent of the cuts is still at issue. The latest EU offer was for a 60 percent cut. In NAMA, there is agreement that cuts will be based on the so-called Swiss formula, an approach that results in greater cuts in higher tariff rates. The negotiations focus on the figures that decide the extent of the cuts. The latest EU offer, for example, would have left no tariff over 6 percent.

Bibliography:

Chen Deming, “China’s Top Trade Official: Don’t Abandon the Doha Round,” Business Week (Online), www.businessweek.com (cited March 2009);
Economic Implications of the Doha Round (Kommerskollegium, 2006);
Stefan Griller, At the Crossroads: The World Trading System and the Doha Round (Springer, 2008);
Rainer Hofmann and Gabriele Tondl, The European Union and the WTO Doha Round (Nomos, 2007);
Manu Kaushik, “Doha Round: Undead, But Not Quite Alive,” Business Today (September 7, 2008);
World Trade Organization, Ministerial Declaration, November 14, 2001, www.wto.org (cited March 2009).

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