Doha Round Essay

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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: 

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

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