/ 24 April 2011

Doha trade round faces risk of collapse after 10 years

Make-or-break talks will be held in Geneva this week to rescue the troubled Doha international trade round, amid fears that a deepening rift between rich and poor countries will see the collapse of almost 10 years of negotiations.

After months of stalemate, the World Trade Organisation has set a deadline of Friday for the leading players to cut a deal in the key area of industrial tariffs. Pascal Lamy, the WTO’s director general, described the situation as “grave” after seeing no signs of a breakthrough since the start of 2011.

He had said it was crucial for progress to be made by Easter if there was to be any chance of completing the round by the end of this year. In a clear warning about the state of the talks, Lamy said negotiators should “think hard about the consequences of throwing away 10 years of solid multilateral work”.

“This is the diplomats in Geneva raising the white flag,” said Jeffrey Schott, a fellow of the Peterson Institute thinktank and a former US trade negotiator. At the G20 summit in Seoul last year, world leaders committed themselves to completing the long-running talks, but Schott said “the G20 leaders have dropped the ball on this”.

With little evidence that the leading developing nations — China, India and Brazil — are prepared to bow to US and European Union pressure to make deeper cuts in the protection offered to their manufacturers, the mood at the WTO’s Geneva HQ was sombre this weekend. Lamy is expected hold a series of informal “green room” discussions on Thursday before calling trade negotiators together on Friday, but few in Geneva are expecting a breakthrough.

Europe’s trade commissioner, Karel de Gucht, said “there is no reason to be optimistic at this moment in time” and that it was time to start thinking about a “plan B” should the talks collapse.

Deadlock
South African trade and industry minister Rob Davies said: “I think there are basically two choices. Either [the Doha round] doesn’t go anywhere, which I think is probably the most likely scenario, or, if it does, then [South Africa is] going to be asked to pay a packet more. That’s basically it.”

Brazil’s ambassador to the WTO, Roberto Azevedo, said that if the deadlock could not be broken, the next question was what, if anything, could be salvaged from the talks, which began in the Qatari capital in November 2001.

“I believe we are confronted with a clear political gap which … is not bridgeable today,” Lamy said in his foreword to a summary of the state of talks released late last week.

The Doha round was launched amid much fanfare in the aftermath of the 9/11 attacks, as rich countries promised to level the playing field for producers from the developing world to win access to lucrative markets.

US trade representative Ron Kirk admitted that the gulf between developed and developing countries such as China remained large, but that it was premature to announce that the round was dead. He added that Washington wanted to work towards a deal, but Lamy believes that time is now rapidly running out if the talks — involving agriculture and services as well as manufactured goods — are to be completed before the 2012 presidential race begins early next year. “The truth is, the emperor’s got no clothes,” said one Geneva insider.

But Duncan Green, head of research at Oxfam, said political priorities had changed since the negotiations began: “The world’s moved on an awful lot in the past 10 years, the trading relationships have changed. Winning access to northern markets for southern producers still matters, but it’s not the be all and end all. I think we should move on to greater prizes ahead.” – guardian.co.uk