VoxEU Column International trade

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

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 WTO’s 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 the future work of the organisation. It would be damaging to invest more resources and credibility in something that can't 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 Doha’s 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 in Seattle, launching the Round as a political act in the face of terrorist threats in 2001 was not an adequate foundation.

Develop the WTO’s future work programme over the next two 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 December's ministerial conference could ask the General Council 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 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.

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