Whither the WTO Doha Development Round?

By Elizabeth Morgan

In an article on December 21, 2018, the Financial Times declared that the WTO Doha Round had finally died a merciful death after nearly a decade spent comatose. This reflected the view of the developed countries, which was not necessarily supported by all developing countries.

The World Trade Organization (WTO) was established in 1995 superseding the General Agreement on Tariffs and Trade (GATT) to negotiate, adjudicate and administer global trade rules. The WTO resulted from the last GATT Round, the 1986-1994 Uruguay Round (UR).

By the first WTO Ministerial Conference (MC1), Singapore, December 1996, many developed countries and trading powers were talking about launching a new round of multilateral trade negotiations which would address newer issues such as investment, competition policy (fair trade), government procurement, trade facilitation, core labour standards and environment standards. Most developing countries, including CARICOM Members, were not enthusiastic about entering into a new round of negotiations so soon after the GATT UR as they were still struggling to implement the resulting Agreements.

Thereafter, there was continued strong opposition to a new Round from developing countries and global non-governmental organizations (NGOs); recall the Seattle (MC3) conflagration in 1999. The new round was not launched until MC4 at Doha, Qatar, in November 2001, with much pressure exerted by the developed countries. The compromise was that the Round would focus on development issues. New issues, investment, government procurement, competition policy and trade facilitations, would be further studied. Labour and environment standards were dropped. This Doha “Development” Round would address agricultural products, non-agricultural products (industrial including fisheries) known by the acronym, NAMA, services, and various trade-related and development specific issues including Special and Differential Treatment (S&DT) and Small Economies. In CARICOM’s interest, a work programme emerged to specifically benefit Small Vulnerable Economies (SVEs). The general aim of the Round was to improve market access and enable developing countries to increase their share in global trade.  This Round was scheduled to conclude in 2005 by MC6.

In 2004, the WTO General Council decided to commence negotiations on Trade Facilitation from the group of new issues.

By MC6 at Hong Kong, December 2005, it was clear that the Round could not be completed within the set timeframe. Resulting from this Conference was the Aid for Trade Initiative.  It encouraged donors to target development support specifically to building trade infrastructure in developing countries in order to improve their ability to benefit from trade. Aid for Trade was viewed with skepticism by many developing countries considering it an appeasement attempt as their development concerns were not being satisfactorily addressed.

From 2006, the Doha Round negotiations continued with limited progress. Agriculture was a particularly difficult issue as developed countries demanded increased access into the markets of emerging developing countries and developing countries had concerns about subsidies applied in developed countries. It was also evident that development, as defined by developing countries, was not at the core of the Round. Development for developed countries was all about market access. In S&DT concessions, developed countries were also wanting emerging economies and middle income developing countries to be graduated or given more differentiated treatment. WTO Members included in this category were China, Brazil, Singapore, Chile, India, Taiwan, and others. CARICOM countries could also be affected. This S&DT proposal from the USA and others was another bone of contention. An opportunity to break the deadlock and conclude the Round was missed in 2008.

In the intervening period, countries began to increasingly negotiate complex bilateral and plurilateral free trade agreements mainly outside of the WTO. These included the Trans-Partnership (TPP) and the Trade in Services Agreement (TISA).

Progress in the Doha Round was not recorded until MC9, Bali, Indonesia, December 2013, when the Agreement on Trade Facilitation was concluded and adopted. Jamaica was actively engaged in the conclusion of this Agreement.

Thereafter, the developed countries began to speak of the Doha Development Agenda, not Round. The focus was on specific issues such as application of subsidies in fishing (Fisheries Subsidies). By MC10 in Nairobi, Kenya, December 2015, the developed countries, the original proponents of the Round, were in search of means to suspend it. The view was that they actually did not want to declare the Round’s death in Kenya, the first African developing country to host a Ministerial Conference. The Nairobi Declaration reflected the divisions in the WTO on the Round’s status recognizing that some Members reaffirmed it, while others did not believing new approaches were necessary to achieving desired outcomes. This signalled that the developed countries had not gotten what they wanted and were ready to move on.

MC11, in Buenos Aires, Argentina, December 2017, was considered by many as a requiem for the Round. This Conference ended without a formal ministerial declaration. The Chair, Argentine Minister Susana Malcorra, concluded in her Statement that there would be life after Buenos Aires but it was for the Members to give meaning and value to it.

The situation at the WTO became more difficult with the election of US President Donald Trump in November 2017. The Trump Administration’s “America First” policy was anti-multilateralism and particularly belligerent towards the WTO. There was talk of the US withdrawing from the Organization. The Administration did not favour multilateral trade negotiations; refused to approve members of the WTO Appellate Body in the dispute settlement mechanism; moved towards more protectionist policies unilaterally applying tariffs on steel and aluminum; and commenced a bilateral dispute with China.

Perhaps, fearful of US withdrawal, feeling that the global trade environment had radically changed and concerned about the WTO’s future, some Members began to look at a new direction for the Organization considering a work programme on other issues, such as e-commerce, state-owned enterprises, micro, small and medium enterprises (MSMEs), women’s economic empowerment, and investment facilitation.

The EU, Canada, and other developed countries put forward proposals and begun consultations on WTO reform. For political reasons, some developing countries have joined these initiatives. Hence the Financial Times’ conclusion that the Doha Round has died.

There are still many developing countries from all regions who do not share this view of the Round’s demise and are uncomfortable with current proposals for WTO reform. Thus, it is reported that the atmosphere in the Organization is quite unstable as Members begin to look to MC12 in Astana, Kazakhstan, in June 2020.

Where does CARICOM stand? It seems that CARICOM believes that there is unfinished business in the Doha Round especially for SVEs. On WTO reform, it appears that CARICOM needs to give this matter more serious consideration.  The CARICOM Council for Trade and Economic Development (COTED) and Member States need to be following developments at the WTO more closely, assessing the state of play, and the implications for the Region in order to arrive at clear positions to guide delegations.

 

Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics.