Trade Compliance

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Time to Pull the Plug on Doha: USTR

Posted December 14, 2015

As government ministers from around the world gather in Nairobi, Kenya to once again discuss lowering barriers to trade as part of the World Trade Organization’s “Doha Round” of talks that have been ongoing since 2001, U.S. Trade Representative (USTR) Michael Froman for the first time publicly called on the WTO to abandon a perpetually deadlocked process that “simply has not delivered” on its promises.

“Getting it unstuck begins with acknowledging that Doha was designed in a different era, for a different era, and much has changed since,” Froman wrote in an opinion piece published in the Financial Times ahead of the biennial conference. “It is time for the world to free itself from the strictures of Doha.” The WTO needs to “write a new chapter… that reflects today’s economic realities,” the USTR said.

Since the talks began in Doha, Qatar 14 years ago, they have been characterized by splits between advanced economies and still developing countries over contentious agricultural trade and food security issues, particularly those involving government subsidies and so-called “safeguard” provisions that would allow developing nations to erect protective import tariffs on various farm goods. 

“Now, some emerging markets are the biggest providers of agricultural subsidies but would be exempt under Doha from cuts. If you are a poor farmer facing a global market distortion it does not matter where the subsidies causing it came from. Artificial distinctions between developed and emerging economies make no economic sense,” Froman wrote.

Since discussions broke down catastrophically in 2008 over these issues, many countries have instead opted to pursue bilateral and regional trade deals, as well as more limited sectoral agreements; all of which “are working,” at least according to Froman. “Only multilateralism — the attempt to reach a comprehensive global deal — is stuck.”   

In run up to the talks this week, other advanced economies in the world such the European Union and Japan have signaled their support for the Obama administration’ push for a new approach to negotiations after the Nairobi meeting and a general shift to more focused discussions on a narrower range of trade issues rather than aiming for unanimity on a comprehensive global agreement. Paradoxically though, while representing a majority of the global economy and world trade, advanced countries and their supporters remain vastly outnumbered in the 160-member WTO, in which decisions are made by consensus.

India, China, Brazil and many of the world’s less advantaged nations are sure to push back against the U.S. plan to finish the Doha negotiations, seeking instead to keep the international focus on economic development, a position likely supported by WTO director-general Roberto Azevêdo, who penned an op-ed of his own for the Wall Street Journal earlier this month setting out what’s at stake in Nairobi. While bilateral or regional trade deals are easier to reach, Azevêdo said, having a single set of global standards would be more effective.

“Failure to agree on a package of important measures, especially those prioritized by our poorest members, coupled with disagreement on the future path for WTO negotiations, may leave the organization rudderless,” he wrote. “This at a time when rising global economic uncertainty and persistently slow trade growth requires governments to provide direction, clarity and innovative policy prescriptions.”