Doha Delusions?

Breaking the inertia of the Doha Round of WTO trade talks is proving to be particularly difficult. The negotiation process is currently being tackled from two sides, one technical and one political. On a technical level the Chairs of the negotiating groups have been encouraged to spur the numbers issues (modalities) by issuing new reference papers under their own responsibility. To date the prolific agriculture Chair, Crawford Falconer, has issued two papers, while a market access for industrial products paper is expected during June. While trying, sometimes desperately, to find a so called ‘centre of gravity’, the new reference papers do not seem to be thawing the Members into the necessary melt-downs of entrenched positions. Falconer commented wryly last month that the fact that nobody liked his papers meant that ‘we are in business’. One has to credit the Chair’s indomitable spirit.

Realistically the ‘business’ is more likely to be conducted at a more politically orientated level. The negotiating sub-group, the G4 (made up of the US, EU, India and Brazil), has been meeting with great regularity, but with mixed success. In addition when the G4 have tentatively floated proposals there have been numerous voices from within the rest of WTO Membership that have been quick to point out lacunas in their efforts, South Africa among these. This highlights the difficult job of reconciling any emerging centre of gravity, even if that gravity is centred by 4 weighty players, with the aspirations of the other 146 WTO Members.

This month the big players of the developed world will add further weight to the discussion when the G4 discussions are replicated by the G8. The G8 will meet in Germany in the first week of June to probe emerging potential breakthroughs in the Doha negotiations. Time is fast running out to reach a breakthrough at a political level. This breakthrough is needed to precipitate a technical solution in the form of concrete modalities, if the Doha Round is still to be wrapped up by Christmas 2007.

The domestic political dynamics in the US and the EU will be highly influential in the coming days. This month the renewal of US Trade Promotion Authority (TPA) will come to a head with the current authority expiring at the end of June. An agreement reached on US approval for bilateral trade deals with Panama and Peru last month provides some hope that a compromise between the Administration (Republican) and the Congress (Democrat) on TPA may be in the offing. Notably leading Democrats have indicated that the Democrats do not want the US to be seen as the primary cause that the Doha Round is not completed. This may be interpreted to mean that while a broad and comprehensive extension of TPA could still be withheld; there may be a possibility of obtaining a less ambitious extension of the present TPA with just sufficient scope to complete the Doha negotiations. This is however speculative analysis and remains to be officially declared. It would however provide a handy filler to keep the talks within a do-able zone.

More entertaining though is news from the EU where the newly elected French President, Nicolas Sarkozy, decided to enter the WTO fray. Sarkozy has taken on the traditional mantle of French protectionist policy for agriculture. Sarkozy is quoted as saying that France would go as far as vetoing any WTO deal that did not satisfy its requirements on agriculture. These requirements include the resurrection of an archaic 1960’s principle of ‘Community Preference’. This simply means that the EU buys EU products first. While sounding a pleasant, perhaps patriotic tone at first ring, this type of device is most likely a prohibited subsidy in the WTO. Some precedence for this has also been expressed in the EU itself where the European Court of Justice ruled that it was not a principle of law in the EU back in 1994. It is thus unlikely that this principle will endure. However, it does leave us with the realization that there is a plenitude of pomp still to be aired before the nuts are tightened to the bolts of a Doha Round agreement.