THE DOHA TRADE ROUND: WHAT HOPE FOR HONG KONG? By Aurore Wanlin The Doha round of trade talks, launched in the Qatar capital in 2001, is in trouble. The members of the World Trade Organisation (WTO) have little time left to meet their ambition of helping developing countries trade their way out of poverty. George Bush’s fast-track negotiating authority – which limits the ability of America’s Congress to unravel any trade agreement – runs out in July 2007. Given rising protectionist sentiments among America’s lawmakers, another renewal in 2007 looks extremely unlikely. For this reason, trade negotiators had hoped to agree on the big political bargain at the next WTO ministerial conference in Hong Kong this month, leaving about a year to wrap up the deal. But WTO members remain heavily divided over key issues. Agriculture in particular is a major bottleneck, with the EU being pushed into a corner by its negotiating partners. The US and developing countries have rejected successive European offers on agricultural tariffs as insufficient. As a result, negotiations in other areas, in particular services and manufactured goods, are stalled. Trade ministers are now busy downplaying expectations of a major breakthrough in Hong Kong. They have the much more modest aim of trying to prevent a complete breakdown in negotiations. US trade secretary, Rob Portman, has warned against the “danger of backtracking on current offers that could lead to a complete unravelling of the talks”.1 Some will argue that there is nothing new in this crisis. Brinkmanship is part of any trade negotiation. The Doha round has run into trouble 1 ‘‘Make or break’ week for draft trade declaration’, before. At the previous ministerial conference in Cancùn in 2003, strong dissent between trade negotiators seemed to leave the whole round dead in the water – only Financial Times, for the talks to be revived less than a year later. November 6th 2005. However, a second ministerial failure would probably prove fatal to Doha. WTO members need to think hard about what they can achieve in Hong Kong. Much more is at stake than simply finishing Doha negotiations on time. The Doha round is the first proper test for the WTO. The failure of talks would call its credibility into question.
What’s wrong with Doha? ★ The round lacks leadership There is a fundamental difference between the Doha and previous trade rounds: that is the emergence of developing countries as key players, in particular the fast-growing economies of Brazil, China and India. Cancùn showed that it was no longer enough for the EU and the US to agree a deal and expect the rest of the WTO countries to fall into line. But developing countries do not form a homogeneous group. For example, the G20 group was formed to give major developing economies such as Brazil and India greater clout in trade talks. But while Brazil has a competitive agricultural industry and wants greater market access, the Indian government
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