The Doha Round - Ambitious Aims, Enduring Impasse

TABLE OF CONTENTS

1 Introduction

2 The Aims of the Doha Round
2.1 Agriculture
2.2 Services
2.3 Non-Agricultural Market Access (NAMA)
2.4 Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)
2.5 Singapore Issues

3 The Development of the Doha Round

4 Evaluation of the Aims and Discussion of Further Problems
4.1 Agricultural Liberalization and the Blocs
4.2 Being a Trade Round and a Development Round
4.3 Regional Trade Agreements
4.4 Increased Negotiating Power of Developing Countries
4.5 WTO Complexity

5 Conclusion

6 Reference List

1 Introduction

During the Fourth Ministerial Conference of the World Trade Organization, which took place from November 9th to 14th, 2001 in Doha, Qatar, a new round of WTO trade talks was initiated and became known as the Doha Round. Against the background of the September 11th terrorist attacks that had just occurred, a powerful message of stability and prosperity to the international community was to be delivered (Cho, 2007). Therefore, the aim was to boost growth, alleviate poverty, deliver more relevant trade rules and thus help to establish a more stable and certain foundation for today’s dynamic global marketplace, as WTO Director-General Pascal Lamy puts it.^[1]

The round was set to be concluded by December 2006 but to date, the parties involved have still not been able to reach a consensus on a large proportion of the issues that were planned to be resolved. After the negotiations were suspended temporarily in July 2006 and resumed in February 2007, the final outcome of the Doha round is still in the air and there are no realistic prospects of reaching an acceptable compromise in the near future (Baldwin, 2007). This became obvious when the latest attempt to reach agreements on the opening of agricultural and industrial markets and on farm subsidy cuts in developed countries failed with the collapse of negotiations at a conference in Potsdam, Germany, in June 2007.

The goal of this paper is to evaluate the aims of the Doha Round under the aspect of their feasibility, and then, to discuss the reasons for the enduring impasse of the negotiations.

In order to evaluate the aims of the Doha round, these aims will primarily be summarized in part 2. In part 3, there will be an overview over how the negotiations progressed.

The evaluation of the aims of the Doha Round will follow in part 4. This part will also include a discussion of the compatibility of trade and development aims as set forth in the Doha Development Agenda and of the implications that the conception of the Doha Round as a ‘development’ round had on the expectations of the participating countries and the effect on the progress of the negotiations. Furthermore, it will include other relevant issues that have hampered the progress of the talks. A short conclusion will follow in part 5.

2 The Aims of the Doha Round

The original aims of the Doha Round were summarized in the Work Program of the Ministerial Declaration^[2] adopted on November 14th, 2001 and in the Doha Development Agenda (DDA), which was named this way in an attempt to reflect trade’s active role in development and poverty reduction. It states that in order to maintain the process of reform and liberalization of trade policies (initiated by the acceptance of the General Agreement on Tariffs and Trade in 1947) and to ensure that the system plays its full part in promoting recovery, growth, economic development and the alleviation of poverty, the negotiations were going to especially focus on the following areas:

2.1 Agriculture

In the agricultural sector, one of the most contentious areas in international trade, the main aim is to negotiate substantial improvements in market access for all member countries trading in agricultural products. Further improvements are sought by aiming to negotiate substantial reductions in trade-distorting domestic supports such as farm subsidies and a reduction and eventually, the phasing out of export subsidies, with special and differential treatment for developing and the least developed countries.

2.2 Services

The main goal concerning the trade in services is to continue the negotiations initiated in January 2000 to achieve the objectives of the General Agreement on Trade in Services (GATS). The GATS pursues essentially the same objectives for the international trade in services as its counterpart agreement for merchandise trade, the GATT: ensuring fair and equitable treatment of all participants (principle of non-discrimination), stimulating economic activity through guaranteed policy bindings, and promoting trade and development through progressive liberalization. Even though services currently account for only about 20 per cent of total trade, new technologies and the opening up in many countries of long-entrenched monopolies (e.g. in the telecommunications sectors) have enhanced the tradability of services and thus the need for trade regulations.^[3]

2.3 Non-Agricultural Market Access (NAMA)

In this area, the main aims include the reduction of tariffs on any products that are of export interest to developing countries. This especially includes the reduction or elimination of tariff peaks, which are relatively high tariffs imposed on sensitive products amidst generally low tariff levels, and tariff escalation, which means that higher import duties are applied on semi-processed products than on raw materials, and even higher duties on finished products, as well as non-tariff barriers. Special attention is to be paid to the needs and interests of developing and least-developed countries, which are not expected to undertake the same drastic tariff cuts that are expected from other member countries.

2.4 Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)

Concerning the TRIPS Agreement, the aim is to make sure that access to existing medicines and the creation of new medicines is promoted while the property rights connected with the production of medicines are respected. The issue of property rights in this area is very important for pharmaceutical companies because medicines are a good that only yields sufficient profits to offset previous investments into research and development if the rights to produce these medicines in other countries can be licensed while a certain amount of the demand for these medicines is still satisfied via imports.

2.5 Singapore Issues

The so-called Singapore Issues included the relationship between trade and investment (FDI), the interaction between trade and competition policy, transparency in government procurement and trade facilitation, all items that were on the developed countries’ wish list (Cho, 2007). Out of these four subjects, only trade facilitation is still on the Doha agenda, because in the course of the negotiations, the aims of the round were modified several times. This was a consequence of several developing countries’ reluctance to proceed with the talks unless more importance was to be attached to the reduction in export and trade distorting domestic subsidies of agricultural products in the EU and the US. Led by the Group of 20 that includes Brazil, China, India and South Africa, many developing countries perceived this to be the most pressing issue and consequently demanded to remove negotiations on the so-called Singapore Issues from the Doha agenda. Therefore, except for the subject of trade facilitation, the other three were dropped from the agenda on August 1st, 2004.

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^[1] http://www.wto.org/english/news_e/pres07_e/pr472_e.htm (accessed November 2007).

^[2] http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm (accessed November 2007).

^[3] http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm (accessed November 2007).