August 30, 2009
GENEVA (Reuters) – India is hosting a meeting of about 36 trade ministers this week to "re-energise" the Doha round of trade talks.
World Trade Organisation (WTO) members launched the Doha round in the Qatari capital in late 2001 to boost the world economy and help developing countries prosper through trade.
World leaders have called for the round to conclude in 2010.
WHY ARE TRADE MINISTERS MEETING NOW ON THE DOHA ROUND?
World leaders have been calling for a Doha deal for 10 months now, but negotiators on the ground in Geneva are still stuck in their positions.
India’s new trade minister, Anand Sharma, is keen to get some momentum into the negotiations, as the United States and Europe return from the summer break, in the run-up to the G20 summit in Pittsburgh at the end of September.
Cynics say India also wants to show it is doing all it can with the Doha talks so that it does not get blamed if the whole thing collapses. Sharma’s predecessor Kamal Nath was regularly blamed in Western media for blocking the round.
WILL THE DELHI MEETING NEGOTIATE A DEAL?
No. The Indian hosts say concrete negotiations on specific issues are not on the agenda. But they hope that ministers from major trading powers will draw up a timetable and give the Geneva negotiators their orders to get down to work.
Some of the key players may also seize the opportunity to tackle some of the substantive issues.
The complex talks focus on cutting tariffs and subsidies in agricultural goods and tariffs on industrial products from cars to chemicals. But they also involve freeing up trade in services like banking and telecoms and in environmental goods, regulating fisheries subsidies and adjusting rules on unfair imports.
AREN’T LEADERS CALLING FOR A DOHA DEAL ALL THE TIME?
Yes. Leaders repeated the call at the G20 summits in Washington in November and London in April as well as the G8+ summit in L’Aquila in July. And trade ministers echoed the call in June at a meeting of farm exporters in Bali and again at the Organisation for Economic Cooperation and Development in Paris and in July at a meeting of the Asia-Pacific APEC grouping.
The problem is that their exhortations are not leading to action in the detailed negotiations. Diplomats in Geneva are now complaining about the "mismatch" between words and action.
SO WHAT’S HOLDING THEM BACK?
Many countries say they are waiting for the United States, which is the key to any deal, to start engaging in the negotiations now that President Barack Obama has taken office.
But the Americans — who will probably cut their farm subsidies in any deal — want to be able to point to new opportunities for U.S. business.
In particular they are pressing the big emerging countries like China, India and Brazil to open their markets and not make excessive use of special arrangements for developing countries in a Doha deal to shield their industries from competition.
U.S. diplomats say their efforts to hold bilateral talks with these countries to establish their bottom lines are being resisted.
What it comes down to is that everybody is waiting for everyone else to show their hands, but no one is willing to show their hands because they do not think the end-game has started.
WHY AREN’T THE AMERICANS ENGAGING?
The Americans say they are — witness their efforts to have bilateral talks with other countries.
But the fact is, trade is a low priority for the Obama administration. It is concentrating on the economic crisis (some people say a trade deal is part of the solution) and healthcare.
The new White House still has not completed its trade team, although the new U.S. Trade Representative, former Dallas mayor Ron Kirk, has made a good impression on America’s partners.
WHO WILL BE THERE?
About 36 ministers, representing major developed economies, such as the United States and European Union; the big emerging countries, such as China, India, Brazil, Indonesia and South Africa; and developing countries who coordinate regional alliances, such as Mauritius for the African, Caribbean and Pacific countries, and Burkina Faso for the cotton producers.
WTO Director-General Pascal Lamy will also attend.
The meeting runs Sept. 3-4, with officials meeting Sept. 2.
WHAT’S AT STAKE?
Putting value on a Doha deal is not easy. A study this month by Washington’s Peterson Institute for International Economics said a Doha agreement could boost the global economy by $300-700 billion a year, similar to major country stimulus package.
Other economists say the benefit would be far less and developing countries would see little of it.
Lamy has argued that apart from any boost to the economy, a new trade deal would lock in present levels of openness, preventing any descent into protectionism.
Poorer developing countries, bitterly disappointed when the talks collapsed in July last year, will not make concessions, but can expect help to improve their trading infrastructure and the removal of some of the grosser distortions that tilt trade in farm produce in favour of rich countries.