When trade ministers of the WTO member countries decided at their ministerial conference in Geneva in December of last year that WTO Director-General Pascal Lamy should hold a “stocktaking” of the Doha Round of trade policy negotiations in March, the hope was that enough progress would occur in the interim to push the talks to conclusion. Last summer the leaders of the G20 countries had called on trade ministers to reach a Doha agreement by the end of 2010.

The results of the five days of stocktaking of the negotiations was best summarized by Director-General Lamy in his closing statement on March 26, “My starting point will be that although we have made some progress since 2008, there is no denying the fact that we are not where we wanted to be by now.” By the end of the meeting the 2010 goal had been unofficially declared unattainable based on the stocktaking exercise.

None of this comes as a surprise. The talks which began in November 2001 have been politically deadlocked since the summer of 2004 when a framework for an agreement was approved. Working out the technical details of an agreement has made progress, but major political breakthroughs have been totally lacking. The fact that the agricultural talks are still hung up over whether some tariffs will be allowed to be higher than 100 percent for non-sensitive products, sensitive products possibly being more than 4 percent of agricultural tariffs lines and developed country domestic farm subsidies are indications that little progress had occurred.

The official word from Director-General Lamy was, “We are not yet at the end, but we are pressing on with determination, in the assurance that the prize is worth the effort.” The more important issue is how to salvage the best of the progress from the talks given that the political will is not there to achieve an agreement this year or next year. The worst possible outcome would be to have the talks continue to drag on until the last optimist agrees all hope of progress is lost.

The failure of the talks to progress has to be separated from the overall value of the WTO, the need to update the rules as established in 1995, and the benefits of freer trade. The rules set by the WTO clearly helped to stave off a slide to protectionism that some politicians wanted to pursue in the economic recession and still desire as the recovery begins. The understanding of most WTO members was that a round of negotiations would begin within a few years of 1995 and certainly before 2001. The agricultural agreement was an interim one that was expected to be changed.

While the WTO structure of rules is good, the WTO cannot survive just by policing the rules that are already in place. Disagreements on trade are better resolved through negotiations that allow for some give and take rather than dispute panel rulings that result in an attitude of one side won and the other lost. Six years of stalemate on negotiations have allowed unresolved issues to become harder to deal with rather than bringing closure to issues.

Some parties have suggested that the current round be officially ended and a new one begun because so much has changed in trade in the last eight years. Much has changed, but there is no reason to believe that restarting talks with the same approach to negotiations would result in a different outcome. Countries without an interest in make substantive changes in certain areas of trade will likely be even less interested in the next round. Suspending the current talks for six months or so also would likely not result in a better outcome.

Concerns have been raised that there was too much bilateral negotiations between the U.S. and Brazil, India and the EU. That certainly has a ring of truth in an organization with 153 members, but the U.S. and EU are the two biggest economies and Brazil and India were at least partially representing the broad interests of developing countries. With all issues on the table, at least in theory, and many voices to be heard, negotiations would be unmanageable without some smaller group discussions.

Salvaging progress where it has been made is a worthwhile effort, but economists at the Peterson Institute for International Economics in Washington, DC have concluded that the collective progress to date is not large enough for major trading countries like the U.S. to see a real difference in trade outcomes. The EU’s pledge to end export subsidies for agricultural products by 2013 would be valuable to retain, as would opening developed countries markets to the 50 countries lowest in economic development. Working out these issues may be doable and would fulfill a small part of the development agenda in the Doha Round.

The Doha talks have faltered because politicians in major developed and developing countries, including the U.S., have not been willing to risk political capital to make an offer for a substantial change in policy to achieve a Doha agreement because they did not see economic and political paybacks. They have benefited from the risks that other leaders have taken since 1947 when trade impediments were much larger and economically costly. The failure to clearly identify political benefits may doom future comprehensive agreements because WTO agreements are first and foremost political agreements.

The biggest challenge is how to envision future WTO trade negotiations that are fundamental to keeping the WTO as a vital organization. If the talks are not a “single undertaking” of all countries with many topics for discussion, how do smaller groups of countries or narrow sets of issues get organized under WTO rules? Trade disputes will not go away and the WTO has a role to play, but how would that occur?

In the slow time between meetings, perhaps negotiators can think about the post-Doha area and begin planting seeds for process reform that can be harvested under future WTO negotiations. Director-General Lamy was correct when he encouraged negotiators to focus more on substance than process in the current talks, but with no progress under the current process, it is time to think about a new one.