Explain the Purpose Behind the Wto’s Doha Round of Trade Negotiations Essay

Explain the purpose behind the WTO’s Doha round of trade negotiations.

Why has this round proved so difficult to conclude? What are the likely consequences for the world economy if the Doha round fails? The World Trade Organization has proven to be the top most successful joint trade institution of the 20th century. In spite of the lack of a central authority, the WTO has sustained trade assistance for the better half of the last five decades.Over which time the influence of the association has increased both in terms of developed and underdeveloped country membership, as well as achieving significant expansion and scope of its original mandate, but not without its problems. Yet despite numerous setbacks the WTO remains an important facilitator of world trade.

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What other World institution has the ability to settle international trade disputes (for panel and appellate bodies), within a suggested 16 months, (Hohmann, 2008).The WTO’s Uruguay Round proved to be an historical landmark in the expansion of the international trading structure, as it included development of both textiles and agriculture previously overlooked and left isolated by the GATT ( Hoekman and Mavroidis, 2007), as well as the addition of several new disciplines including, but not limited to intellectual property protection and trade in services. Towards the end of the 1990s global trading institutions remained optimistic that the WTO would broaden its policies to include both trade and investment.

Unfortunately these initial efforts were thwarted in Seattle in 1999.The Doha round, initially set out to be the primary key trade negotiation of the revised WTO (operational January 1st, 1995 as established by the GATT Uruguay Round) has to date has had to traverse an exceptionally complex set of issues. The Doha Rounds primary focus, commonly referred to as ?DDA’- or the Doha Development Agenda , in their Doha Declaration, according to Hohmann, aimed to address multiple trade issues (e. g. admission to industrial goods and services, agriculture, development of ?rules,’ with regard to trade facilitation, and competition policy) multiple development interests (e. . technological transfer and capacity building/ co-operation, and Lesser Developed Countries, differential and special treatment) several non-trade items (e.

g. social rights, and the growing concerns of environmental protection) to name but a few. The December 1999 launch of the round in Seattle failed as a result of the significant influence of altering membership and a revision of the decision building processes of the WTO, (as comparable with the eight trade rounds of the GATT), ( Van Den Bossche, 2008).The 4th WTO Ministerial Conference conducted in Doha, Qatar in November of 2001 made significant progress leaving global leaders and the WTO with a sense of optimism that the round would achieve a successful launch. However the 2003 September conference in Cancun Mexico once again halted progress resulting from, and in fundamental confrontations among groups of members, with regard to a range of complex economic and international policy differences.

One of the main outcomes of the Cancun talks according to (Anania, Bureau, Matthews & Swinbank, 2005); suggest developed countries would have to begin to take the concerns of lesser developed countries seriously in order for any future progress to be achieved. Indeed this was in sharp contrast to previous negotiations within the Uruguay Round. Where due to the restricted benefits, if any at all, with regard to the previous agreement on Agricultural affairs, and the generally harmful effects of the TRIPS consensus, LDC’s felt they had little to gain from, and even less influence over, the end product of the negotiations.

December 2005 saw the 6th Ministerial held in Hong Kong, resulting in some success. However an unfortunate recurring negative outcome by the summer of the following year inevitably resulted in the suspension of talks. The cause has been suggested to be the result of the breakdown in consensus between six influential WTO countries/members. Namely (the EU, the US, Australia, India, Japan, and Brazil) with regard to agreement on various modalities of talks concerning issues of key elements covered by agricultural and non-agricultural market access (NAMA).As of November 2007, the Doha round according to EU Trade Commissioner Mandelson (2007), suggests negotiations, especially in the agricultural sector may have shaped the framework of an agreement offering up to three times the value of the Uruguay Round. The package centred on the EUs proposal to reduce by 50% its farm tariffs, ensuring within a banded system that the uppermost tariffs would be reduced significantly. In addition the EU proposed a reduction of up to 70% of general trade altering farm support, and the abandonment of export subsidies, with the proviso that others follow similar policies.Interestingly these proposals were described as some of the most noteworthy changes to the “liberalization of farm trade,” policy in world trade history, (Polaski, 2007).

Mandelson goes on to suggest the EU calculated the proposed steps would pave the way for the creation of multiple thousands of tonnes of newly created market access, in products such as beef, poultry, and milk. As well as providing a trade platform for other exporters, not limited to developing countries, as the EU withdraws support from trade distorting practices. Which should result in some EU farms exiting global markets such as the ones mentioned above.Despite various advancements which include but are not limited to the perceived success of 2007, and February – April of 2008, the WTO Doha Round continued to experience a firewall of complex issues among its current 153 members of the WTO.

As a result of untoward pressure by developed economies, the Doha Round of talks appears to have altered course from an initial “developmental agenda,” to a more market access orientation in that emergent economies are under continual pressure to relax access restrictions in regards to their industrial, agricultural and service sectors (Khan, 2006).November 2009 saw the Doha Round of trade negotiations mark its 8th year since its inception in Seattle. Despite being the longest running trade negotiation since World War II, the end for the Doha even then was far from certain. WTO members despite years of tentative negotiations remained in deadlock with regard to any agreement on fundamental issues off the liberalization of agricultural and non-agricultural market access. The continuing split in agreement/s has by and large been the catalyst for the delay in other important consultations; such as services and environmental issues.It has been suggested that WTO members in this period managed to detail broad formulas for the reduction of tariffs and the revision of agricultural subsidies, but remained indifferent on the issues of how member countries should bind or relieve various items from the “formula cuts. ” While at this point talks on the issue of services had barely progressed from their original offers years before, there had been some improvement in areas such as a consensus on the issue of Trade Facilitation processes, and revised rules on the clearness of regional trading activities, (Hufbauer, et al, 2010).According to an International Monetary Fund Report in November 2011, compiled by the Strategy, Policy and Review department, talks since 2008 have been delayed primarily as a result of proposed tariff reduction programs aimed at targeting specific sectors of industrial goods.

Developed Market Countries or (AMs) insist that increased gains, as opposed to the inferred measured real market access to these sectors be unlocked. Unfortunately these have yet to be agreed by key developing or better known emerging market economies (Ems).Regardless of whether this issue is soon resolved, there remain various other contentious issues which are suggested to include a U. S. insistence that Ems formulate and issue an inflexible purpose built safeguard apparatus with regard to agriculture (SSM) , that would ensure a different means for developing countries to protect against import surges (Khor, 2008). In addition there is the issue of U. S. farm subsidies, industrial tariff proposals, cotton and others, in that none of the mainstream Ems has been ready to accept the EU/U.

S. viewpoint. The 2011 IMF report goes on to suggest that geo-political changes have been a major obstacle in achieving a workable Doha Round consensus among WTO members.

Not the least of which is the recent, as well as the current (2012) U. S. Presidential election campaign.

The IMF also refers to various particulars, including the changing of the economic status since 2001, of some of the larger developing economies, and their influence on World Trade. A good example of this is China and Brazil.In addition, and from the outset the Doha Round has been regarded as being somewhat ambitious, as the WTO membership is now larger than ever, 157 in total as of 2012. And secondly, negotiations now encompass nine arenas inside the- single undertaking. This suggests that any and all issues may be re-addressed until the point of an almost unanimous member consensus.

Due to the principle of the single undertaking, applicable to the Doha Round of talks, it has been suggested that nothing will be agreed upon until; everything is agreed upon (Osakwe, 2007).The WTO Annual Report of 2011 submits that further in-depth talks in Geneva in 2010 failed to reach consensus on a few but nonetheless fundamental issues. That despite a strong desire between members to conclude remains a vital obstacle to the conclusion of the Doha Round.

Regardless of nearly an entire decade of the Doha negotiations stalemate, developed countries it seems, may have forgotten the original reasoning behind Doha’s conception: i. e. to encourage a development agenda as a reaction to the tragedy of the 9/11 threat and to address a workable program in line with the UN Millennium Development Goals, (Cho, 2010).The question now is, can Doha recover from the ongoing deadlock, and more importantly what are the consequences with regard to the future of global trade and economic welfare, should the DDA despite best efforts fail? Hufbauer, et al, in their paper figuring out the Doha Round imply that there exists two main reasons why it would benefit global trade and economic welfare to reach an amicable solution to the deadlock.

That has thus far stalled and continues to hamper the achievement of an overall positive resolution to the Doha Round of talks.These include, 1) Failure to resolve ongoing disputes among and between developing and developed countries could be detrimental to the implementation of subsidy and tariff reforms, set in previously developed drafts, prolonging access to any gains previously agreed upon. Gains suggested to be significantly important on aggregate, but unfortunately not viewed in the same light by the U.

S. and other high ranking developed economies, and 2) to guarantee the practicality of suggested rules-based multiparty trading arrangements.If complex multiparty trading agreements such as the one on the table are postponed, developed and developing countries national leaders, under pressure from their domestic economic legislature may pursue other measures to address problems with regard to investment and trade. These may include bilateral and regional trade agreements, and protective policies against imports that obstruct international competition in their domestic markets. If such policies are pursued, the credibility of the WTO’s multilateral trading system could be irreparably damaged.Protectionist policies instigated by members of the WTO could also in the long run seriously undermine the organizations’ revered reputation to settle trade disputes. Failure of the Doha Round could be notably disastrous taking into consideration the vulnerability of the global recovery in regard to the ever persistent financial crisis.

Unemployment levels in the U. S. and parts of the EU remain at high levels, thus having the possibility of exerting pressure for protectionist measures.This fact has not gone un-noticed by leaders of the G-20, whom according to Cho have consistently stipulated at Washington, Pittsburgh, and London 2008/9 Summits a renewed pledge to bring closure to the Doha Round in 2010, as a means to achieving growth in the global economy. It would be difficult to assign a completely accurate quantitative value to the degree of global economic loss that would befall both developed and developing economies alike, resulting from the possible outright collapse of the Doha Development Agenda.Initial estimates suggest a successful outcome of Doha could see global GDP grow to somewhere around $355 billion larger in 2015, than pre 2004 figures (Appleyard and Field, 2006). An estimate printed in the Economic Report of the President , February, 2004, issued by the Government Printing Office in Washington, DC, indicated U. S.

GDP could very well increase by up to $144 billion per annum. Various studies prior to 2009 have attempted to assess the probable effect/s of the implementation of a successful Doha Round. And estimate that a slight increase in global trade and a positive effect on the levels of future Global GDP are possible.A recent study conducted by Bouet and Debucquet (2009) in an IFPRI Discussion Paper 00886, although limited to tariffs and issues of domestic support suggest the non-implementation of the Doha agreement would be a clear indication of global nonconformity. This in turn may have the undesired effect of instigating trade disagreements that could lead to unwanted legal action (primarily between developed and emerging developing economies). In addition it would mark the first failure with regard to the WTO’s attempt to advance the issue of development.

The study seems to concur that in the present global economic climate the failure of the negotiations could lead to high risk of members resorting to the implementation of protectionist actions. In which case the quantitative loss could be far in excess of the studies projected U. S. $59 billion, as well as a considerable opportunity cost. Bouet and Debucquet conclude if it is the case that key member countries fail to achieve a consensus and persist in the implementation of protectionist policies the prospective loss could total and even exceed US$1,171 billion in lost global trade.The April 2011 unveiling of the document now commonly referred to as the ?Easter package’ essentially represents a culmination of the results of the work since the Doha’s inception back in 2001.

The 2012 WTO report states that members have for the first time been afforded the opportunity to assess the complete Doha outline, including proposed text where there was previously none. Despite essential advances in multiple areas it unfortunately highlights areas that have, and continue to divide various members.According to the report these include continual disagreement over non-agricultural market access (NAMA), with specific reference to industrial based products. The TNC Chair has related to the members that there exist fundamentally opposing opinions in three key areas: reductions to the industrial tariffs in line with the Swiss formula for reducing and achieving congruent duties; disagreement between members as to whether inputs among members are balanced and proportionate; as well as the input of ?sectorals. The Chair goes on to report that there exists a political gap confronting members, a gap that members feel is not surmountable at this point. With regard to the future conclusion of the Doha negotiations several no go options have been acknowledged; the most important of which includes a consensus among members in which all involved admit that ignoring the problems will not pave the way to finding a solution to any of them.

Nonetheless subsequent efforts strive to facilitate the advancement of the negotiations as World trade leaders remain optimistic the Doha round will play a significant role in not only economic global welfare, but may go a long way to reaching and sustaining initial development goals and aiding in the alleviation of global poverty. It could be seriously suggested that this was the initial aim of the Doha round of talks in the first place.


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