Next Steps: Getting Past the Doha Round Crisis
Transcript of Next Steps: Getting Past the Doha Round Crisis
A VoxEUorg eBook
Next Steps Getting Past the Doha Round Crisis
Edited by Richard Baldwin and Simon Evenett
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Centre for Economic Policy Research (CEPR)
Centre for Economic Policy Research3rd Floor77 Bastwick StreetLondonEC1V 3PZUK
Tel +44 (0) 20 7183 8801Fax +44 (0)20 7183 8820Email ceprceprorgWeb wwwceprorg
copy Centre for Economic Policy Research 2011
ISBN (eBook) 978-1-907142-37-6
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Edited by Richard Baldwin and Simon Evenett
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research is a network of over 700 Research Fellows and Affiliates based primarily in European Universities The Centre coordinates the re-search activities of its Fellows and Affiliates and communicates the results to the public and private sectors CEPR is an entrepreneur developing research initiatives with the producers consumers and sponsors of research Established in 1983 CEPR is a Euro-pean economics research organization with uniquely wide-ranging scope and activities
The Centre is pluralist and non-partisan bringing economic research to bear on the analysis of medium- and long-run policy questions CEPR research may include views on policy but the Executive Committee of the Centre does not give prior review to its publications and the Centre takes no institutional policy positions The opinions ex-pressed in this report are those of the authors and not those of the Centre for Economic Policy Research
CEPR is a registered charity (No 287287) and a company limited by guarantee and registered in England (No 1727026)
Chair of the Board Guillermo de la DehesaPresident Richard PortesChief Executive Officer S tephen YeoResearch Director Mathias DewatripontPolicy Director Richard Baldwin
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Centre for Economic Policy Research (CEPR)
Centre for Economic Policy Research3rd Floor77 Bastwick StreetLondonEC1V 3PZUK
Tel +44 (0) 20 7183 8801Fax +44 (0)20 7183 8820Email ceprceprorgWeb wwwceprorg
copy Centre for Economic Policy Research 2011
ISBN (eBook) 978-1-907142-37-6
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Edited by Richard Baldwin and Simon Evenett
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research is a network of over 700 Research Fellows and Affiliates based primarily in European Universities The Centre coordinates the re-search activities of its Fellows and Affiliates and communicates the results to the public and private sectors CEPR is an entrepreneur developing research initiatives with the producers consumers and sponsors of research Established in 1983 CEPR is a Euro-pean economics research organization with uniquely wide-ranging scope and activities
The Centre is pluralist and non-partisan bringing economic research to bear on the analysis of medium- and long-run policy questions CEPR research may include views on policy but the Executive Committee of the Centre does not give prior review to its publications and the Centre takes no institutional policy positions The opinions ex-pressed in this report are those of the authors and not those of the Centre for Economic Policy Research
CEPR is a registered charity (No 287287) and a company limited by guarantee and registered in England (No 1727026)
Chair of the Board Guillermo de la DehesaPresident Richard PortesChief Executive Officer S tephen YeoResearch Director Mathias DewatripontPolicy Director Richard Baldwin
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Centre for Economic Policy Research (CEPR)
Centre for Economic Policy Research3rd Floor77 Bastwick StreetLondonEC1V 3PZUK
Tel +44 (0) 20 7183 8801Fax +44 (0)20 7183 8820Email ceprceprorgWeb wwwceprorg
copy Centre for Economic Policy Research 2011
ISBN (eBook) 978-1-907142-37-6
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Edited by Richard Baldwin and Simon Evenett
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research is a network of over 700 Research Fellows and Affiliates based primarily in European Universities The Centre coordinates the re-search activities of its Fellows and Affiliates and communicates the results to the public and private sectors CEPR is an entrepreneur developing research initiatives with the producers consumers and sponsors of research Established in 1983 CEPR is a Euro-pean economics research organization with uniquely wide-ranging scope and activities
The Centre is pluralist and non-partisan bringing economic research to bear on the analysis of medium- and long-run policy questions CEPR research may include views on policy but the Executive Committee of the Centre does not give prior review to its publications and the Centre takes no institutional policy positions The opinions ex-pressed in this report are those of the authors and not those of the Centre for Economic Policy Research
CEPR is a registered charity (No 287287) and a company limited by guarantee and registered in England (No 1727026)
Chair of the Board Guillermo de la DehesaPresident Richard PortesChief Executive Officer S tephen YeoResearch Director Mathias DewatripontPolicy Director Richard Baldwin
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
A VoxEUorg eBook
Edited by Richard Baldwin and Simon Evenett
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research is a network of over 700 Research Fellows and Affiliates based primarily in European Universities The Centre coordinates the re-search activities of its Fellows and Affiliates and communicates the results to the public and private sectors CEPR is an entrepreneur developing research initiatives with the producers consumers and sponsors of research Established in 1983 CEPR is a Euro-pean economics research organization with uniquely wide-ranging scope and activities
The Centre is pluralist and non-partisan bringing economic research to bear on the analysis of medium- and long-run policy questions CEPR research may include views on policy but the Executive Committee of the Centre does not give prior review to its publications and the Centre takes no institutional policy positions The opinions ex-pressed in this report are those of the authors and not those of the Centre for Economic Policy Research
CEPR is a registered charity (No 287287) and a company limited by guarantee and registered in England (No 1727026)
Chair of the Board Guillermo de la DehesaPresident Richard PortesChief Executive Officer S tephen YeoResearch Director Mathias DewatripontPolicy Director Richard Baldwin
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research is a network of over 700 Research Fellows and Affiliates based primarily in European Universities The Centre coordinates the re-search activities of its Fellows and Affiliates and communicates the results to the public and private sectors CEPR is an entrepreneur developing research initiatives with the producers consumers and sponsors of research Established in 1983 CEPR is a Euro-pean economics research organization with uniquely wide-ranging scope and activities
The Centre is pluralist and non-partisan bringing economic research to bear on the analysis of medium- and long-run policy questions CEPR research may include views on policy but the Executive Committee of the Centre does not give prior review to its publications and the Centre takes no institutional policy positions The opinions ex-pressed in this report are those of the authors and not those of the Centre for Economic Policy Research
CEPR is a registered charity (No 287287) and a company limited by guarantee and registered in England (No 1727026)
Chair of the Board Guillermo de la DehesaPresident Richard PortesChief Executive Officer S tephen YeoResearch Director Mathias DewatripontPolicy Director Richard Baldwin
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Contents
Foreword vii
The Doha dilemma An introduction to the issues 9 and possible solutions Richard Baldwin and Simon Evenett
There is no Plan B ndash only Plan A Towards completing 19 Doha Mari Pangestu
Acknowledge Doharsquos demise and move on to save 27 the WTO Susan Schwab
Next Steps Getting past the Doha Round crisis 33Ujal Singh Bhatia
Next Steps Is an early harvest still possible 41Zhenyu Sun
Getting past the Doha Round crisis Moving forward 47 in the WTO John Weekes
The good ship Doha Salvage-and-abandon-ship or 51 repair-and-wait Stuart Harbinson
Keeping the WTO on track A Doha down payment 61 plus more Richard Baldwin and Simon Evenett
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
vii
Doha is deadlocked ndash the members of the WTO are unable to give up and unable to go
forward
In this eBook the contributors propose several deacutemarche that consider various
combinations of 4 initiatives that offer a way out of the current impasse
bull Deliver a down payment
bull Ditch the current process of negotiating in ldquosilosrdquo ndash it doesnrsquot work
bull Develop a new and forward-looking agenda for the WTO
bull Demonstrate some leadership
The down payment is straightforward All the contributors suggest a number of area
where agreement is already close and which could be wrapped up in time for the
December Ministerial After a decade of negotiations it hardly seems right to call this
ldquoan early harvestrdquo but a set of measures that focus on the needs of the least developed
nations seems right for a ldquoDevelopment Roundrdquo
The current approach to negotiations is clearly not working and offers no way forward
Why not try new approaches A number of contributors suggest abandoning the current
ldquosilo approachrdquo The December Ministerial they argue should adopt a new approach
abandoning modalities and emphasising horizontal negotiations One contributor ex-
USTR Susan Schwab suggests abandoning the Round altogether and starting from
scratch
While much of the energy in the Doha negotiations has been expended on traditional
issues such as agriculture and market access for goods and services there is a long list
of new issues that will only grow in importance over time Several contributors advocate
a programme of analysis and discussion that will help members better understand issues
such as competition policy climate change and government procurement
Foreword
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
viii
The current Doha deadlock is largely due to the absence of leadership from the major
players Expecting leadership now from any of the Big 5 is unrealistic Baldwin and
Evenett drawing on their discussions with a wide-range of WTO delegations suggest
that one demarche that could help unblock the impasse is a bold move by the middle-
power WTO members They could seize the initiative by adopting a set of unilateral
measures to offer to liberalise trade The new commercial opportunities this would
provide would remind exporters what they have to gain from the conclusion of the
Round
Richard Baldwin and Simon Evenett have acted with their usual speed and efficiency
assembling at short notice a distinguished group of authors whose essays identify
solutions to Doha Deadlock And as always they have been very ably supported by
Team Vox in particular by Bob Denham Samantha Reid Anil Shamdasani and Pierre-
Louis Veacutezina We are grateful to them all
Stephen YeoChief Executive OfficerMay 2011
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
9
World leaders must make important decisions concerning the future of the Doha Round
for the 31 May 2011 meeting of the WTO membership This essay introduces the issues
and summarises contributorsrsquo suggestions for ldquoNext Stepsrdquo It argues that the best
outcome would be for WTO members to agree to work towards a small package of
deliverables for December 2011 and push the rest of the agenda items into the future
ndash perhaps with specific instructions for changing the basic negotiating protocols used
to date
Global leaders face a dilemma over the WTO multilateral trade negotiations known
as the Doha Round The talks are dead in the water both movement forwards and
movement backwards seem blocked How did we get here Current and former trade
policy officials typically emphasise two points
bull Ten years of talks have made some progress but it now must be taken as a hard fact
that the Doha Round in its entirety will not finish this year
bull No government is willing to announce publicly that they want to abandon the Round
The sources of unwillingness vary Some argue that abandoning the Round would throw
away genuine progress such as the ultimate phase-out of agricultural export subsidies
Others wish to maintain attention focused on particular problems in the trade system
Yet others simply fear that theyrsquoll be blamed for delivering the bad news
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
The Doha dilemma An introduction to the issues and possible solutions
99
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
10
Next Steps Saving the WTO from the Doha Round
World leaders must now decide how to tackle this dilemma at the WTOrsquos next key
meeting on 31 May 2011 Logically there are only 3 roads ahead
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock
in some of the progress to date
This eBook on ldquoNext Steps Getting Past the Doha Round Crisisrdquo gathers the thinking
of a handful of the worldrsquos most experienced Doha experts namely former US Trade
Representative Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia
Chinarsquos former WTO Ambassador Zenyu Sun Canadarsquos former WTO Ambassador
John Weekes and Hong Kongrsquos former WTO Ambassador Stuart Harbinson ndash all of
whom spent years directly engaged in Doha negotiations
Road 1 The pitfalls of declaring failure
Susan Schwab argues strongly that declaring Doharsquos demise is essential to allowing
the WTO to move on John Weekes likewise argues ldquoIt would be damaging to invest
more resources and credibility in something that canrsquot be donerdquo Ujal Singh Bhatia by
contrast argues that Road 1 could lead to unpredictable results Zenyu Sun notes that
declaring the Doha Round to be dead would be easy but then what ldquoWould such an
announcement inspire people to inject more energy into the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt itrdquo he writes
These judgements on the medium- to long-term ramifications differ but the short-
term fallout is clear Declaring the Round ldquodeadrdquo would invite an immediate storm of
recrimination among WTO members A great deal of hope and effort has been invested
in the Round by nations across the globe Most WTO members are still looking for the
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
11
Doha Round to effect critical adjustments to the world trading system ndash especially a
rebalancing of the level of openness to agricultural versus industrial trade (Nassar and
Perez 2011) If one or more of the Big-5 reject a deal that most members still think is
doable the blame game could get very nasty
There is a great danger that this level of ill-will could undermine multilateral trade
cooperation for years It could lock in the growing perception that the WTO is not a
place where serious negotiations can be conducted The US in particular is likely to
be subject to severe criticism in a way that might have the unintended consequence of
convincing US Congressional and private sector groups that the WTO is not a forum
where America can do business Such an outcome would serve no onersquos interests
Despite the clear logic of Schwabrsquos and Weekesrsquo arguments the pitfalls highlighted
by Bhatia and Sun find resonance with most world leaders This is why almost every
WTO member opposes Road 1 As a consequence it is extremely unlikely that WTO
members will decide to declare Doha dead any time soon
Road 2 The pitfalls of suspension
Suspension is certainly the most politically expedient choice for the Big-5 and it
is superficially attractive The logic is well expressed in the old story about a man
ndash condemned to death by his Emperor ndash who obtains a yearrsquos stay of execution by
promising to teach the Emperorrsquos horse to sing ldquoMuch could happen in a yearrdquo the man
reasons ldquoThe Emperor could die I could die the horse could singrdquo
But the usual merits of muddling through donrsquot apply to Doha Suspensions have been
tried so often that everyone would know that suspension is just a circuitous means of
killing the Round Road 2 is just the long route to Road 1 All the pitfalls of Road 1
therefore also apply to Road 2
But suspension would be even worse in many ways The world of trade is changing more
rapidly than negotiating positions so each delay seems to make a compromise based on
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
12
the existing elements even less likely Worse still a suspension would strengthen and
spread the belief that the WTO is not an appropriate venue for multilateral negotiations
As Ujal Singh Bhatia writes ldquothe Round will continue to hang like an albatross around
the WTOrsquos neck preventing it from addressing new challenges to the global trading
systemrdquo This would be particular worrisome since the world economy is moving into a
phase of great stress It is facing new challenges that will require multilateral solutions
ndash issues like food security natural-resource export restrictions and trade in goods
services and technology that are essential to climate-change adaption and mitigation
Road 3 A small package followed by a big package
The third road seems the most likely way to move past the Doha dilemma of not being
able to move forwards or backwards on the broad agenda The idea here is that the
agenda would be sorted into ldquodo-ablerdquo and ldquonot yet do-ablerdquo piles Nations would move
forward on a small package of do-ables for December 2011 while agreeing to discuss
the bigger issues later under revised ground rules that would be more likely to permit
the trade-offs necessary to make the big package acceptable to all members
As Stuart Harbinson puts it Doha is like a ship run aground a small package of
deliverables for December 2011 would act as a ldquopatchrdquo to keep the ldquogood ship Dohardquo
afloat until the high tide comes in and lifts the ship off the rocks ldquoIn this analogy the
lsquohigh tidersquo would be a change in the global economic and political seascape enabling
the major trading economies to settle their differences and bring the ship safely into
harbourrdquo he writes
Choices to make on the small package
All five experienced trade negotiators contributing to this eBook ndash and most of the WTO
delegations with whom we spoke ndash believe that it is worth trying to lock in agreement
on a small number of areas by the end of 2011 There are two critical issues to decide
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
13
1 How much time should be spent on negotiating the small package
2 Which items should be in the small package
The contributors disagree over the first issue Susan Schwab argues for giving it not
more than 2 weeks others suggest longer They all however recognise that a prolonged
and contentious negotiation on a small package ndash especially one that ultimately proved
fruitless ndash would solve nothing and might harm the system
There is far more agreement on the second issue ndash possible composition of the small
package All the contributors and most of the WTO delegations with whom we spoke
suggest that some items on Doharsquos massive negotiating agenda are close to conclusion
Indeed the lists are remarkably similar despite the vast differences in the contributorsrsquo
perspectives They all point out however that striking even a very restrained list of
agreement will require abundant goodwill and hard negotiating
Suggestions for the small-package items include
bull Some sort of accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
bull A package of measures that promote ldquotrade facilitationrdquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impediments to trade
bull An agreement on a monitoring mechanism for special and differential treatment
bull An agreement to make permanent the transparency mechanism for regional trade
agreements that has been operating successfully for years
bull An agreement on certain non-tariff barriers
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
14
bull An agreement formalising cooperation between the WTO and various multilateral
environmental agreements
Other issues may ultimately prove tractable or necessary to provide balance Those most
often mentioned include a standstill agreement on fisheries subsidies certain aspects
of the less controversial rules negotiations and export subsidies Such a package could
also include other DDA matters for which the negotiations could be completed quickly
or non-DDA matters where the WTO membership is at one such as the promising
negotiations to upgrade the WTOrsquos Agreement on Government Procurement
The final issue is what to call the small package this is not a trivial matter
bull One option is to just boldly call the small package the ldquoDoha Roundrdquo ndash to declare
victory and move on
While this would clearly disappoint many it speaks to the objective of not letting the
Round drag down the WTO ndash not allowing the WTOrsquos credibility to be further damaged
by endless discussions that can never led to a happy ending
Of course this option would leave unsolved the core Doha issues ndash reducing distortions
in and improving market access for industrial goods agricultural products and services
trade and updating the rules But it might allow members to re-craft the parameters of
the negotiations in a way that would be more likely to lead to success This is clearly
the view taken by Susan Schwab and John Weekes As John Weekes puts it ldquoNot
completing the Doha Round would be a serious setback to the WTO and the multilateral
trading system However if it is clear that the Round cannot be concluded successfully
it is better to admit that and work constructively to develop an agenda for the future
work of the organisationrdquo
Another option would be to wrap up the collection of small agreements into a package
called the ldquoDoha down paymentrdquo or ldquoDoha deliverablesrdquo or ldquoDoha early harvestrdquo as a
way of stressing that all the Doha agenda items are still on the table
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
15
A third option would be to view the individual items as standalone agreements to be
agreed by the ministers of WTO members at the December meeting without clear
reference to what comes next
This brings us to the next major element of the Road 3 pathway What to do with the
rest of the agenda
Choices to make on the big package
Albert Einstein once defined insanity as doing the same thing over and over and
expecting different results This makes it clear that any complete plan for a way past the
Doha dilemma must change something in the way the negotiations have been operating
Any multilateral trade negotiation involves choice on a series of negotiating rules
or conventions The Doha Round has accreted an odd constellation of these Some
are fundamental and therefore extremely difficult to change These include the idea
that everything must be agreed by all before anything is agreed (the so-called single-
undertaking principle) or the choice to focus on the particular tariff-cutting formula
known as the Swiss formulas But many of the choices are less central such as the exact
way in which flexibilities on tariff-cutting are to be decided
The ramifications of these procedures on the negotiating dynamic were not well
understood years ago when the original decisions were taken The lack of understanding
is even deeper when it comes to the joint operation and interaction among the
conventions
For these reasons the set of negotiating conventions that guide Round may no longer be
optimal Consideration of the pros and cons of alternatives might identify other ways of
finding a package of trade-offs that is acceptable to all
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
16
The forward-looking agenda
A number of contributors suggested that the process of rebuilding momentum and
confidence in the ultimate outcome could be boosted by agreeing to launch work
programmes (not actual negotiations) on how the WTO could address 21st-century
trade issues that have come to the fore since the Doha agenda was set in 2001
Here there are two basic lines The first would consider WTO institutional reform the
second would consider new issues such as new disciplines to underpin the increasing
convergence of trade investment and services (as is now routinely done in regional
trade agreements) setting limits on acceptable national climate policies with trade
implications or export restrictions
There certainly seems merit to these idea If nothing else it would interject new
dimensions to discussions that have been going on for a decade It would also make
it clear that we need to safeguard the WTO as a forum for multilateral discussions on
critical 21st-century issues
Concluding remarks
Many decent hard-working public servants have committed plenty of energy to the
Doha Round since its inception At this critical time any temptation for recriminations
or lapses into bitter disappointment should be set to one side to let governments chart a
new path for the WTO The circumstances facing WTO members in the middle of 2011
are hardly ideal and the set of options that stand any chance of acceptance is narrow In
times like these it would be a mistake to make the perfect the enemy of the good It is
time to think creatively and cooperatively about getting the WTO past the Doha crisis
A decision or non-decision that led to several more years of drift ndash years that will be
complicated by elections and changes in governments in some of the leading trading
powers ndash could turn out to be the beginning of the end for the WTOrsquos role as leader
of the global trading system The alternative ndash uncoordinated developments led by the
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
17
Big-5 in their own systems of regional trade agreements ndash is a very plausible outcome
at this stage but not one that will ultimately serve anyonersquos long-run interests
References
Andre Nassar and Carlos Perez (2011) ldquoWhy WTO members should not give up the
Doha Round The case of agricultural traderdquo in Richard Baldwin and Simon Evenett
(eds) Why World Leaders Must Resist the False Promise of a Doha Delay VoxEU
April
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
19
Doha is stalled by gaps that are unbridgeable today Indonesiarsquos Trade Minister argues
that we need to be guided by priorities and pragmatism We should develop a set of
stepping stones that will help us complete the Doha Round eventually We should
identify the areas that are achievable in the very near future but which have an impact
on development while building confidence for the continued journey to a successful
Round We should never lose sight of the final goal ndash completing the Doha Round as a
single undertaking In short we are not looking for a ldquoPlan Brdquo we are looking for a
new way to execute Plan A
The importance of completing the Doha Development Agenda sooner rather than later
goes beyond bringing gains of $360 billion of additional trade with substantial benefits
for industrialised and developing economies (HLTE 2011) The importance also goes
beyond what pragmatic soothsayers who are telling us ldquoWhy are you worried the
WTO system will continue to be robust whether we conclude Doha or not Companies
and countries will continue to traderdquo As a developing country policy maker ndash and I
believe I speak for many other developing countries ndash I am greatly worried about the
costs and opportunity lost of not completing Doha
The costs of not completing Doha
I will point to four costs of not completing the Doha Round
bull First is what it could achieve for food security
Mari PangestuMinister of Trade Indonesia
There is no Plan B ndash only Plan A Towards completing Doha
1919
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
20
During the 2008 food crisis imbalances between supply and demand were partly
attributed to distorted agriculture prices caused by trade-distorting export subsidies
and domestic-support schemes The agriculture package in Doha will go some way to
address this In todayrsquos situation of high commodity prices now is the perfect time to
address the removal and elimination of such trade-distorting policies Removing these
distortions can only be achieved through multilateral negotiations not through bilateral
or regional agreements
Most importantly the winners would be the billions of hungry and poor people all over
the world correcting the system and ensuring the future supply of food and greater
price stability is very much in their interests For example in Indonesia a 10 increase
in the price of rice without any change in income would lead to a 1 increase in
poverty
bull Second keeping protection at bay
During the depth of the crisis benign protectionism was the order of the day according
to the self-reporting surveillance mechanism established by the WTO at the request of
G20 Leaders This allowed the rebound of trade to become one of the costless ways for
the global economy to recover It is ironical that in the recovery the latest report (WTO
2011) shows that there has been a slight increase in protectionism causing an estimated
impact of 06 to G20 exports
The main increase has been due to tariff increases automatic licenses and other
restrictions including export restrictions Whilst this is still ldquosmallrdquo it is nevertheless
double from the previous period Restoration of the confidence in the world trading
system through clear signals that we are progressing on completing the Round is crucial
to keeping protectionism at bay Developing countries such as Indonesia have a great
interest in this because only the multilateral trading system will provide the fair rules-
based trading system for us to face large and more developed partners on a fair and
equal standing
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
21
bull Third the lack of progress on the Doha Round already has and will continue to raise
the pressure to undertake bilateral and regional free trade negotiations
In the ASEAN region there are already FTAs between ASEAN and all six of its dialog
partners (Australia China India Japan Korea New Zealand) and numerous bilateral
FTAs The EU has just completed negotiations with Korea which has put pressure
for the Korea-US FTA to be ratified as soon as possible The EU has also completed
negotiations with India and is negotiating with Singapore Malaysia and preparing
to do so with other ASEAN countries Recently China Korea and Japan announced
revitalization of their FTA initiative Furthermore we have the Trans-Pacific Partnership
initiative between 8 members of APEC
It is not the bilateral and regional free trade agreements which are problematic per
se it is negotiating them in the absence of a robust WTO system ndash a system which is
seen as meeting the needs of the current and future trade-linked issues Bilateral and
regional agreements can only work towards complementing the multilateral trading
system when they are ldquoWTO-plusrdquo not ldquoWTO-insteadrdquo
bull Fourth the potential dampening effect on unilateral reforms
The political economy of openness in trade policy and institutional reform have always
functioned better within the framework of international commitments Multilateral
rules impose an important caveat on what countries can or cannot do In a country like
Indonesia this has worked to our advantage in the way we frame our reforms and in fact
has functioned in the past to put bad policies to rest
For instance in the famous National Car case in the mid 1980s which violated the
MFN principle by allowing duty-free imports of cars only from one source country the
domestic politics at the time did not allow for policymakers to remove this policy The
policy was finally ended through the WTOrsquos dispute settlement mechanism It would
be too bad for reforms if the process is undertaken within weakened confidence of
multilateral trading system or one which will eventually not be relevant to the evolution
of 21st century trade issues
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
22
The Way Forward No Plan B
Despite G20 Leadersrsquo commitments and all the good intentions and intensive work in
Geneva that came after the push given by trade ministers during their informal meeting
in Davos in January 2011 it proved impossible to arrive at a draft text by the end-of-
April milestone There remains ldquounbridgeable gapsrdquo in a number of main negotiating
groups namely non-agriculture market access
Given this situation trade ministers met first during the APEC Ministers of Trade
Meeting in Big Sky Montana and then on the fringes of the OECD meeting in Paris
Fortunately all have agreed that we all remain committed to completing Doha as a single
undertaking However there was a sense of realism as to the timing and pathways to
achieve this desirable outcome in a timely way
From an Indonesian perspective there is no ldquoPlan Brdquo We do not support a ldquoDoha
Lightrdquo and we remain committed to a comprehensive ambitious and balanced package
building on what we have achieved to date
After almost 6 years of negotiations since the key Hong Kong WTO Ministerial I
believe we are more than 50 or some would say 80 of the way done A realistic way
forward is to identify the sequence of steps that would take us to the final outcome this
is necessary to avoid the costs and lost-opportunities I outlined above
This is not about an early harvest or ldquocherry pickingrdquo and then stopping It is about
identifying the steps forward in a meaningful way towards the final goal of the single
undertaking of Doha
Identifying stepping stones to a final Doha Round conclusion
There are areas within the negotiations that could be seen as steps towards the final
package Of course work and political will is still needed to find ways to bridge the
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
23
unbridgeable gaps In identifying the areas where we could find convergence a number
of priorities stand out
bull First and foremost is areas of negotiations that will contribute and deliver to devel-
opment objectives such as the Least Developed Countries package andor an effec-
tive aid-for-trade and facilitation package this is after all a Development Round
bull Second areas where there would be clear benefits for development and the private
sector in facilitating and ensuring the benefits of trade are greater we need stake-
holders to be cheerleading the way forward
bull Third there could be areas where we would be able to address the food-security
challenge
One could also foresee that within each current area of negotiations there could be
items which could be wrapped up without disturbing the overall balance of elements
in that particular area It is important that we do not go into ldquonewrdquo negotiations in
identifying which areas We should go into the mode of identifying these pathways and
steps with the mindset and political will of win-win
We need to be guided by priorities and pragmatism That is to identify the areas that are
doable and achievable in the very near future but which have an impact on development
and increasing the benefits of trade while at the same time building confidence for us to
continue our journey to the final package Most importantly we should never lose sight
of the final goal of the single undertaking
Looking forward
It is also important to provide the signal in what we say and do elsewhere Beyond
talking about Doha we must ensure continued confidence in and implementation of the
rules-based open trading system
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
24
bull This would mean the commitments of G20 Leaders and others on refraining from
protectionism going beyond words the good intentions need to be strengthened
with commitments and actions
bull It also has implications for how we undertake bilateral and regional agreements
these should be done in a way that is not an alternative to and does not detract from
the multilateral trading system We should pursue regionalism in a way which is
going to contribute to and complement the system
Concluding remarks
In conclusion we should not underestimate the costs of not doing all this We will
need to draw upon the strength of our individual and collective political commitment
We need to call on the ability of some major economies to look beyond pure national
interests and to look at the impact and costs on the global system and economy And we
need to remember that there are many countries and billions of people ndash many of which
are impoverished ndash who are waiting for the Doha deliverables
References
HLTE (2011) ldquoWorld trade and the Doha roundrdquo final report of the High-Level Trade
Experts Group chaired by Jagdish Bhagwati and Peter Sutherland
WTO (2011) ldquoReports on G20 trade and investment measures (mid-October 2010 to
April 2011)rdquo WTO Secretariat 24 May
About the author
Mari Pangestu is Indonesiarsquos Minister of Trade since 2004 having served as Executive
Director of the Jakarta-based think tank the Center for Strategic and International
Studies and a lecturer in the Faculty of Economics at the University of Indonesia From
1991 to 1998 Dr Pangestu was the coordinator of the Trade Policy Forum of the Pacific
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
25
Economic Cooperation Council and serves on the Board of the Overseas Development
Council World Gold Council and the Asian Journal of Business from The University
of Michigan Ann Arbor
She has published widely on a range of subjects including matters pertaining to
Indonesia as well as regional (ie Asian and Asia Pacific) and global issues She earned
her BA and MA in economics from Australian National University and a PhD in
economics from the University of California Davis
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
27
The Doha Round has failed according the former US Trade Representative Susan
Schwab This essay argues that prolonging Doha jeopardises the multilateral trading
system and threatens future prospects for WTO-led liberalisation Negotiators should
salvage whatever partial agreements they can from Doha and quickly drop the rest
to ensure the December ministerial meeting focuses on future work plans rather than
recriminations over Doha
The Doha Round has failed It is time for the international community to acknowledge
this sad fact and move on Prolonging the pretence that the Doha Round will succeed
is now a greater threat to the WTO and the multilateral trading system than facing the
truth
A great many smart hard-working and well-intentioned individuals have worked over
many years to realise Doharsquos potential to contribute to global economic growth and
development But what is on the table in Geneva has failed to deliver any outcome
let alone a meaningful one It is time for a swift clean break from the past and to
lay the groundwork for a future where the WTO and its members revive WTO-led
liberalisation and reform
End Doharsquos stranglehold and build towards near-term wins
To keep the multilateral trading system healthy it is necessary to end the Doha
Roundrsquos stranglehold on the system This should happen quickly in order to ensure
that the December 2011 ministerial meeting focuses on future work plans rather than
Susan SchwabUniversity of Marlyand former US Trade Representative
Acknowledge Doharsquos demise and move on to save the WTO
2727
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
28
recriminations about a Doha Development Agenda that has struggled through one failed
encounter after another
Negotiators should refocus their efforts on near-term wins and on building the next
Round ndash which need not be another behemoth but perhaps a ldquorolling roundrdquo of reforms
and new market access or a few highest-common-denominator plurilateral or WTO-
plus deals Ultimately these should lead to a broader-based market access and rules
agreement under the multilateral auspices of the WTO
The small package possibility
In my recent Foreign Affairs article (Schwab 2011) I suggested that negotiators should
try to salvage whatever partial agreements they can and then walk away from the rest
I mentioned a number of potential candidates such as trade facilitation and the largely
completed agricultural-export pillar (comprising proposed agreements on export credits
food aid state-trading firms and the elimination of export subsidies) Negotiators
might also try to complete two environment-related agreements one cutting subsidies
to industrial fishing fleets that are overfishing the worldrsquos oceans and the other ending
tariff and nontariff barriers to rdquogreenrdquo technologies in major producing and consuming
countries Taken together or individually each of these would benefit countries across
the spectrum of economic development
I am however sceptical that even these small agreements are achievable in the current
climate of mistrust and entrenched positions A troubling development during the course
of the Round has been how often countries seem to forget or forfeit their own economic
interests ndash let alone the greater good ndash in the face of peer pressure and group-think In
the current environment even these smaller deals might prove impossible to achieve
It is certainly worth trying to achieve a few deliverables by taking a run at a small
package but negotiators should not spend too much time on it They already know
exactly what the options are if they cannot get to ldquoyesrdquo in say two weeks they should
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
29
give up and move on to the real challenge of launching a new series of multilateral
negotiations under WTO auspices
Getting past Doha
How to conclude the Doha Round One option would be for the Director-General and
a representative sample of WTO Ambassadors to come together in the interest of the
institution and to offer a declaration of Doharsquos demise along with their pledge to begin
building the future That would enable leaders at the November G20 meeting to pledge
their support for the rules-based trading system the WTO and its next steps rather than
for the ever elusive ldquobalanced and ambitiousrdquo Doha outcome
After a short period of grieving over the death of Doha and an opportunity to get
beyond the anger lead trading nations should refocus on getting the WTO back into
its mainstream business of negotiating mutually advantageous market opening and
updating the global rdquorules of the roadrdquo This approach offers the best promise of a
meaningful ldquodevelopmentrdquo outcome as well
How might this be achieved
It seems unrealistic to think WTO members would agree to launch another massive
all-or-nothing round in the near future Such broad negotiations however will be
necessary to tackle some of the worldrsquos most important market access challenges in
services manufacturing and agriculture along with such issues as farm subsidies
There are ways to build-up to the big-round model again where countries once more see
economic self-interest in the use of broad-based negotiations and trade-offs to achieve
both new market access and market reforms First however we must re-establish trust
and regain momentum
One way forward would be for ministers to agree to launch a number of confidence-
building negotiations For example ministers in December could decide to open talks
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
30
on expanding the 1997 Information Technology Agreement a number of nations
seem interested and the US Administration already has the authority to implement an
enhanced agreement If negotiators fail to work through the 850 brackets in the current
Doha trade facilitation text that could also be tackled as a stand-alone agreement since
each nation would benefit from more efficient movement of goods and services across
borders
Another confidence-building measure might be a merger of sectoral agreements geared
toward a widely-shared objective such as cheaper better healthcare A package that
included pharmaceuticals medical devices and healthcare services might attract
support from the broad array of WTO members across the development spectrum Given
the high-level of public interest in and awareness of environment issues a sectoral
negotiation on environmental goods and services might be another confidence-building
deal once it is removed from the straightjacket that Doha has become
Lessons from Doha for next steps and the next round
Confidence building agreements would offer modest economic and social contributions
and serve to prepare the atmospherics for launch the next Round This brings me to my
last topic ndash the lessons we should draw from a decade of Doha talks
One thing that is quite clear from years of struggling with the basic structure of Doha
is that the combination of formula and self-selected flexibilities has not worked It
resulted in a situation where every negotiator had to assume the worst case ndash knowing
the political costs they would pay for their own liberalisation but expecting their trading
partners to use flexibilities to negate any meaningful new market-access It is possible
to draw from the best of the Doha formulas ndash such as the higher the barrier the greater
the cut ndash while still creating real negotiations around them through requests and offers
delivered using above- and below-formula cuts
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
31
Another key lesson is that lumping the worldrsquos very diverse economies into three
basic categories ndash developed developing and least developed ndash is a practice that no
longer fits 21st century economic and trade realities Nor is it a structure conducive to
negotiations and real progress based on an exchange of market access among nations
with large markets Yes the advanced economies should be expected to do more than
those at lesser stages of economic development but expectations should also reflect
the fact that many emerging economies are characterised by both poverty and sectors
where they are globally competitive trade powerhouses
The emerging economies have large markets represent over half of global GDP growth
and stand to be the biggest winners from any major trade agreement They should be
expected to contribute to the next Round accordingly Major trade agreements generally
take at least 12 years to implement from the time they are initially concluded What
should the world trading system look like in 2025 in terms of the absolute and relative
responsibilities of key trading nations
Concluding remarks
I am optimistic when it comes to the multilateral trading system and the WTOrsquos central
role in its governance The optimistic scenario is that we put the Doha Round behind
us Facing facts can invigorate and strengthen the trading system If we fail to act the
WTO risks losing its relevance
The Doha Round ndash which in my view cannot be concluded as it is conceived today ndash
should not be allowed to continue draining the WTOrsquos credibility and potential progress
on the multilateral front Now is the time to liberate the would-be trade liberalisers from
the Doha straightjacket and move on
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
32
References
Schwab Susan (2011) ldquoAfter Doha Why the negotiations are doomed and what we
should do about itrdquo Foreign Affairs MayJune
About the author
Ambassador Schwab has been a Professor at the University of Maryland School of
Public Policy since January 2009 and a strategic advisor to Mayer Brown LLP (global
law firm) since March 2010 Ambassador Schwab served as US Trade Representative
from June 2006 to January 2009 and as Deputy US Trade Representative from
October 2005 to June 2006 Prior to her service as Deputy US Trade Representative
Ambassador Schwab served as President and Chief Executive Officer of the University
System of Maryland Foundation from June 2004 to October 2005 as a consultant
for the US Department of Treasury from July 2003 to December 2003 and as Dean
of the University of Maryland School of Public Policy from July 1995 to July 2003
Ambassador Schwab serves on the boards of Boeing Company Caterpillar Inc and
FedEx Corporation
She holds a BA in Political Economy from Williams College a Masters in Development
Policy from Stanford University (Food Research Institute) and a PhD in Public
Administration and International Business from The George Washington University
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
33
Hopes for finishing Doha in 2011 are fading fast This essay suggests a three-track
approach for moving beyond the Doha crisis 1) Identify a package of ldquodeliverablesrsquo ndash
parts of the Round that could be agreed by December 2011 2) Assemble a package of
contentious issues for ongoing negotiation with clear terms of reference 3) Establish
a work programme to consider WTO institutional reform and forward-looking issues
For reasons that are too well known to be repeated the WTO finds itself at the crossroads
Decisions to be taken in the next few weeks will determine whether it can steer its
way to a successful conclusion of the Doha Round in the near future Failing this the
Round will continue to hang like an albatross around the WTOrsquos neck preventing it
from delivering the promised boost to least developed nations and freezing its ability
to address new challenges to the global trading system All countries would suffer from
such an outcome but especially the worldrsquos poorest and most vulnerable
The cost of a never-ending Doha Round
The adverse implications of a continuing Doha impasse on the future role of the WTO
are too compelling to be dismissed offhandedly
Several trade-linked global problems require global cooperation Food security energy
security trade-related aspects of climate change labour mobility commodity price
volatility and integration of regional liberalisation into the multilateral system are
problems that can only be solved with global cooperation
Ujal Singh BhatiaFormerly Indiarsquos Ambassador and Permanent Representative to the WTO
Next Steps Getting past the Doha Round crisis
3333
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
34
For example if food exporters continue to impose export barriers when prices rise
food importers may respond with import barriers to boost self-sufficiency This sort of
protectionist reverberation could lead the world to a situation in which all the players
are worse off but none can improve the situation unilaterally Avoiding this sort of
outcome would require global agreements There are very few global institutions that
could manage such cooperation indeed the WTO might be the only one A WTO locked
in endless Doha debates cannot be the centre of the rules based global trading system
There are many thinkers who believe that the structure of WTO rules is robust enough
to withstand a Doha failure It is true that the sky will not fall if Doha is terminated
without a conclusion Such analysts however tend to underestimate the significant
structural changes taking place in the global economy and the trading system The
WTO is working on a set of rules agreed upon in 1994 that were based on an agenda
set almost a quarter of century ago These are still useful and relevant for much of
world trade ndash but not all For instance the rules were not designed for the technology-
driven fragmentation of the manufacturing process and the distribution of the product
value chain across several geographical locations the intertwining of production with
related services the embedded intellectual property rights in components and sub-
components or the multiplicity of rules of origin All these require a different approach
to rule making
A WTO that remains preoccupied with the Doha Round cannot be expected to focus
on such issues Therefore the continuing relevance of the WTO and its primacy in
the global trading system are contingent upon a successful and early conclusion of
the Doha Round Notwithstanding this urgency it is now clear that a Doha package
cannot be wound up in 2011 along the lines agreed by G20 leaders in November 2010
To prevent this from tying the WTO in knots for years to come it is necessary to think
creatively about ways forward
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
35
Ideas for moving beyond the impasse
Any effort to deal with the impasse in the negotiations needs to be based on a holistic
appreciation of the systemic implications of a continuing stalemate as much as on the
negotiating positions of various members The efforts for a solution acceptable to all
members therefore need to focus on issues in the Doha mandate as well as on issues for
a post Doha situation
Within this framework four constraints need to be borne in mind
bull A ldquoDoha Literdquo of reduced ambition will not work The outcome has to reflect a dec-
adersquos efforts of the global community Ambition however cannot be defined to suit
the convenience of a few members It must touch all aspects of the Doha mandate
bull Aspects of the Doha mandate that are more relevant to the development dimension
have to be ambitiously addressed and fast tracked
bull WTO needs to start work on a new work programme to address new challenges
bull The Doha Round cannot be completed in 2011 A down payment is necessary from
the Doha Round this year to convince the world that the WTO can deliver
A three-track approach
These constraints require the WTO to adopt a three-track approach during the next few
months leading up to the ministerial meeting in December 2011
Track 1 Identification of a list of issues that specially address the trading interests
of smaller developing countries and relatively less contentious issues for fast tracked
finalisation before the ministerial meeting
Track 2 Identification of a package of the more contentious issues for continuing
consultations with clear terms of reference
Track 3 Identification of appropriate terms of reference for a work programme on
WTO institutional reform and the forward-looking agenda
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
36
A possible timeline
These three tracks taken as a package would provide a way forward that respects all
four constraints Achieving consensus on them would be difficult ndash and require months
of preparatory work and negotiations
If the WTO membership starts immediately however there is still time to get the
package ready for finalisation by ministers at the December 2011 ministerial meeting
For this to happen it is essential that discussions on such a package begin this month
so that its contents can be finalised by the end of June 2011 This would leave about
four working months before the ministerial meeting to complete negotiations on the
selected areas
What the three tracks might contain
The first track would contain the Doha down-payment package As with any WTO
package the contents would need to be negotiated and it might require complementary
policies such as technical assistance initiatives
Such a list must include items that speak to development aspects of the Doha mandate
such as
bull The Implementation of the Hong Kong decision on duty-free quota-free treatment
for less developed countries
bull A ministerial decision on the Monitoring Mechanism for Special and Differential
Treatment provisions
bull A ministerial decision on the issues raised by the Sub-Saharan African cotton ex-
porters (the group known as the C-4) and
bull The finalisation of a less-developed-country (LDC) waiver in services so that pref-
erential treatment can be provided to LDCrsquos in services without extending it to
others
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
37
It should also include areas of the negotiations that engage the interest of all members
such as
bull Trade Facilitation
bull All aspects of export competition in agriculture including export subsidies
bull The Transparency Mechanism for regional trade agreements (RTAs)
bull The non-tariff barriers (NTBs) package in non-agricultural market access (NAMA)
and
bull A ministerial decision on interactions and relationships between the WTOrsquos rules
and its committees on the one hand and existing multilateral environmental agree-
ments on the other (eg the Basel Convention on the Control of Transboundary
Movements of Hazardous Wastes and the Montreal Protocol on Substances that
Deplete the Ozone Layer)
While some members would like to exclude some of these areas from a fast tracked
process in the hope of using them for trade offs in the final stage it is important that the
package is as comprehensive as possible
Track two Items for further negotiation
The second track would gather all remaining items currently under negotiations This
would include
bull All aspects of market access in industrial goods agriculture and services
bull All aspects of subsidies in agriculture
bull Various aspects of rules including fisheries subsidies
bull Environmental goods and
bull Issues related to trade-related aspects of international property rights (TRIPS) re-
garding the protection of Geographical Indicators and the protection of traditional
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
38
knowledge and folklore that were are mentioned in the Convention on Biological
Diversity1
The need for a balanced package deserves emphasis It is often assumed that there
is a straight trade-off between agricultural subsidies and market access The situation
however is more complex The interest of countries like India China and Indonesia
in agricultural reform is more systemic than export related For them other incentives
within the mandate will be required
Track three Looking ahead
The underlying theme for the work programme would be an appraisal of the entire
negotiating and decision-making process in the WTO in the context of the present
realities both within and outside the organisation The objective would be to prepare
the WTO to address new challenges to the global trading system concurrently with the
ongoing work on the remaining parts of the Doha mandate
Closing remarks
The above proposals constitute a basic template for addressing the Doha conundrum
To what extent they are actually embraced will depend on how much political capital
the major members of the WTO are prepared to invest in moving the Doha Round
forward There is much scepticism about whether such political will exists It is time
for governments to prove the sceptics wrong
1 Specifically as specified in paragraphs 18 and 19 of the Doha Declaration
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
39
About the author
Ambassador Bhatia Singh joined the Indian Administrative Service in 1974 holding
several senior positions in provincial administration in Orissa State between 1976 and
1995 He served as Joint Secretary Ministry of Commerce and Industry between 1995-
2000 in which capacity he handled a number of bilateral regional and multilateral trade
negotiations From 2004 to his retirement in 2010 he served as Indiarsquos Ambassador and
Permanent Representative to the WTO in Geneva
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
41
Doha is deadlocked This essay argues that the options are i) to declare the negotiations
dead ii) to suspend them until after the US elections or iii) to negotiate an early-
harvest agreement for the end of this year The author strongly believes that the early
harvest is worth the extra efforts ndash for both the WTO and the worldrsquos poorest
I am greatly interested in the discussions among experts and professors recently on the
future of the Doha Round While I can feel their strong sense of frustration about the
deadlock I donrsquot see any real possible solutions for the problems at hand I donrsquot have
one either The lack of a solution is probably due more to political problems than to
technical problems
Next steps
To announce that the Doha Round is dead would be easy But then what Would such
an announcement inspire people to inject more energy to the work of the organisation
Would it serve the purpose of strengthening the multilateral trading system I rather
doubt it
After dropping the Round what could be done next Just continue with business as
usual Should members only focus on trade policy reviews on regular meetings in the
bodies under the General Council and on dispute settlement cases Should they take
it for granted that the panellists and Appellate Body members will be able to fill in
the gaps of writing new rules for the world trading system This does not sound very
attractive
Zhenyu SunChina Society for World Trade Organization Studies
Next Steps Is an early harvest still possible
4141
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
42
The need for progress and the difficult options
If the WTO is to remain relevant its members must negotiate new rules How could
they do this Could there be a completely new round sometime later Or could there
be new rules or amendments of the old ones adopted at each and every council or
committee separately
One option would be to launch a new round To start a new round post-Doha however
could be even more difficult than the Doha Round itself People have tasted the
failure of Seattle In any new round members could not ignore the built-in agenda of
agricultural subsidies or discussing the tariff-cutting formula on agricultural and non-
agricultural products or services trade and rules It may still be difficult to cover labour
and environmental standards In any case the hard bargaining over the past 10 years
would not disappear with the start of a new round
Another option could be to rule out all rounds after Doha To not even to talk about the
ldquosingle undertakingrdquo any more ie to abandon the negotiating principle heretofore
respected where all WTO members must agree to all aspects of the final package This
option would just let the councils and committees continue with their normal functions
setting new rules and amending old ones on their own I personally believe this option
might be feasible but it is not in line with 60 years of WTO common practice Members
may not like this option because it could rule out trade-offs across interests in other
areas
Early harvest as the way forward
If dropping the Round is not an attractive option and if waiting till after the next US
election is likewise unappealing the only option left is some kind of rdquoearly harvestrdquo to
be adopted at the December 2011 ministerial meeting
I am fully aware that some members are strongly against the idea of an early harvest
Even if they could eventually negotiate a duty-free quota-free agreement for the worldrsquos
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
43
poorest nations an agreement on cotton and an agreement on trade facilitation they
are unlikely to agree to implement them now because they will need to use these issues
to negotiate trade-offs with their other interests I would like to make an appeal to those
members
Guarding the future of the multilateral trading system
It is high time that people gave more considerations to the future of the multilateral
trading system and less to their short-term national economic interests As the APEC
leaders reiterated at a recent summit
ldquoWe uphold the primacy of the multilateral trading system and reaffirm that this
strong rules-based system is an essential source of sustainable economic growth
development and stability We take considerable satisfaction in the success of
the WTO its existing framework of rules and its consultative mechanisms in
contributing to the beginnings of global economic recovery The WTO has amply
proven its worth as a bulwark against protectionism during a highly challenging
periodrdquo
I do hope that people take this statement seriously This means giving thought to ways
to save the credibility of this organisation to deliver the promise of a development
round and to make sure that this organisation is still relevant to 21st century trade
matters Safeguarding the future of the WTO is particularly important at a time when
the world has experienced the global financial and economic crisis the upheaval in the
Middle East and when we face great uncertainties
Content of the early harvest
Certainly there could be more detailed discussions on what issues should be included in
the possible package If members are willing to move along that line there is still time
to finalise the content My friend Ujal Singh Bhatia (WTO Ambassador from India until
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
44
2010) has indicated some areas where members could try to build consensus and adopt
a decision at the December 2011 ministerial meeting (Bhatia 2011) I strongly believe
that it is worthwhile to make some extra efforts along the lines he has proposed
bull In any case duty-free-quota-free treatment for LDCs and the issue of cotton have to
be included in the package
These are decisions taken at the Hong Kong Ministerial Meeting its immediate
implementation would be conducive to addressing the great concerns of the poorest
countries and thus very much in line with the principle of the Doha Development Round
bull Trade facilitation could bring benefit to all members
It could help trade expansion enormously and bring even more benefit to trade than
would further reduction of tariffs It could also help President Obama achieve the goals
of doubling US exports in the next 5 years and substantially increasing employment at
home
bull The date for expiration of export subsidies at 2013 was adopted at the Hong Kong
ministerial meeting and should be included in the package
The EU may want to bring in some other issues to balance its interests Personally I
believe it is doable through adding some issues of their interest such as environment
products to the package
Concluding remarks
When they meet in Geneva this December I am sure that members would prefer to have
their trade ministers making some kind of substantive decisions An early package for
the Doha Round is probably a suitable one for the ministers to consider and to deliver
at their meeting later this year
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
45
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
About the author
Zhenyu Sun the Chairman of China Society for World Trade Organization Studies
served as the Ambassador and Permanent Representative of China to the WTO from 2002
to 2010 He served as vice minister of Moftec (Ministry of Foreign Trade and Economic
Relations which later became Mofcom Ministry of Commerce) from November 1994
till 2002 when he went to Geneva as WTO Ambassador Born in Fengnan County
of Hebei Province in March 1946 Mr Sun Zhenyu graduated from Beijing Foreign
Languages Institute in July 1969 From 1973 to 1985 he served successively as staff
member Deputy Director and Director in the Third Department for Regional Affairs of
the Ministry of Foreign Trade During this period he worked on bilateral trade relations
between China and UK later between China and European Community From 1985 to
1990 he worked as Vice President of China National Cereals Oil and Foodstuff Import
and Export Corporation (COFCO) focusing on the companyrsquos business with Japan and
South-east Asian Countries
In 1989 he attended one year program of Management Training Course for senior
executives sponsored by UNDP in cooperation with University of British Colombia
Canada and Manchester University UK From 1990 to 1994 he served as Deputy
Director General and Director General of Department of American and Oceanic Affairs
of the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) working on
bilateral trade relations with US Canada Australia New Zealand and Latin American
countries during this period He participated on separate occasions in Sino-US bilateral
negotiations on Market Access Textiles and Intellectual Property Rights
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
47
The Doha Round is stuck This essay argues that finishing Doha would be best but
if this is impossible we should admit it and move on Investing more resources and
credibility in a failure would only damage the WTO and multilateral cooperation
Leaders should turn their energies towards building an agenda for the WTOrsquos future
work that responds to 21st century interests Getting this right is critical the WTO
cannot afford another failure if Doha dies An early harvest is an excellent idea but
only if it can be done quickly
Bringing the Doha negotiations to a successful conclusion is by far the best course of
action The valuable contribution that such a development would make to strengthen the
trading system has been examined at length elsewhere No single achievement would
be more valuable than binding in the WTO rulebook the current level of trade protection
maintained by its members in all three areas of market access ndash industrial goods
agriculture and services This action would permanently capture the considerable
liberalisation that has taken place since the effective conclusion of Uruguay Round in
1993 It would also set a new start line for the launch of any subsequent negotiations
which will surely come before too long
If Doha cannot be completed hellip
Not completing the Doha Round would be a serious setback to the WTO and the
multilateral trading system However if it is clear that the Round cannot be concluded
successfully it is better to admit that and work constructively to develop an agenda for
John WeekesBennett Jones LLP
Getting past the Doha Round crisis Moving forward in the WTO
4747
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
48
the future work of the organisation It would be damaging to invest more resources and
credibility in something that canrsquot be done
The WTO itself remains an extremely valuable institution Its worth has been proven
by the role it played in discouraging its member governments from taking protectionist
actions during the recent global economic crisis The continued accession of new
members to the organisation is a further indication of just how valuable it is to the
international community In a world of global supply chains business needs a set of
multilateral rules within which to operate ndash now more than ever
Avoid the blame game
If the members decide that the Round cannot be brought to a successful conclusion
it will be important to avoid recrimination One thing is clear a major and sustained
effort has been made by all the members to try to deliver a successful outcome While
avoiding recrimination WTO members should spend some time reflecting on the
reasons for the current difficulties
One common mistake is to argue that the WTO as a whole is too big Many outside
observers suggest that with 153 members the WTO is too unwieldy an organisation
to address the challenges of 21st century trade particularly when decisions are taken
on the basis of consensus It is important to note therefore that blockages preventing
conclusion of the Round are not the large number of members but rather differences
among the largest and most powerful trading countries who would need to be party to
the conclusion of any major trade negotiation
One reason for Doharsquos problems is that the preparatory process for the Round was
inadequate While the built-in agenda that emerged in Marrakesh led to useful work
and provided a good basis in some areas it did not permit the sort of broad thinking
that should have gone into preparations for a major negotiating effort After the failure
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
49
in Seattle launching the Round as a political act in the face of terrorist threats in 2001
was not an adequate foundation
Develop the WTOrsquos future work programme over the next two years
WTO member governments should now begin to plan the future work programme of the
WTO The last major work programme undertaken in the multilateral trading system
began at the fractious GATT ministerial meeting in 1982 The work then undertaken in
the GATT was supported by efforts undertaken in other international organisations and
domestically by the various lsquocontracting partiesrsquo (as members were called back then)
The product of those efforts became the basis for launching and then concluding the
Uruguay Round negotiations Obviously the world of 2011 is very different from that of
1982 Global supply chains and the seamless connections between trade in goods trade
in services and investment present a series of new challenges for the trading system
Members should start to plan the future work now But this is work that should be done
properly and not in haste One of the problems with the 1990s built-in agenda was that
it was very difficult to introduce any new items into the discussion even including
consideration of further tariff liberalisation In order to avoid such difficulties it would
be useful to develop the future agenda over a two-year period Ministers at Decemberrsquos
ministerial conference could ask the General Council and the Director-General to
consider the matter and come forward with suggestions for the future work of the
organisation at the next ministerial conference in 2013
Do we need Doha ldquodown paymentsrdquo
Many ldquoplayersrdquo and observers have raised the question of what might be salvaged or
harvested if the Doha Round cannot be finished this year This is an excellent idea
provided it can be done quickly and efficiently If however it is going to take say more
than six months the effort should be abandoned I suspect it will not be easy to agree
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
50
on which parts of the Doha Round should be salvaged given the different priorities of
WTO members The effort would also serve the purpose of testing whether the WTO
can negotiate agreements outside the context of a round It would be very useful to have
an answer to that question
Concluding remarks
If the Doha Round is not successful the WTO cannot afford another failure Building
a solid agenda for the future work of the WTO that responds to the real interests of its
members needs to be a central task of the organisation
About the author
John Weekes is senior international trade policy adviser at Bennett Jones LLP with
a long experience in trade diplomacy and trade policy He was Canadarsquos Ambassador
to the WTO from 1995 to 1999 and Chair of the WTO General Council in 1998 He
was instrumental in the creation of the Committee on Regional Trade Agreements and
served as its chair from its inception in 1996 until he became Chair of the General
Council Prior to that he was Canadarsquos Chief Negotiator for NAFTA (1993 to 1995)
and Canadarsquos Ambassador to the GATT during the last multilateral trade negotiations
(Uruguay Round) He was a member of Canadarsquos negotiating team to the Tokyo Round
of GATT negotiations in the 1970s He is on the Board of the Washington-based Cordell
Hull Institute and Chaired the Management Board of the Advisory Centre on WTO
Law in Geneva
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
51
Stuart HarbinsonSidley Austin LLP
The good ship Doha Salvage-and-abandon-ship or repair-and-wait
The core Doha goals ndash better market access and rules for agricultural industrial and
services trade ndash still matter but Doha is a ship run aground This essay argues that the
choices are i) to abandon ship and try with a new ship later or ii) to patch up the holes
by delivering some progress in December 2011 and then wait for a high tide to carry us
off the rocks Only the latter is likely to achieve the core goals
The good ship Doha is well and truly stuck on the rocks Letrsquos make no mistake ndash the
rocks are substantial and there is no magic solution that will instantaneously get us off
them The choice now facing us is to salvage what we can and abandon ship or to patch
up the holes wait for a high tide and sail on
While the agenda is 10 years old and showing its age in some respects few are currently
advocating its abandonment This is because the issues at the heart of the Round still
matter ndash namely market access and rules for trade in agriculture industrial products
and services The critical test for deciding on immediate next steps should be whether
they would facilitate or complicate ultimate resolution of these difficult issues
Salvage and re-launch new negotiations An option that wonrsquot work
With a ministerial conference coming up in December attention has turned to what
some call ldquosalvagerdquo A salvage operation implies that the vessel is no longer seaworthy
we should just grab what we can and leave the ship to smash itself to pieces on the
rocks We would then have to look for another ship One of the problems with this
5151
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
52
scenario is that it would take quite a while to design and construct a new vessel suitable
for WTO negotiations Even then the new ship will have to negotiate its way around
many of the same rocks The problems we face in agricultural and industrial market
access for example will not simply disappear
Itrsquos tempting to think that we can simply salvage a few things forget about Doha and
start all over again with a better chance of success The reality would surely prove to
be quite different
Repair and carry on
This leaves us with the option of repair-and-carry-on (though not necessarily in the same
way as in the past) We would thereby acknowledge as Ujal Bhatia Singh eloquently
put it recently that we are ldquolashed to the mast of Dohardquo (Bhatia 2011) This however
should not be interpreted to mean that the WTO as an institution is locked in a death
embrace with the Doha Round
ldquoDeliverablesrdquo for the ministerial conference could constitute a patch to keep the ship
afloat until the high tide comes In this analogy the ldquohigh tiderdquo would be a change in the
global economic and political seascape enabling the major trading economies to settle
their differences and bring the ship safely into harbour
Admittedly there is an element of hope in this but on balance it does not seem likely
that the present highly inimical environment (recession unemployment exchange
rate issues major domestic policy preoccupations etc) will persist indefinitely
Furthermore as a result of intensive work in recent months key members are now
much clearer about the remaining gaps and what it would take to bridge them ndash a very
useful position from which to restart at the right time
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
53
The Doha Round is durable for a reason
That the Doha Round persists after the vicissitudes of over nine years of negotiations
is testimony to its robustness The widely held view that it was launched off-the-cuff in
reaction to the tragic events of 911 without substantive business or political backing
is not borne out by the historical record nor does it tally with my own experience as
Chairman of the General Council at the time
In the first place it is inconceivable that such a complex undertaking could have
been agreed in the space of two months Efforts to launch a round in fact began well
before the ill-fated Seattle Ministerial Conference in 1999 These efforts received
considerable reinforcement from the failure of the Uruguay Round ldquobuilt-in agendardquo
negotiations on agriculture and services to deliver results Recall that the Agreement
on Agriculture refers to the ldquoContinuation of the Reform Processrdquo a process to which
many governments and industries were ndash and still are ndash strongly committed Many
services industries stimulated by the WTOrsquos successes in moving forward in financial
services and basic telecommunications in the late 1990s were similarly champing at the
bit While it is true that there was also some opposition the history of the preparatory
process in 2001 shows clearly that well before 911 the working hypothesis for the
Doha Ministerial Conference was the launch of a new round
As the first chairman of the Doha agriculture negotiations commencing in 2002 I can
also testify personally to the intense business and political interest at that time If such
interest has subsided this could be ascribed to the apparent lack of movement in the
negotiations and the changing political and economic dynamics since the Round was
launched
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
54
Deliverables would be welcome ndash as long as expectations are reasonable
Given the extremely strong commitment displayed by WTO members both in launching
the Round and resolutely pushing it forward over an extended period as well as the
high-level political commitment restated only six months ago a concerted effort to
identify a decent number of ldquodeliverablesrdquo for the eighth ministerial conference in
December would certainly be welcome
Nevertheless it might be prudent not to invest too much expectation in this process
There is a danger that such an exercise would involve multiple ldquoshopping listsrdquo which
would prove in a number of instances to be irreconcilable The last thing the WTO
needs at present is to have a lengthy and acrimonious discussion about ldquodeliverablesrdquo
culminating in a paltry agreement or worse still no agreement at all
Possible deliverables
The emphasis on ldquodeliverablesrdquo should be on the rules elements of the Round since
market access remains highly contentious and linkages make it unlikely that partial
results could be delivered Even within rules few issues come without caveats attached
Among the candidates (concentrating on Doha issues in no particular order) appear to
be the following
bull Trade facilitation is most often mentioned although substantive issues remain to be
resolved including technical assistance
It is questionable if an agreement should be rushed into if it involves too many
compromises However if it can be delivered this would be a major boost
bull An agreement on the export competition pillar in the agriculture negotiations would
also be a very substantive contribution
Whether the political will exists to settle this in advance of the remainder of the
agriculture package is a question that will need to be answered
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
55
bull Domestic regulation in services may be considered as another significant possibil-
ity
However this item is linked with market access and the stumbling block of the ldquonecessity
testrdquo issue remains so the chances may not be great
bull Non-tariff barriers There should be a trawl through the negotiating issues in an at-
tempt to identify possible ldquodeliverablesrdquo
Realistically an agreement on transparency may be the most likely
bull The least-developed country waiver in services is more feasible though its utility is
limited without services commitments
bull Progress building on the ldquoduty-free-quota-freerdquo (DFQF) market access commit-
ments for least-developed country agreed at the Sixth Ministerial Conference would
be highly desirable
However there are political issues to be overcome Reviews of Generalised System
of Preferences (GSP) schemes in the US and EU may be a complication and duty-
free-quota-free raise the tricky issue of rules of origin there is a very real issue to be
resolved here and concerns over circumvention must be addressed
bull Cotton also falls into the highly desirable category
Political realities in the US may still prove to be an insuperable obstacle in 2011
although it may be possible to grapple with these at a later date with a new US Farm
Bill and especially if the Round as a whole is concluded
bull Agreement on a monitoring mechanism for ldquospecial and differential treatmentrdquo
would be useful
Though perhaps not in itself a major achievement this would constitute a welcome
confirmation that the development component of the Round is not sliding off the deck
bull Definitive implementation of the transparencymonitoring mechanism on regional
trade agreements
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
56
This would be a strong signal that the WTO is developing its surveillance functions in
this area
bull Considerable difficulties persist in the negotiations on fisheries subsidies
It seems highly unlikely that these could be resolved in time to deliver an agreement in
December One possibility may be to aim for a ldquostandstillrdquo arrangement so that existing
levels of subsidies would not be increased pending an agreement
bull On trade and the environment it should be possible to deliver on paragraphs 31(i)
and (ii) of the Doha Ministerial Declaration ndash the relationship between WTO rules
and Multilateral Environmental Agreements including information exchange be-
tween the WTO and the Multilateral Environmental Agreements such as the Mon-
treal Protocol
Desirable as it is any agreement on reducing barriers to trade in environmental goods
and services seems unlikely since this is closely linked with negotiations on market
access for industrial products
bull In trade-related aspects of intellectual property rights (TRIPS) the register of Geo-
graphical Indications for wines and spirits might be doable in isolation but linkages
to the extension of additional protection to other Geographical Indications and to
agriculture may prove to be a major complication
Overall there is a reasonable prospect of constructing a respectable package especially
if trade facilitation and export competition can be included
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
57
What to call the deliverables and what to do with the rest
Whether WTO members should have the gall to characterise any such agreements
as ldquoearly harvestrdquo is another question In any case the idea would be to activate the
mechanism foreseen in the second sentence of paragraph 47 of the Doha Ministerial
Declaration1 Even if the eventual list were modest it would be a positive contribution
and a sign that Doha has not sunk
As regards the remaining issues ndash the great bulk of the Doha negotiations ndash members
should once again recommit themselves to completion of the agenda as soon as possible
In practice that is likely to be when the global economic and political climate is more
conducive While this might provoke yawns in some quarters it is preferable to other
alternatives such as formal suspension or attempting a fundamental reconfiguration
which could result in a complete unravelling One might recall Winston Churchillrsquos
frequently uttered response to repeated adversity ndash ldquowe must just keep buggering onrdquo
(which he often shortened to the acronym ldquoKBOrdquo)
Moving the WTO forward while Doha is waiting for a high tide
Over the coming weeks and months in my view the WTO should not stop with a repair-
and-wait strategy While the non-negotiating functions of the WTO ndash usually described
as dispute settlement and monitoringsurveillance ndash are in reasonably good shape they
are not sufficient in current circumstances especially given the state of the Round to
convince sceptical outsiders that the organisation is as functional as it should be
If in 2012 (and possibly 2013) Doha is going to assume a lower profile the opportunity
should be taken to exploit some of the other strengths of the WTO that have fallen out
1 Paragraph 47 reads ldquoWith the exception of the improvements and clarifications of the Dispute Settlement Understanding the conduct conclusion and entry into force of the outcome of the negotiations shall be treated as parts of a single undertaking However agreements reached at an early stage may be implemented on a provisional or a definitive basis Early agreements shall be taken into account in assessing the overall balance of the negotiationsrdquo
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
58
of the limelight in recent years Members could for example agree to reinvigorate and
give higher priority to the deliberations of the regular councils and committees These
bodies were relatively vibrant in the period 1995 to 2000 Some still are but others are
no longer being as fully exploited
This might also offer an avenue to answer to some extent critics who argue that the
WTO is locked in an outdated agenda and not addressing new areas of concern
Why should some of these ldquonewrdquo issues not be discussed in the regular (non-negotiating)
machinery This is already beginning to happen to some extent ndash for example the
recent discussion in the working group on trade debt and finance on the relationship
between trade and exchange rates and the agriculture committeersquos discussions of food
security There are numerous other candidates for similar treatment some controversial
perhaps but others less so Could relevant WTO bodies discuss some of the supply-
chain issues frequently mentioned by businessmen That might offer a welcome means
of reconnecting the WTO with the business community The Trade Policies Review
Mechanism might also be overhauled What has happened to the work programme on
e-commerce
Discussion of current issues in the regular machinery might in some cases lead
nowhere In others it could lead to some strategic thinking about the future shape of
the multilateral trading system and prepare the ground for further developments
Conclusion
To summarise it does not seem to be necessary to abandon the good ship Doha in order
to start moving forward into as yet uncharted waters
References
Singh Bhatia Ujal (2011) ldquoSalvaging Dohardquo VoxEUorg 10 May
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
59
About the author
Stuart Harbinson is Senior Trade Policy Adviser at Sidley Austin LLPrsquos Geneva
office He joined Sidley Austin after gaining extensive trade policy experience in
several high-level positions in the United Nations World Trade Organization and Hong
Kong Government
When Permanent Representative of Hong Kong China to the WTO Mr Harbinson
chaired the General Council in 2001-2002 overseeing preparations for the Doha
Ministerial Conference He subsequently served as the first chairman of the agriculture
negotiations He was Chief of Staff to Director-General Dr Supachai Panitchpakdi
from 2002 to 2005 and Special Adviser to Director-General Pascal Lamy from 2005
to 2007
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
61
After 10 years of much progress and much frustration with the Doha Round it is time
to find a new approach to bring the negotiations to a successful conclusion This essay
argues that success would require four things implemented simultaneously i) a Doha
down-payment package agreed this year ii) an understanding of how to reorganise
continuing talks on the most contentious issues iii) commencement of a WTO work
programme on 21st-century trade issues and iv) a bold initiative by middle power WTO
members to try to unblock the talks
World leaders are in a bind over the Doha Round Carrying on with business as usual is
no longer an option ndash the impasse that has emerged cannot be solved with a few more
negotiating sessions Abandoning the Round has been ruled out by almost all WTO
members nor is there much appetite for suspending the Round This quandary has trade
ministers and diplomats casting around for creative solutions
Getting the WTO past the Doha crisis
After talking with ambassadors and senior officials from a wide range of delegations in
Geneva and a few from national capitals we pulled together the elements of a plan that
might suggest a way forward The plan has four dimensions
Richard Baldwin and Simon EvenettGraduate Institute Geneva and CEPR University of St Gallen and CEPR
Keeping the WTO on track A Doha down payment plus more
6161
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
62
1 What to do for the December 2011 ministerial meeting
While finishing Doha this year is impossible the WTO could have something to show
for its 10 years of work This progress could be locked in A small package or set of
stand-alone agreements could be finalised this year ndash what some call ldquoearly harvestrdquo
results and others call ldquoDoha deliverablesrdquo or the ldquoDoha down paymentrdquo
The long-scheduled meeting of trade ministers for 15-17 December 2011 provides a
natural focal point for finalising these results
Although these agreements would not constitute a major economic breakthrough it
would be a wise political response to the Doha crisis It would demonstrate that the
WTO is alive that it is forum where things can get done
The nature of the package is dictated primarily by practicality ndash we can think of
including only those items where agreement is already close There would also be great
merit both politically and economically to focusing on issues that benefit the worldrsquos
poorest countries The failure of the largest trading nations to find a compromise that
suits them shouldnrsquot be allowed to hold up sensible progress for the least developed
nations
The other essays in this eBook discuss the possible items that might be included in a
Doha down payment We have not been at the cutting face of the negotiations so we
cannot form an independent judgement of what is practical Canvassing opinions in
Geneva however the most likely items seem to be
bull An accord on duty-free quota-free treatment for least developed nations
bull A waiver that allows WTO members to provide preferential access to services trade
from least developed nations
bull An agreement to reduce distortions in cotton to the benefit of least developed na-
tions
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
63
bull A package of measures that promote lsquotrade facilitationrsquo ie reducing barriers to
imports stemming from excessive red-tape barriers in customs inferior port infra-
structure and other non-trade-policy impedances to trade
bull Agreement on a monitoring mechanism for special and differential treatment
bull Agreement to make permanent the RTA Transparency Mechanism that has been
operating successfully for years and
bull An agreement on certain non-tariff barriers such as the Horizontal Mechanism and
textile labelling
Other issues may ultimately prove tractable or necessary to provide balance Those
most often mentioned include a standstill agreement on fisheries subsidies certain
aspects of the less controversial rules negotiations and export subsidies
2 What to do with the rest of the Doha agenda
The small package that might be ready for December 2011 would not solve the WTOrsquos
first order negotiating challenge A vast range of economic interests are still counting on
the Round to deliver major progress on market access for industrial goods agricultural
products and services If we are to maintain a semblance of cohesion among WTO
members there will have to be an agreement to continue negotiations on the core issues
But the principal negotiating processes used to date havenrsquot worked Efforts by the
Big 5 ndash as they are sometimes called ndash failed to find a compromise among themselves
There are many explanations for this failure but one thing is clear ndash not all trade-offs
were explored In particular the process has this year fixated very much on trade-offs
within industrial goods liberalisation (NAMA) Trade-offs with other areas (services
antidumping rules and others) werenrsquot considered
This suggests that the December 2011 meeting could reorganise the process in a way
that is more likely to bear fruit Here are some elements that resonated with many WTO
members with whom we spoke
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
64
bull Have a real negotiation under multilateral control with a ldquoconductorrdquo acting as an
impartial player with responsibility of assisting members to reach agreement
This suggests that an essential question will be the choice of the conductor (more on
this below)
bull The negotiations must be horizontal
Except for some issues in particular areas where useful work can still be done regardless
of results in other areas (fisheries subsidies for example) the negotiations should be
horizontal All areas should be on the table without a priori sequencing Thus a package
can be built with trade-offs across the board
bull Forget ldquomodalitiesrdquo
The original sequencing of the talks ndash known in WTO-ese as modalities ndash has not
worked1 Perhaps this should have been obvious from the start but now it is clear to
all No government can be expected to agree to formulae and other elements without
knowing the full impact of such an understanding
For example by common agreement nations get to choose a limited number of products
to exclude from tariff cutting As nations know better where they themselves will apply
the flexibility we have a situation where nations know what they are conceding on
tariffs but they donrsquot know what their exporters will be getting in exchange Only when
countries bring their national tariff schedules to the bargaining table will we know
what the formulae will actually mean tariff line by tariff line ndash the level that ultimately
interests business
This is one of the things the December ministerial meeting could decide It could set
a date for the submission of schedules (for industrial goods agricultural products and
services) This would unleash a process of real negotiations
1 The idea that first there would be an agreement on the levels of ambition in agriculture and NAMA with this conditioning discussions on sectorals and the remaining areas
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
65
These changes need to be made explicit What momentum exists comes from a decade
of negotiation groups working in silos This momentum needs to be redirected by a
ministerial decision One part of this that would be critical to keeping the process in
some sort of order would be to grant a sort of ldquoconductorrsquos rolerdquo to the WTO Director-
General in his role as chair of the Trade Negotiations Committee It was a good idea to
try to let the Big 5 find their way to an accord but it did not work
3 Keeping the WTO relevant to 21st-century trade issues
Members should look beyond the 10-year-old Doha agenda and agree to a work
program to begin a discussion and analysis (not necessarily a negotiation) of other
issues relevant to todayrsquos economic relations Some of these could be
bull Investment
Trade and investment have long been linked but internationalisation of supply chains
has greatly strengthened the link For most WTO members a pro-trade policy requires
a pro-foreign-investment policy This has blurred the line between what is a trade policy
and what is a domestic or investment policy
For example during the global economics crisis many countries set up protectionist
measures on investment Indeed these went up even among members of the EU
The demand for mutually advantageous disciplines can be seen by the popularity of
investment measures that are covered in 21st-century free trade agreements Frequently
these include investment chapters guaranteeing national treatment and most-favoured-
nation treatment on a reciprocal basis
bull Competition policy
Now more than ever there is a greater appreciation of the harm that exercising monopoly
power can have on international trade and developing countries Ask any developing
country farmer who has had to bargain with large foreign supermarkets or has had to
pay extortionate prices for its produce to be transported to the local port or airport
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
66
Access to foreign markets is impaired as well as the gains from globalisation
compromised by anti-competitive practices The spread of competition law enforcement
around the globe has put in place one building block now the challenge is to develop
international collaboration between enforcement agencies to tackle specific cases of
anti-competitive conduct
bull Climate change
Attempts to arrive at multilateral agreements on climate-change policies failed last year
Nations are thus pursuing uncoordinated national policies aimed at climate-change
mitigation and adoption Taxes subsidies and regulations are part of these plans and
this brings them potentially into conflict with WTO rules that were designed without
climate-linked policies in mind WTO members could usefully address the question
of whether the present rules are sufficient andor appropriate to meet this 21st-century
policy challenge Is there a need to devise special disciplines and increase transparency
Is there a need to define acceptable limits or complementary policies
bull Export restrictions and duties
Whether on food raw materials or other goods the present disciplines are quite weak
as the GATTWTO rules were written in an era where imports (exports) were almost
universally viewed as a political bad (good) Rules on export restrictions simply werenrsquot
necessary The 21st century however has witnessed frequent imposition of such
measures As these can lead to a classic lsquoprisonersrsquo dilemmardquo they are naturally suited
for WTO-like disciplines that help maintain a win-win situation in the face of unilateral
incentive to undermine cooperation Just as with tariffs the point would not be to ban
such restrictions They may be necessary and indeed useful in certain circumstances
but multilateral disciplines would be useful to prevent their application from leading to
unintended consequences
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
67
bull Revisit some of the WTO Agreements
The world of trade has changed radically since the WTO Agreements were struck
in 1994 Some such as the Agreement on Safeguards could probably due with an
updating
bull Enhanced transparency
Current transparency practices could certainly be improved to the benefit of all Now
they are based on notifications by members with the result that they are very often
incomplete and late The suggestion here is to discuss ways of improving this perhaps
leveraging new information technology
bull Government Procurement Agreement
Governments buy a very large slice of the worldrsquos goods and services Moreover there
is an increasing realisation that open procurement is beneficial to taxpayers by lowering
costs and to consumers by boosting competition and quality Indeed procurement is
frequently the subject of ambitious free trade agreements All this suggests that re-
visiting the market access provisions of the Government Procurement Agreement in
future negotiations might produce mutual gains for a wide range of WTO members
bull Institutional reform
The Marrakesh Agreement signed in 1994 was the last time the organisationrsquos structure
was examined in its entirety Since then the world of trade has shifted radically ndash most
obviously in terms of the trade weight of some developing nations but also in terms
of how the internationalisation of supply chains has blurred the distinction between
trade policies and domestic policies This suggests that a cooperative and construction
evaluation might reveal improves that could attract widespread support
4 A bold initiative from the middle powers
This is a round where the biggest players failed to provide leadership There may be
many reasons for this but the fact is not in dispute The Big 5 gave up trying to work
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
68
out a compromise (although at the last minute the EU made an unsuccessful attempt to
find an approach to bridge one of the gaps) This failure perhaps reinforced by a lack
of trust among the biggest players created a vacuum
One idea that could help unblock the broader talks is a bold unilateral move by the
middle trading powers These WTO members have often been a source of terrific ideas
in the past this time around they might demonstrate their additional commitment to
the multilateral trading system precisely when so many commentators and business
interests appear to have discounted the WTO Such a bold step could encourage other
WTO members to follow suit injecting a further liberalising dynamic
While middle powers cannot realistically expect much from ldquoholding outrdquo for bigger
concessions a simultaneous set of unilateral moves by this group could generate
commercial opportunities that influential business lobbies would notice Not to mention
that a welcome injection of competitive pressure would keep producers and traders in
the middle powers on their toes
The middle trading powers could for example
bull Offer to bind their tariffs at the applied level even if the application of a formula
doesnrsquot go below the bound level
bull Offer to bind 100 of tariff lines on NAMA If a tariff line is unbound bind at the
applied level
bull Table improved offers on services that reflect unilateral liberalisation undertaken
to date
bull Freeze all harmful fisheries subsidies and offer to reduce them by 10 in the first
year provided a critical mass of members do the same
bull Offer some additional restraints on the use of flexibilities presently available in the
Agriculture and NAMA draft modalities
bull Implement trade facilitation even before it becomes a legal obligation
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Next Steps Getting Past the Doha Round Crisis
69
bull Implement improvements in transparency obligations under the Antidumping and
the Subsidies and Countervailing Measures Agreements
bull Provide duty-free quota-free treatment for 100 of products for least developed
countries with flexible rules of origin
bull Offer tariff concessions on environmental goods
Concluding remarks
After 10 years of much progress and frustration with the DDA programme it is time
for a new approach to bringing negotiations to a successful conclusion doing so in a
way that enhances the contemporary relevance of the WTO Such an approach ndash like
the others described by contributors to this eBook ndash imply that the current impasse is
not inevitable
Here we have outlined a four-part approach which WTO members could take up
over the summer of 2011 and have tangible results to show for the WTO Ministerial
Conference in December 2011 Such ldquoa Doha down paymentrdquo would demonstrate
that the WTO can deliver it would build confidence Work on many other items ndash
including the remaining elements of the DDA ndash would go beyond that time Should
further momentum develop no doubt other initiatives could be taken on board Partly
through action partly through reflection a renewed WTO would emerge as this process
unfolded over time
About the authors
Richard Baldwin is Professor of International Economics at the Graduate Institute
Geneva since 1991 Policy Director of CEPR since 2006 and Editor-in-Chief of Vox
since he founded it in June 2007 He was Co-managing Editor of the journal Economic
Policy from 2000 to 2005 and Programme Director of CEPRrsquos International Trade
programme from 1991 to 2001 Before that he was a Senior Staff Economist for the
Presidentrsquos Council of Economic Advisors in the Bush Administration (1990-1991) on
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
VOX Research-based policy analysis and commentary from leading economists
70
leave from Columbia University Business School where he was Associate Professor
He did his PhD in economics at MIT with Paul Krugman He was visiting professor at
MIT in 200203 and has taught at universities in Italy Germany and Norway He has
also worked as consultant for the numerous governments the European Commission
OECD World Bank EFTA and USAID The author of numerous books and articles his
research interests include international trade globalisation regionalism and European
integration He is a CEPR Research Fellow
Simon J Evenett is Professor of International Trade and Economic Development at
the University of St Gallen Switzerland and Co-Director of the CEPR Programme
in International Trade and Regional Economics Evenett taught previously at Oxford
and Rutgers University and served twice as a World Bank official He was a non-
resident Senior Fellow of the Brookings Institution in Washington He is Member of the
High Level Group on Globalisation established by the French Trade Minister Christine
LaGarde Member of the Warwick Commission on the Future of the Multilateral Trading
System After Doha and was Member of the the Zedillo Committee on the Global
Trade and Financial Architecture In addition to his research into the determinants
of international commercial flows he is particularly interested in the relationships
between international trade policy national competition law and policy and economic
development He obtained his PhD in Economics from Yale University
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-
Centre for Economic Policy Research
77 Bastwick Street London EC1V 3PZTel +44 (0)20 7183 8801 Fax +44 (0)20 7183 8820 Email ceprceprorg wwwceprorg
The Doha Round confronts world leaders with a dilemma Concluding the Round this year is
impossible but there is strong opposition to terminating the Round There is also strong opposition
to suspending the Round as suspension is widely seen as a roundabout means of killing it
This VoxEU eBook aims to inform options for resolving the dilemma by gathering the views of some
of the worldrsquos most experienced Doha experts Contributors include former US Trade Representative
Susan Schwab Indiarsquos former WTO Ambassador Ujal Singh Bhatia Chinarsquos former WTO Ambassador
Zenyu Sun Canadarsquos former WTO Ambassador John Weekes and Hong Kongrsquos former WTO
Ambassador Stuart Harbinson ndash all of whom spent years at the ldquocutting facerdquo of Doha negotiations
They identify the 3 ways past the crisis
bull Road 1 Declare failure and call for a period of reflection
bull Road 2 Buy time by suspending the Round or
bull Road 3 Think creatively about work-around solutions that avoid acrimony and lock in some
of the progress to date
The contributors disagree on the best way forward but all believe that Road 3 is the one worth
trying first
- Foreword
- The Doha dilemma An introduction to the issues and possible solutions
-
- Richard Baldwin and Simon Evenett
-
- There is no Plan B ndash only Plan A Towards completing Doha
-
- Mari Pangestu
-
- Acknowledge Doharsquos demise and move on to save the WTO
-
- Susan Schwab
-
- Next Steps Getting past the Doha Round crisis
-
- Ujal Singh Bhatia
-
- Next Steps Is an early harvest still possible
-
- Zhenyu Sun
-
- Getting past the Doha Round crisis Moving forward in the WTO
-
- John Weekes
-
- The good ship Doha Salvage-and-abandon-ship or repair-and-wait
-
- Stuart Harbinson
-
- Keeping the WTO on track A Doha down payment plus more
-
- Richard Baldwin and Simon Evenett
-