Walks In The WTO Woods - But Whither?

by Jeremy Hetherington-Gore, Tax-News.com, London

20 October 2008

I come to bury Caesar, not to praise him, said Mark Anthony, going on to do nothing but praise Caesar. And so it is with the Doha Round, disgracefully buried by a rabble of feeble Trade Ministers who have done nothing since but wring their hands in hypocritical repentance.

Marathon runner Pascal Lamy, Director General of the WTO, continues to orchestrate a rearguard action which may yet save the Round, although its chances seem dimmer by the hour as the shades of recession lengthen. Protectionism walks hand in hand with economic adversity.

A determinedly upbeat message from the WTO last week insisted that progress is still being made. Consultations nicknamed “walks in the woods” have allowed negotiators to explore ideas and understand each others’ concerns on six deadlocked issues, even though they have not yet moved away from their positions, an agriculture negotiations meeting involving the full membership heard on October 15.

Ambassador Crawford Falconer, chairperson of the agriculture negotiations, told WTO members of a series of technical consultations on issues such as tariff quota creation, tariff simplification, “Green Box” domestic support provisions, sensitive products, the “special safeguard mechanism” for developing countries, and the Paris methodology.

If the devil is in the detail, then a battalion of them has been let loose in the notorious Room E at WTO headquarters, where fractious delegations are often sequestered to resolve their differences.

The Doha Round final negotiations collapsed at the end of July, when Pascal Lamy announced that ministers attending trade talks in Geneva had failed in their efforts to agree on blueprint agreements in agriculture and industrial products.

He told a press conference after speaking to members that out of a to-do list of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th — the special safeguard mechanism for developing countries.

According to Mr Lamy, some countries wanted a high “trigger” (a large import surge needed to trigger the tariff increase) in order to avoid the safeguard being triggered by normal trade growth, while others wanted a lower trigger so that the safeguard could be easier to use and more useful.

“After more than 36 hours trying to find bridges between these two positions, today it became clear that the differences were irreconcilable. The remaining issues, including cotton, were not even negotiated,” he explained.

“It is no use beating around the bush. This meeting has collapsed. Members have not been able to bridge their differences,” he told reporters. “What members have let slip through their fingers is a package worth more than USD130bn in tariff saving annually by the end of the implementation period, with USD35bn saving in agriculture and USD95bn in industrial goods."

“For my part I will continue to serve this organization and its members as best as I can and devote my efforts to a fairer trading system.”

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