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WTO Doha Round On Brink Of Failure

by Mike Godfrey, for, Washington

19 April 2007

Director-General Pascal Lamy told the IMF-World Bank International Monetary and Financial Committee in Washington last week that if the situation in the Doha Round trade negotiations does not change soon “governments will be forced to confront the unpleasant reality of failure”.

"The Doha Round is entering into a decisive moment," said the Director-General. "If we are to conclude it by the end of 2007, as pledged by a number of players in Delhi this week, we will have to see tangible progress over the coming weeks in Geneva. Success is entirely within reach, provided all WTO members are ready to make a contribution."

Mr Lamy emphasized the importance of the WTO's 'Aid For Trade' program in laying down the foundations for a successful outcome to the Doha Round. "Many developing countries have only experienced “virtual” gains from previous multilateral Rounds," he said, "in part because they lack the capacity to trade effectively. And this had made some reluctant to even consider further trade opening in the WTO Doha Round. Though Aid for Trade is not part of this Round — the so-called “Single Undertaking” — it will be critical to maximizing a successful outcome for many countries."

However, said Mr Lamy, the decision by WTO Members in February to resume the Doha trade negotiations across the board has not yet led to the breakthrough needed in order to bring the Round to a successful conclusion by the end of this year.

"A breakthrough in the negotiations in the next few months would send a much needed message of confidence," he told the assembled IMF and World Bank officials. "We are not attempting to do the impossible. Success is entirely within reach. The challenge is less technical, than political. It is about leadership, about compromise, about countries recognizing their common interest in success and the collective costs of failure. As in other Rounds, US-EU leadership is indispensable. Unlike previous Rounds, leadership from key emerging players and ownership by developing countries is now just as important."

Last week's meeting in New Delhi was between the US, the EU, India and Brazil, and could be the prelude to a meeting of all 150 WTO members. India and Brazil, with China in the wings (a group known as BRIC) have led the developing nations in demanding more agricultural market access than the US and the EU are prepared to give; and those two have their own issues over tariff cuts and subsidies.

"These talks are timely and important," saus EU Trade Commissioner Peter Mandelson about last week's meeting. "If we fail, Doha's prospects for this year will be lost."

Success now seems hardly possible given that the US President's 'fast-track' trade treaty authority will expire in June, and a Democratic Congress seems likely to demand an unacceptably high price for its renewal. And French politicians facing a presidential election in May are almost sure to veto any further agricultural market opening.

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