Last hope for Doha Round not becoming non Round
June 14, 2011
A huge measure of optimism, yes even unreality, is required to allow any hope that the goal of successfully concluding the Doha Round of trade negotiations will be achieved by this year’s end. At earlier times in the past ten years that these negotiations have been conducted under auspices of the World Trade Organization such failure would have been unthinkable. But as the years have passed with little or no progress at all evident, maintaining positive expectations had become less and less reasonable. Now, with little more than six months remaining for the deadline set by the political leaders of the nations making up the W.T.O., it seems not just likely, but inevitable, that Doha Round negotiations will simply run out. That will happen without accomplishing anything to liberalize trade in agricultural commodities or in non-agricultural products that had become the final stumbling block.
In contemplating such a disastrous result, it is unnecessary to look further than the choice of the phrase “non-Round” to denote that possibility, by Pascal Lamy, director-general of the W.T.O. and an unrelenting advocate of the importance of the Doha Round succeeding. With increasing fervor, Mr. Lamy has warned about the terrible consequences of failure. He has emphasized “the costs of the non-Round to the world economy as well as to the development prospects of members, in particular the smaller and least developed, which are dependent on an improved set of global trade rules.” He has further stressed the need to understand “the consequences of the non-Round to the multilateral trading system which we have so patiently built over the last 70 years.”
As a constant and earnest believer in liberalizing trade as a way to improve the functioning of the world economy, this page considers what seems a nearly inevitable failure to be unacceptable. It has been particularly disappointing that the Obama administration has refrained from pushing for resolution of the many disagreements among W.T.O. negotiators that would allow the Round to be completed successfully. Although fingers may be pointed at a number of intransigent nations in regard to accepting expanded market access, it is the United States that still has the power to provide leadership. It has not done that in the way that could be hoped, held back by the fierce politics affecting economic decisions in America.
Both agricultural and non-agricultural issues center on the degree to which some of the newly-prospering developing nations are willing to accept trade liberalization. This has stood stubbornly in the way of broad-scale accords. Lack of progress on any number of specific sectors related to market access, as well as disagreements on many technical matters stand as high, if not insurmountable, barriers to the conclusion that has long been dreamed of for the Doha Round.
When it comes to grain-based foods, this disastrous non-Round may seem far removed from companies and executives doing business defined by boundaries far narrower than those with an international scope. That is doubly so when products like bread are marketed within a relatively limited region seemingly unaffected by international trade. But such a constricted perception overlooks the way international trade directly affects many, if not all, of the food industry’s ingredient costs as well as much of its capital requirements. Liberalizing trade is the surest way to open markets to gain the benefits from transparency as well as the global marketplace. Many of the surprises faced by grain-based foods in the past year would have been different if the new trade rules envisioned by the original Doha Round negotiations had been in place. Export embargoes on wheat, which played such a powerful role in skyrocketing wheat prices, would have been limited, if not disallowed, by the new trade rules. Yes, it is late in this 10-year process, but the potential rewards for success are so great that it is unthinkable not to work to attain it.