Shawn Donnan, World Trade Editor
The US has for the first time publicly called for the Doha Round of global trade negotiations to be abandoned, arguing that after almost a decade and a half of fruitless discussions, developing and developed nations alike needed to recognise they were going nowhere and that it was time to try new approaches.
Writing in the Financial Times ahead of the World Trade Organisation’s biennial ministerial meeting in Nairobi this week, Mike Froman, the US trade representative, said that 14 years after it was launched the Doha Round “simply has not delivered”.
“We need to write a new chapter for the [WTO] that reflects today’s economic realities,” Mr Froman said. “It is time for the world to free itself of the strictures of Doha.”
The US call sets the stage for an acrimonious showdown in Nairobi this week over the future of the Doha Round and the WTO itself that is likely to overshadow a push for a smaller agreement on a narrow range of agriculture and development issues.
It also highlights what has become an uncomfortable paradox in the world of trade negotiations. While negotiators at the WTO have in recent years stepped up their efforts to revive the Doha Round, the belief of most people in the global business community is that it died a painful and final death in 2008 amid a stalemate over agriculture between developed and developing nations.
The US and others have also turned their focus in recent years to new regional negotiations such as the recently concluded Trans-Pacific Partnership, which included the US, Japan and 10 other economies.
Still, many in the developing world continue to cling to the Doha negotiations.
Countries such as Brazil, China and India and many of the WTO’s African members insist the round needs to continue, because the Doha Development Agenda, as it is formally known, includes issues of vital importance to poorer countries, such as efforts to rein in agricultural subsidies in rich economies like the US and EU.
“It has been a long time. I know people are tired. But it is still very important to conclude the round from an African perspective,” Ellen Johnson Sirleaf, the president of Liberia, which is poised to become a member of the WTO in Nairobi, told the Financial Times.
In the lead up to this week’s gathering, other big advanced economies such the EU and Japan have sided with the US in its push for a new approach to negotiations after the Nairobi meeting and a shift to more focused discussions on specific sectors rather than a monolithic global agreement.
Although those advanced economies and other supporters such as Australia and New Zealand, represent a majority of the global economy and world trade, they remain a minority in the 160-member WTO, in which decisions are made by consensus.
Not all advanced economies are as radical in their approach as the US. “It is almost paranoia. [The US] really want to, in a way, erase Doha from the hard disk of the WTO,” said one senior European trade official.
But for the US the push for change also reflects what it sees as rising competition with China, which overtook the US as the world’s largest trading nation in 2014.
Beyond the frustration of President Barack Obama and others with the stasis in the WTO, many in Washington also see the Doha rules of engagement as outdated, particularly with regard to China. Beijing, US officials argue, now has the biggest farm subsidy program in the world. And yet under Doha it is considered a developing economy and so would not have to cut any subsidies in the event of a deal even as the EU and US would be forced into slashing their programmes.
In his FT article, Mr Froman argues that the world has become very different since the Doha Round was launched.
“Getting it unstuck begins with acknowledging that Doha was designed in a different era, for a different era, and much has changed since,” Mr Froman says.
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