NAIROBI, Kenya — In a considerable victory for the United States, it can argue that the Doha round is essentially dead.
The World Trade Organization will potentially no longer be bound to the agenda of the long-stalled 14-year negotiations after a much-anticipated five-day meeting here failed to produce the needed results. That flexibility alone is reason to celebrate for many U.S. businesses who feel the Doha agenda — launched in 2001 as an ambitious effort to make globalization more inclusive and help the world's poor by slashing tariffs and agricultural subsidies — has stymied agreement on anything else at the global trade body.
“As WTO members start work next year, they will be freed to consider new approaches to pressing unresolved issues and begin evaluating new issues for the organization to consider," U.S. Trade Representative Michael Froman declared at the conclusion of the meeting.
But many developing countries fear decoupling the negotiating agenda from Doha would mean development issues that matter deeply to them fall by the wayside. The U.S. and other developed economies, like the European Union, have said that the unresolved issues covered by Doha will still be a priority, but developing countries worry that without the framework of the negotiating round, they will have to take on more severe commitments.
In Nairobi, WTO members had aimed to agree on a path forward for the global trade body following their meeting, but entrenched positions on both sides proved intractable. After an extensive full day of negotiations between the five major players in the global trade body — the United States, European Union, India, Brazil and China — WTO members met and agreed to a declaration on Saturday that acknowledged many wanted to stick to the Doha framework while others didn’t, essentially allowing the U.S. to argue the Doha mandate no longer exists.
They agreed instead to "work to find ways to advance negotiations" and on Director-General Roberto Azevedo to report regularly on progress.
Azevedo, in a press conference following the decision, emphasized that members “all want a multilateral trading system that is more responsive, that is more agile, and that is precisely the test we have in front of us.” But he acknowledged that it’s now unclear what exactly the WTO will hold negotiations about.
Indian Commerce Minister Nirmala Sitharaman, an outspoken proponent of the Doha agenda, was among those discouraged by the decision. She noted that China, India, the Africa group, and the G-33 group of agricultural importers had all wanted the round to continue.
“I am absolutely disappointed that’s not happened with a sense of the usual consensus that happens within the WTO,” she said in a speech informally objecting to the ministerial declaration.
“Mentioning about the division here [in the declaration] became inevitable, and all of us here are sitting and going along, but on behalf of that large group I would still say that reaffirmation is the mandate that all of us came here with,” Sitharaman said.
Some victories for agriculture producers and poorer countries
But there were other developments in Nairobi for the WTO. The organization pulled off agreements that benefit agriculture producers and the world’s poorest countries, and that fact means volumes more than the content of those agreements themselves.
Like most trade negotiations that end in a deal, officials toiled around the clock, working out complicated and politically sensitive issues, including whether developing, ag-importing countries, like India, should be given more flexibility to increase tariffs or prices in the face of agricultural import surges, known as a “special safeguard mechanism,” and how long members should be given to phase out subsidies handed out to boost exports.
The WTO inked deals that would ban agricultural export subsidies immediately upon adoption for developed countries, in three years for developing countries and in eight years for marketing and internal transportation subsidies. The U.S. fought hard against a long time period for the latter, for fear countries like India and Brazil could use them as cover for a range of export subsidies.
On the developed economy commitment, Canada, Norway, Switzerland and the European Union all secured exceptions that would accommodate political and policy constraints.
The agriculture deal also put more disciplines on export credit financing, though those provisions are written largely in line with restrictions already placed on U.S. agricultural export credits administered under the GSM-102 program, albeit without the fee structure.
The deal's sections on ag export subsidies and export financing, as well as a section on food aid, hewed closely to what the U.S. wanted – namely, a quick phase out of ag export subsidies, and disciplines on export credits and food aid that did not affect its ability to keep doing what it’s doing. For its part, the U.S. agreed to use independent agents to verify that its food aid practices, from all agencies, do not disrupt local markets.
India managed to secure a decision that called for work on the mechanism that would allow it to shield against ag imports over the objections of exporters like the U.S. and Brazil. Brasilia fought particularly hard in the so-called “G5” meetings against such a mechanism.
The ink wasn’t even dry on that part of the deal, though, before major players began disagreeing about what exactly the agreement meant.
In the U.S. view, under the final deal any discussions about negotiations on that type of procedure are explicitly tied to corresponding market access negotiations, while India's Sitharaman pointed to text that reaffirmed developing countries’ right to ramp up tariffs or prices in the face of too many imports, when asked if it was tied to market access.
The Indian minister also convinced WTO members to reiterate that existing food stockholding would be shielded from dispute settlement until the issue is definitively resolved. The agreement binds the WTO is to work toward a decision by the 2017 ministerial.
Sitharaman argued to journalists covering the event, after consensus was reached, that while it was disappointing the Doha mandate had not been reaffirmed, she had worked to preserve the parts of Doha that were of most importance to her country.
“We have ensured that the Doha references are brought in everywhere where our decisions are,” she said, citing the special safeguard mechanism among other issues. “What was not on the cards going into Nairobi, I brought on the table. … They did not want it. I ensured that it was brought on the agenda and a decision was taken.”
The slog to agreement
The negotiating successes achieved in Nairobi came with no small effort. Ministers, negotiators and journalists alike frequented the Safari Café in the Kenyatta International Conference Center all day and all night to consume coffee and long-overdue meals. Diplomats huddled in rooms in the Intercontinental Hotel, where delegations like the U.S. and EU were staying. And ministers publicly gave speeches that were alternatively pleading, frustrated and determined.
“We in Indonesia believe it is imperative that we come out of Nairobi this week and ... go home with a small package and in our opinion even, if necessary, an ultra-small package, but not leave Nairobi with a zero-result outcome,” Indonesian Trade Minister Tom Lembong said in a speech during the plenary session. “Less balance would be okay. What would not be okay would be no common ground, no agreement.”
But by early Saturday morning, the contours of a deal began to emerge that would satisfy each of the five major players.
Notably, if the WTO moves past the Doha framework, it would give developed economies, and some developing members, more flexibility to push for “new issues,” which is mainly code for topics that were deemed unworkable a decade ago, like investment, state-owned enterprises and electronic commerce.
But European Union Trade Commissioner Cecilia Malmström acknowledged to reporters earlier in the week that some of these issues would be difficult to start talks on right away.
“Procurement, investment indeed are very difficult questions and I think when we talk about the post-Nairobi agenda, maybe these two won’t be the immediate candidates because it’s very difficult to talk about this,” she said.
Additionally, the ministerial declaration notes that no new issues can be brought to the table without a consensus. Non-governmental organizations, who arrived in Nairobi from around the globe, had protested the push to allow space for these types of issues to be put back on the WTO docket, with fears that it would further spread the types of trade rules they despise in deals like the Trans-Pacific Partnership.
“India, Africa and the developing world have lost out on the 15 years of negotiations by killing the Doha Round in Nairobi,” said Biraj Patnaik with Indian NGO Right to Food Campaign in a statement. “Doha was not just a set of issues. It was a set of negotiating principles and a framework for negotiations. Without the Doha Framework and an explicit re-affirmation of the Doha Development Agenda, developing countries will never be in a position again in the WTO to negotiate the development agenda to their benefit successfully.”
But Anabel Gonzalez, World Bank senior director for trade and competitiveness and Costa Rica’s former trade minister, said the WTO needs to change to have successful negotiations.
“The world has changed in many ways since the Doha round was launched, and global value chains, regional value chains are more prevalent today than they were before,” she said in an interview. “The role of emerging economies is very different today than it was in 2001. So, in many ways there have been important changes, and arguably it is important for the system to sort of digest those changes and decide what needs to change in the system in order to move forward.”
Evan Ottenfeld | Legislative Assistant and Scheduler
Public Citizen's Global Trade Watch
215 Pennsylvania Ave SE, Washington, DC 20003
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