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Doha Trade Round: Optimism Emerges on Possible Conclusion of the Round By end 2006

By Mr. Cornelius T. Mwalwanda
Principal Advisor
ECA Geneva Interregional Advisory Services

Renewed optimism has recently emerged that the Doha Trade Round launched in Doha, Qatar in December 2001 could be successfully concluded by the end of 2006, depending on the extent to which major players in the World Trade Organization (WTO) are prepared to accommodate each other. Recent statements emanating from Representatives of major trading countries, as well as the Director General of the WTO, Mr. Pascal Lamy, indicate a renewed sense of urgency to meet the end of April deadline for agreement on modalities for agriculture and non-agricultural market access (NAMA), otherwise there is real danger that the Doha Round could be derailed beyond salvage. Trade negotiators have realized that a deal needed to be struck, ahead of a string of politically sensitive national elections in critical countries, including the United States, Brazil and Mexico in the second part of the year. Also pressing the agenda is a likely lapse in President George Bush's Fast Track Trade Negotiating Authority, which is set to expire in July 2007.

Basis of Renewed Optimism

The recent optimism is reflected in statements by major players in the WTO, including its Director General Mr. Pascal Lamy, who recently said that: "the conditions are in place for the most contentious issues of the Doha Round to be wrapped up in the first half of the year, paving the way for final accord before the end of the year". Mr. Lamy stated that "Europe must make progress on its agricultural tariffs, the United States on the reduction of its domestic subsidies to farmers, and the G20 (a group of emerging nations) on the customs rights for industrial goods and services".

The main sticking points in the Doha Round has remained high agricultural tariffs in the European Union and farm subsidies in the United States; and access to the industrial and service sectors of emerging economies, like Brazil and India. The European Union has in the past refused to make further concessions on farm tariffs until all, but the poorest developing countries, agree to open their goods and services markets to more of its imports. Mr. Lamy criticized France for its "excessively defensive" position on farm trade, urging "The French position is excessively defensive on agriculture and that France has a trade surplus with the United States, so I don't understand why it takes such an ultra-defensive position".

Further optimism on the outcome of the Doha Round emanates from a statement made by Mr. Peter Mandelson, the EU Trade Commissioner, after his meeting in Washington D.C. with Mr. Rob Portman, the US Trade Representative. Mr. Mandelson stated the European Union and the United States could modify their agricultural stances in world trade talks, if developing countries make better offers to open their services and industrial good markets. He noted that "If we really see a commitment by others, including the emerging economies.... then both....the European Union and the United States will be in a position to look again at our offers in agriculture". This optimism is also shared by some developing countries. The Ambassador of Brazil to the WTO stated recently that: "I think it is feasible to have substantive results by April. How much.... to cut in the average tariff in agriculture is not too difficult to negotiate. The central numbers are known, the ranges are there".

Challenges for African Countries

The challenges facing African countries are three fold. Firstly, how to input into the small-group negotiations, such as the G-6, where much of the negotiations appear to be taking place. Secondly, how to ensure that their interests are taken into account in these negotiations, and finally, how to ensure that the outcome of Doha will still yield development dimensions, as stated in the original mandate of Doha. African countries are making concerted efforts to remain engaged in these negotiations, but with negotiations taking place in smaller selective groups, the process is becoming more difficult.

The WTO African Group in Geneva continues to regularly hold meetings and consultations with other groups, in order to advance Africa's interest and concerns in this trade round. Whether the Doha Round can be successfully concluded at the end of 2006 remains an uncertainty.

As we move to the modalities stage, what is important for African countries is not that some form of agreement should be reached on modalities for agriculture and non-agricultural market access (NAMA), but even more important is what the formulae and the associated numbers will mean in terms of market access for products of African countries in developed countries; what they will mean in terms of preference erosion; and what they will mean in terms of special and differential treatment (S&D) and policy space needed for them to pursue development goals. Secondly, there is need to once more bring development at the core of these negotiations.