Doha: Unbalanced acts
global markets. The Bhagwati-Suther-
In seeking to balance the interests of the developed and developing countries,
two recent proposals by WTO members evade the development objective
TRADE
MATTERS
T S VISHWANATH
fter declaring their intent to
A complete the Doha Round of
the World Trade Organisa-
tion this year, member countries have
been intensifying their participation
at Geneva for the last few weeks.
The growing intensity of the ne-
gotiations is evident with Mexico
tabling a proposal to take the Round
Mexican proposal and the Bhagwati-
forward as also with the release of
an interim report by a group co-
chaired by Jagdish Bhagwati and Pe-
ter Sutherland that provides sug-
gestions for completing the Round
this year. Interestingly, both the re-
port and the Mexican proposal seem
to be missing the core objective of
development that is central to the
Doha Round.
The Bhagwati-Sutherland re-
port, which was sponsored by Ger-
many, UK, Indonesia and Turkey,
is comprehensive but it does not re-
flect a position that can be accept-
able to developing countries like
India. One area of concern for in-
nate tariffs in any sector. Instead, the
dustry in India in the Mexican pro-
posal and the Bhagwati-Sutherland
report is the call for pursuing sec-
toral negotiations in the industri-
al goods pillar.
The sectoral negotiations have
been central to the US and the Eu-
rpean Union demand on moving
forward in the negotiations on in-
dustrial goods. However, countries
like India have been opposed to any
sectoral negotiations, which, at pres-
ent, is a voluntary initiative since
that would take away the devel-
opment dimension of the Round.
The Mexican proposal states that
member countries should identify at
least two “sectoral” liberalisation ini-
tiatives, among the many that have
been tabled for sectors such as for-
est products, toys, chemicals, tex-
tiles and clothing, and auto parts.
On agriculture, the Bhagwati-
Sutherland report does not seek to
put any extra pressure on the de-
veloped world to make any substantial
proposal beyond what is already
on the table. The Mexican proposal,
however, calls for capping trade-dis-
torting domestic subsidies by devel-
oped countries, which is an impor-
tant first step if the least developed
and developing countries are to
achieve any meaningful access in
land report needs to look at how some
real market access can be provid-
ed to the poor countries for if to be
taken seriously by all negotiators.
Since agriculture and industri-
al goods are the two key areas that
are being negotiated seriously at
present, it is important to note that
neither the Mexican proposal nor
the report puts any substantial pres-
sure on the developed countries to
open their markets beyond what is
already on the table. On the other
hand, there would be a lot that the
developing countries will have to
bring on the table if the non-agri-
cultural market access (NAMA) pro-
posals as suggested are to be tak-
en seriously. Interestingly, the US is
reportedly not in favour of the Mex-
ican proposal since it calls for cap-
ping agricultural subsidies, which it
does not support.
From a developing country per-
spective, the problem with both the
Sutherland report is that they seek to
balance the interests of the developed
and the developing countries. This
goes against the Doha Round’s core
objective of providing the poorer coun-
tries higher market openings in the
developed country markets to bal-
ance the inequity that exists in glob-
al trade today.
For the negotiations to go ahead,
it is important for countries to keep
a few specific principles in mind.
To begin with, there has to be real
market access for the least developed
and developing countries in global
agricultural trade. This can be
achieved only if the sensitive list of
products for the developed countries
is kept at the minimum and there are
some real cuts and capping of sub-
sidies that will contain the current
distortion in world agricultural trade.
Second, on industrial goods, de-
veloping and least developed coun-
tries should not be forced to elimi-
focus has to shift in seeking sub-
stantial cuts in bound tariffs by some
large developing countries which is
matched by equally substantial cuts
by the developed countries.
Even as the Bhagwati-Sutherland
report and the Mexican proposal seek
to balance ambition with pragma-
tism, they fail to deliver on the need
to put forward a solution that will
meet the development objective and,
at the same time, provide market ac-
cess opportunities for member coun-
tries. Hopefully, the final report from
the Bhagwati and Sutherland group
will bring to the table more substantial
suggestions to conclude the Round
in 2011. The Mexican proposal, too,
will have to be changed substan-
tially to incorporate the positions tak-
en by developing countries if it has
to be taken seriously.
The author is principal adviser,
APJ-SLG Law Offices