GENEVA — The Doha round of global trade liberalization talks are at a crossroads, as ministers and top negotiators from 149 countries prepare the groundwork for the endgame trade-offs needed to reach a successful deal by the end of this year.
An agreement would help lower barriers to goods and services worth $11 trillion a year, including more than $453 billion a year in textiles and apparel, according to 2004 World Trade Organization figures.
Pascal Lamy, director-general of the Geneva-based WTO, which is sponsoring the talks, said 2006 “must be the year in which we conclude the round for the benefit of all participants.” Lamy said the Hong Kong Ministerial held in December “provided a road map for the final stages of the negotiations.”
At Hong Kong, the WTO’s 149 members agreed to scrap agricultural export subsidies by 2013, while cotton-rich countries agreed to eliminate all forms of export subsidies for cotton this year.
They also agreed to provide duty-free and quota-free market access for products coming from the 50 Least Developed Countries, which combined account for less then 1 percent of world trade, on 97 percent of products by 2008 or no later than the start of the implementation period.
Terms to broker a deal on trade facilitation that will simplify customs clearance procedures were also agreed upon in Hong Kong. But those talks failed to craft a blueprint for agriculture and nonagricultural market access. Instead, members said those models for agriculture and NAMA, including numerical targets, dates and formulas for slashing tariffs and subsidies, would be established by the end of April.
In a bid to expedite the process, during a meeting late last month in Davos, Switzerland, ministers from about 20 countries, including U.S. Trade Representative Rob Portman, reaffirmed the Hong Kong road map and agreed to a set of new timelines.
“There’s a sea change in attitude…by appearance, people are ready to deal,” said a senior trade official who requested anonymity.
“We see a flurry about process, but have yet to come to grips with substance,” said Ujal Singh Bhatia, India’s WTO ambassador. “But, hopefully soon…we can tackle this honestly.”
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The chief U.S. agriculture negotiator, Richard Crowder, earlier this month admitted that the end of April “is an aggressive timetable,” but added, “It is needed to conclude the round by the end of 2006, before the expiration of the President’s trade promotion authority in 2007.”
“Fast track [as TPA used to be known] is already in people’s minds,” said an ambassador from a developing country who did not want his name used. “Everyone is sensitive to that and to the changed mood in Congress, which is not most favorable to trade.”
To prepare the groundwork for the linkages to the possible trade-offs, ministers at Davos agreed that all key issues, in particular agriculture and NAMA, need to move simultaneously. Until now, many developing countries have held back from contemplating the ambitious demands of the European Union and the U.S. on industrial tariffs until they see their demands on agriculture met first.
The hard-line stance of the EU on market access for agricultural products has been so far the biggest barrier to a breakthrough. Brussels linked further movement, however, on progress by major developing countries on NAMA and services.
“After Hong Kong and the mini ministerial in Davos, people are looking to close the round very much this year,” said Guillermo Valles Galmes, Uruguay’s WTO ambassador.
Munir Ahmad, executive director of the 26-member International Textiles & Clothing Bureau, the umbrella body for developing country exporters, said, “I think it will be finished this year. The issues are ripe and the only thing required is the political will to do it. People can see the shape of a package.”
Given the poor track record of WTO members in the Doha talks in meeting self-imposed deadlines, some negotiators are skeptical that a positive outcome can be achieved by the end of April. Some feel it won’t come about until this summer.
There’s a feeling by other envoys that the round will end in 2006 and insist it’s in the hands of the EU and its stance on agriculture. Some fear many WTO members will opt for a lower level of ambition by accepting what Brussels puts on the table.
However, there are concerns by some envoys that among the major powers — with the exception of the U.S., which is pushing hard on both agriculture and NAMA — many are preparing for a minimum package or what is being called “Doha Light.”
Portman is adamant this is “not acceptable” for the U.S. and believes the round is a “once-in-a-generation opportunity to slash tariffs, distorting subsidies and increasing global growth.”
But, “No one wants to pay a big bill; the ambition is not there,” said a WTO ambassador from a developing country, speaking anonymously.
In preparation for the package deal, WTO trade diplomats said discussions are also under way on how to accommodate the concerns of poor countries that stand to lose existing market share from the
erosion of trade preferences in a deal to slash tariffs. Textiles and apparel are among the products some poor African and Caribbean countries are asking be exempted from normal formula cuts under NAMA. A diplomat tracking NAMA said this could be achieved by providing longer periods for the phase-in of the cuts, or an agreement to cut lower than those envisaged by the formula, or a mixture of the two.
A senior official from a major Asian textiles exporting power, who asked not to be named, said, “We’re sympathetic to the need for more flexibility on these products, but the cuts in tariff peaks and tariff escalation should not be minimized. We could consider longer implementation periods, and some need to be compensated for market loss. But these should not be across the board, but targeted.”
For competitive textile and apparel exporters such as Sri Lanka, a major outcome of NAMA should be to go after the high-tariff, rich countries.
“What we would like to see is the high tariff and tariff peaks in Sri Lanka’s exports of textiles and apparel sharply reduced,” said Gomi Senadhira, Sri Lanka’s WTO ambassador. “Not only do we pay higher tariffs, but we face discriminatory treatment in countries such as the U.S. and Canada. Because of [the African Growth & Opportunity Act] and other [free-trade agreement] benefits, [many of] our competitors get duty-free and quota-free access. So you have tariff peaks on one side and preferential arrangements to our competitors on the other.”