The Doha Round

The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules in order to expand global economic growth, development, and opportunity.The Round was launched in Doha, Qatar, in November 2001, at the WTO’s Fourth WTO Ministerial Conference

As of 2008, talks have stalled over a divide on major issues, such as agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies.The most significant differences are between developed nations led by the European Union (EU), the United States (USA), and Japan and the major developing countries led and represented mainly by Brazil, China, India, South Korea, and South Africa. There is also considerable contention against and between the EU and the USA over their maintenance of agricultural subsidies—seen to operate effectively as trade barriers.

The negotiations focus on the following areas:

Agriculture


Industrial goods market access


Services


Trade facilitation


WTO rules (i.e., trade remedies, fish subsidies, and regional trade agreements)


Development

Issues

Agriculture

Agriculture has become the most important and controversial issue. Agriculture is particularly important for developing countries, because around 75% of the population in developing countries live in rural areas, and the vast majority are dependent on agriculture for their livelihoods. The first proposal in Qatar, in 2001, called for the end agreement to commit to substantial improvements in market access; reductions (and ultimate elimination) of all forms of export subsidies; and substantial reductions in trade-distorting support.

The dispute over agriculture hinges on the active role the United States and the EU take to support their agricultural sectors with subsidies and tariffs. Last fall, the United States offered to cut its agricultural subsidies by an average of more than 50 percent, but conditioned the offer on major market-access proposals from the EU and G-20 states. The EU has offered to cut its tariffs by an average of 40 percent, but it also wants to identify up to 160 of its agricultural products as “sensitive” and preserve tariff protections for them. The Economist says 17 and 54 are the two “magic numbers” to meet if renewed talks this spring are to succeed: the U.S. will need to limit its farm subsidies to $17 billion (its lowest offer thus far is $22 billion), and EU countries must make cuts in their agricultural tariffs in the vicinity of 54 percent. The EU and United States are calling on developing nations like India and Brazil to improve their offer to open up their markets to industrial goods. But an open embrace from the developing world is highly unlikely if the United States refuses to give up its significant farm subsidies.

Access to patented medicines

A major topic at the Doha ministerial regarded the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The issue involves the balance of interests between the pharmaceutical companies in developed countries that held patents on medicines and the public health needs in developing countries. Before the Doha meeting, the United States claimed that the current language in TRIPS was flexible enough to address health emergencies, but other countries insisted on new language.

Special and differential treatment

The WTO Agreements contain special provisions which give developing countries special rights and which give developed countries the possibility to treat developing countries more favorably than other WTO Members. 

The special provisions include:

• longer time periods for implementing Agreements and commitments,

• measures to increase trading opportunities for these countries,

• provisions requiring all WTO members to safeguard the trade interests of developing countries,

• support to help developing countries build the infrastructure for WTO work, handle disputes, and implement technical standards, and

• provisions related to Least-Developed country (LDC) Members.

The negotiations have been split along a developing-country/developed-country divide. Developing countries wanted to negotiate on changes to S&D provisions, keep proposals together in the Committee on Trade and Development, and set shorter deadlines. Developed countries wanted to study S&D provisions, send some proposals to negotiating groups, and leave deadlines open. Developing countries claimed that the developed countries were not negotiating in good faith, while developed countries argued that the developing countries were unreasonable in their proposals. 

Implementation issues

Developing countries claim that they have had problems with the implementation of the agreements reached in the earlier Uruguay Round because of limited capacity or lack of technical assistance. They also claim that they have not realized certain benefits that they expected from the Round, such as increased access for their textiles and apparel in developed-country markets.

Why is the Doha Round of Trade Talks So Important?

 The Doha round of trade talks would have reduced subsidies for developed countries’ agricultural industries, thus allowing developing countries to export a product that they are already good at producing - food. In return, the developing countries would open up their market to services, particularly banking, which would provide new markets to the developed countries service industries(developed countries want to increase their access to non-agricultural manufacturing and service sectors in robust developing countries like China, India, and Brazil.), and help modernize these markets for the developing countries. But the agribusiness lobbies in the U.S. and Europe put political pressure on their legislatures, and effectively ended this round of negotiations. The result has been an increase of bilateral agreements.

What happens if Doha fails?

It can pose problems to businesses worried about a “spaghetti bowl” [when multiple bilateral agreements overlap, causing complex and un-integrated regulatory requirements].Some people opine that the Doha round's failure would be a setback to global poverty-reduction efforts such as the UN Millennium Development goals.