the wto doha round

7/29/2019 The WTO Doha Round

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The WTO Doha Round

This guide provides essential background on the Doha DevelopmentRound of the World Trade Organization (WTO). It is intended as an

ntroduction to the issues for a general development audience, but alsprovides a selection of further links and reading that might be ofnterest for a more specialized audience.

What is the Doha Round?

The World Trade Organization (WTO) was launched in 1995, and sinchen, five Ministerial conferences have been held. The Doha Ministerian 2001 was declared the Development Round, and was marked by a

ore concern: that the multilateral trading system should benefit theeveloping countries that constitute over three quarters of WTOmembers. The Doha declaration pledged to enable developing countro secure a share in the growth of world trade commensurate with theeds of their economic development through two key routes:

Improving market access to Northern markets for developingountries by reducing import tariffs that prevent increase prices andistort competitiveness

Phasing out domestic and export subsidies, that enable the over-production of goods at very low prices, often leading to the dumping ohese goods at prices that are cheaper than those of locally producedoods

The most strategic area identified for reform at Doha was agriculture,ollowed by non-agricultural market access (NAMA), trade in servicesGATS), developing country issues (Special and Differential

Treatment);aid for trade. Yet, in the intervening period, Northernountries have proved unwilling to open up their agricultural markets

without a commitment from developing countries to lower their ownbarriers in services and non-agricultural goods. Rich countries also wao limit the scope of Special and Differential Treatment Measures (SDT

measures that would soften the impact of tariff reductions for
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eveloping countries. Thus, the promise of Doha as a catalyst forevelopment has largely not been met.

The Doha Round and agriculture

Even though agricultural trade is marginal in Europe and the USA, theector is heavily subsidized and protected in both of these industrializrade giants. At the same time, most developing countries depend ongriculture as a provider of livelihoods. As a result, the poorest group eveloping countries in the Doha Development Round, the G90, is

pushing hard to make sure their interests are recognized. Manyountries have large and economically significant agricultural sectorsnd these are often fiercely protected internationally. However, in the

EU, agriculture contributes only 1.7% to the total value of Europeanncome. In the US, this figure is even lower, at around 1%. Despite themarginal economic value of agriculture, the sector is heavily subsidisend protected in both of these industrialised trade giants. The United

States has vowed that it wants to remove all trade barriers, but isubject to political pressure from such groups as cotton farmers, whore influential in states that are key to the republican vote.

Developing countries and agriculturen contrast to the Northern developed countries, the majority ofeveloping countries depend on agriculture as a provider of livelihood

As a result, the poorest group of developing countries in the DohaDevelopment Round, the G90, is pushing hard to make sure theirnterests are recognised, and that they are entitled to special andifferential treatment to strengthen their handicapped trading

positions. However, there is also a group of so-called advanced

eveloping countries, such as Brazil, that have large and efficientgricultural systems. This group is thus pushing for more liberalisation

n order to exploit their competitive advantages.n Agricultural negotiations in the Doha Development Round canenerally be divided into four core themes: market access, domesticupports, export competition, and development issues:


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Market access: this includes import tariff reductions, rules forspecial and sensitive products, and a safeguard mechanism

protecting developing countries from big dips in world prices or surgen imports which could threaten food security

Domestic supports : The subsidy payments to farmers, which thWTO has classifiednto 3 different coloured boxes, representing different levels of trade-istorting financial supports

Export competition : which include export subsidies, and food assues (such as the dumping of Northern agricultural surpluses ineveloping countries)

Development issues : recognising the reduced agricultural

apacity of many developing countries and thus the need for flexibilitnd special and differential treatment (SDT)

Doha and developing countries

WTO definitions of developing countries

Of 132 countries in the WTO, 103 are classified as developing or least

eveloped. This number is increasing year by year. There are no WTOefinitions of developed and developing countries so members makheir own decisions on their status. However, other members canhallenge the decision of a member to make use of provisions availabo developing countries.

Special and differential treatment

Special and Differential Treatment allows for developed countries to

reat developing countries more favourably than other WTO membersnd for flexibility in the rate at which developing countries are expecto liberalise.

Preferential trade agreements


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The most significant expression of SDT is non-reciprocal PreferentialTrade Agreements, which allow least developed countries to benefitrom lowered tariffs on certain products, to boost their access tonternational markets without the requirement of lowering their own

ariffs in return.One of the aims of Doha has been to erode these PTAs, since they areeen as distorting paths to multilateral trade liberalisation. The rations that the introduction of duty and quota free access for products froDCs will erase the necessity for PTAs. The erosion of the PTAs has

prompted much discussion. One key area of debate is the EU's plan toeplace its non-reciprocal PTAs with ACP countries with Economic

Partnership Agreements that would require the elimination of ACP

ariffs.

Aid for trade

To cushion the transition period, alternative forms of support, such asid for trade, have been proposed. Aid for trade is intended primarily evelop supply capacity in developing countries, enabling them to ha greater chance of holding their own in the global

GATT and GATS

The two acronyms, 'GATT' and 'GATS' are often confused. The GeneraAgreement on Tariffs and Trade (GATT) is the trade agreement agreen 1947 after the failure of the U.S. congress to ratify the InternationaTrade Organisation that had been proposed at Bretton Woods, alongwith the International Monetary Fund (IMF) and the World Bank. GATS

he General Agreement on Trade in Services, is the agreement withinhe WTO on trade in services. It became part of the WTO in 1995.

Export subsidies and domestic subsidies

t is important to distinguish between domestic subsidies and exportubsidies. The former are paid to farmers for producing agricultural
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products. The latter help farmers export their products. This may seemobvious, but the EU in particular often refers ambiguously to reductiot has made in subsidies, without specifying that this is not a referenco the market distorting domestic subsidies but to the less significant

export subsidies. Therefore the claims it makes are often not asramatic as they appear to be.

Percentages

t is important to put percentages and figures into context, as reportsan be misleading. For example, although the Doha Ministerial

Declaration obliges Developed Countries to provide duty and quota-frccess for 97% of Least Developed Country exports as of 2008, theemaining 3% reservation will account for 330 tariff lines. This could

mean depriving some countries of market access for all their keyproducts.

The Doha Development Round, as it has been known, was nicknamhat way to show that this round of trade negotiations were to favor

poor countries ability to develop and prosper from global trade, whilecknowledging the unequal nature of global trade, dominated by

ndustrialized countries, at the direct expense of the developing world

Media attention lacking

There was hardly a mention in many western mainstream media,ertainly not on prime time television news broadcasts, that such anmportant meeting was taking place. Only as the meetings ended withramatic collapse did the media appear to turn attention to this. Yet teadlines were more about the sensational bickering between the EUnd US as to who was to blame for the collapse.

WTO Meeting in Hong Kong, 2005
http://www.globalissues.org/TradeRelated/FreeTrade/HongKong.asphttp://www.globalissues.org/TradeRelated/FreeTrade/HongKong.asp


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December 2005 saw Hong Kong host the 4th World Trade OrganizatioWTO) Ministerial meeting. This meeting, one of the most important inhe world, was to discuss a number of trade-related issues, key foreveloping and developed nations, alike. This meeting continues from

he earlier Doha round where it was recognized that the globalrading system was unequal and unfair for most of the world and so th

meetings should place development at the fore. Thus this meeting isbeing billed as a Development Round. However, the concerns as peprevious years continued to include the lack of transparency andemocracy in the decision-making processes, and the power that theich nations have over the poor distorting trade in their favor. The

previous Ministerial meeting two years earlier collapsed as the

eveloping world took a strong stance and stood up to the rich nationYet, since then, the same kinds of issues have resurfaced as richations appear to have hardly moved on their countless promises,

pledges and obligations. As a result, and perhaps predictably, poorerountries were pressured to agree to a deal that did not really work inheir favor. Last updated Monday, December 26, 2005.

WTO Meeting in Cancun, Mexico, 2003

The 5th WTO Ministerial Conference in Cancun, Mexico was held in mSeptember, 2003. Issues similar to those raised in Doha were raisedgain, with the accompanying controversies. The talks collapsed

because rich countries refused to finish discussion on issues raised inprevious meetings. Instead, they wanted to talk about new issues.Poorer countries wanted to finish discussion on the previous issues

because it impacts them the most. While the talks failed, it was the fiime the developing world took a united stance against the richountries. Last updated Thursday, September 18, 2003.

WTO Meeting in Doha, Qatar, 2001
http://www.globalissues.org/TradeRelated/FreeTrade/Cancun.asphttp://www.globalissues.org/TradeRelated/FreeTrade/Doha.asphttp://www.globalissues.org/TradeRelated/FreeTrade/Cancun.asphttp://www.globalissues.org/TradeRelated/FreeTrade/Doha.asp


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The 4th WTO Ministerial Conference in Doha, Qatar was held inNovember 2001. It was to launch a new round of trade talks prioritizinhe development of poor countries and was dubbed the developmenound. But it was marred with controversy. Qatar was selected as the

venue due to its repressive laws about the right to protest.urthermore, both in the lead up to the meetings, and in the outcomeeveloping countries on the whole had actually been marginalized an

gnored, once again. Last updated Sunday, December 22, 2002.

World trade negotiations appear to be stalemated. Meeting in HongKong in December 2005, trade ministers from World Trade OrganizatWTO) member countries were unable to bridge major disagreements

the Doha Round negotiations, so called because they were launched Doha, Qatar, in2001. Why are these negotiations so difficult? Theanswers lie mainly in the developing world. A Changing World ofTrade.The global trade regime expanded during the past two decadto encompass most developing countries, including China, which wasoutside the capitalist trading system in earlier rounds of trade talks.Countries like India were less engaged in earlier rounds, reflectingeconomies that were largely closed at the time. Now, however, these

fast-growing countries have become major players in the globaleconomy and global trade regime. As they join global tradenegotiations, they bring their own offensive and defensive concerns.Some want to liberalize sectors in which they are competitive, such aagriculture, textiles, and apparelthe same sectors that are the mosprotected in wealthy countries, reflecting strong domesticconstituencies resistant to change. Developing countries also havedefensive concerns. Many of them have agricultural sectors thatemploy large shares of their population but are not competitive inglobal markets. And many want to maintain trade barriers to nurturefledgling domestic manufacturing and service sectors. The differentpriorities of developed and developing countries make it inevitable thcurrent and future bargaining rounds will be more complex and difficthan past negotiations What would it take to produce a global trade


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agreement that addresses the interests of both developed anddeveloping countries? To analyze the underlying economic interests othe WTOs diverse members and the potential effects of the DohaRound negotiations, the Trade, Equity, and Development Project of th

Carnegie Endowment for International Peace commissioned a model oglobal trade as a tool to estimate the impact of different trade policyscenarios. It is one of the newest in a series of models built to analyzethe Doha Round, using the latest global trade data. In comparison witother models, the Carnegie model makes several improvements. Mosnotable are more accurate representations of the way labor marketsfunction in developing countries. Most models assume that all labor,ncluding unskilled labor, is fully employed. Yet this assumption is far

from the reality of developing countries. The Carnegie modelncorporates actual unemployment rates. Most model streat agricultuabor as identical to urban

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