Limited or ambitious round at the WTO?

By C. Rammanohar Reddy

GENEVA, JULY 27. While government officials are far from agreeing that the World Trade Organisation should launch a new round of negotiations on trade liberalisation, the disagreements are more about the scope of the agenda than about a round itself.

A WTO ``round'' evokes strong feelings in India and a number of countries because of the wide-ranging nature of eight such negotiations in the history of GATT/WTO, most notably in the controversial Uruguay Round of 1986-93. All trade officials agree that the WTO already has on its plate a sufficiently large number of issues that would normally constitute a round. Talks began as scheduled in 2000 to reduce subsidies in agriculture, carry trade liberalisation forward in services and review a number of other agreements including on the trade-related intellectual property rights (TRIPS). Indeed, India, seen as one of the strongest opponents of a new WTO round, has consistently maintained that it is willing to fully engage in talks on this ``built-in'' agenda. The only additional issue that India and many other developing countries have put on the table is a package to address difficulties in implementing the UR agreement.

But the problem is that some countries, notably the European Union, have for years been trying to enlarge the negotiating agenda substantially so that the losses anticipated in future talks on agriculture could be compensated by gains in the form of talks on a global foreign investment treaty and another on competition laws. Because of these demands from the E.U. and, to a lesser extent, Japan, it is accepted that the talks on the built-in agenda will lead nowhere unless there is a broader agenda. However, as the latest WTO review has indicated, an agreement on such an agenda is far from being reached, affecting the possibility of a new round being launched during the Doha WTO ministerial conference in November. The key to resolving the impasse does not lie with the developing countries, occasionally unfairly accused of being obstructionist by insisting on a solution of their implementation concerns, but may well be with the other trade elephant, the U.S., which has always preferred a focussed agenda. This would revolve around agriculture, a position shared by the Cairns group of agricultural exporting countries (who include Australia, Argentina and Canada). But the U.S. agenda will also have a few other issues such as lower industrial tariffs and transparency in government procurement. The question is how far the U.S. will go to accommodate E.U. interests and, if it does so, whether it can then persuade or force the Cairns group and the developing countries to sign on.

There is a range of agendas between the two extremes of a narrow focussed agenda, preferred by the U.S., and the over- arching one, demanded by the E.U. In a possible compromise, the Europeans get what they want in some additional issues but only in half measure such as a time-bound work programme on foreign investment that will result in negotiations a few years later. The crucial factor is whether such a compromise can be reached between now and the Doha meeting. The other equally important issue is even if a round is launched in Doha, there is a strong possibility that irreconcilable differences between countries in a number of areas will result in a ``fudged'' mandate. This would force countries to spend years cleaning up a negotiating agenda forced on them by the demands of compromise and the anxiety of the E.U., the U.S. and the WTO Secretariat to launch a round in 2001.

While most country positions have hardly changed since the failure to launch a round at the Seattle ministerial meeting in November 1999, two relatively new issues have cropped up. First, all countries other than the U.S. want to re-negotiate the existing agreement on anti-dumping duties and, second, more crucially, the E.U. has spoken of the need to draw up new WTO rules that would monitor trade in food with genetically modified organisms (GMOs) and agricultural products that are possible infected with disease. The two are potentially explosive issues that could derail the process between now and the ministerial conference.

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