David Jessop, Contributor
WHAT IF anything should we expect from the Doha round: the now idling negotiations at the World Trade Organisation (WTO) on global trade liberalisation?
Believe Pascal Lamy, the philosopher-king of the WTO, and there is still time to achieve agreement on tariff-cutting formulas for opening markets for agriculture and industrial goods.
Listen to Rob Portman, the United States trade representative and the message is more pessimistic. If the 'drop dead' date of April 30 is passed without agreement, it will not be possible, he says, to meet the WTO's collectively agreed deadline to finalise by the end of 2006 the basis on which tariff schedules will be reduced.
Much the same message comes from the European Trade Commissioner, Peter Mandelson, who told journalists in Argentina last week that the moment of truth is fast approaching, and that the next weeks and months will determine if the Doha round succeeds or fails.
NEW GLOBAL TRADE LIBERALISATION PACKAGE
Since 2001, member countries of the World Trade Organisation (WTO) have been talking about a new global trade liberalisation package that is meant to boost the world economy and encourage development. But they are fast running out of time. The signs are not good
In the U.S., parts of Europe and elsewhere there is a form of creeping protectionism as nationalism and xenophobia begin to find political voice. This is at its most apparent in France and the United States where the political climate is such that there is a preparedness to close markets to foreign investment, a disinclination to further liberalise trade and something close to an outright rejection of employment being ceded to China, India or Brazil.
There are also electoral pressures. In mid-2007, the US President will lose his fast track authority to approve the detail of new trade deals. Up to that point the US Congress can only accept or reject new international trade arrangements. After that they will be able to scrutinise and amend them on a line-by-line basis. On present evidence this would suggest that Congress would decimate any agreement that would open U.S. markets at a time of diminishing presidential political capital and declining Republican support.
The reality is that despite Pascal Lamy's most recent call for ministerial involvement to try to unlock the possibility of agreement on the three key issues of domestic farm subsidies, agricultural market access, and industrial tariffs, the mood among trade negotiators about the future of the round is increasingly pessimistic.
In London in early March, there was a serious discussion on possible percentages for tariff reductions, but participants described the process as being exploratory, tentative and not mature enough for agreement to be reached.
The same month, the British Prime Minister Tony Blair and the Brazilian President Luiz Inacio Lula da Silva called for a summit of world leaders to orchestrate a breakthrough.
Whether this will happen will best be judged from the extent to which there is a positive ministerial response to Mr Lamy's call for greater ministerial involvement. If that does not occur in the run up to the April 30 deadline it will rapidly become apparent that there is unlikely to be enough global political will for to convene a summit.
While this is not to suggest that the present WTO is dead, its future is looking decidedly uncertain.
As if in confirmation of this there are strong signals from the US, Brazil and the European Commission that they are hedging their bets. Brazil is focusing on opening markets to South Africa and India; the US is aggressively pursuing bilateral arrangements with nations like Malaysia, India and others in Asia, while Europe is once again pressing forward with free trade agreements with Mercosur, Andean and others elsewhere.
There is also a sense that the world is now less ready for a multifaceted global trade package than when its dimensions were conceived in Doha in 2001. Then there was a consensus on objectives, but little recognition of the practical implications of trying to achieve consensus in a world in which three emerging nations are aspiring to eventually rival the developed world and smaller nations have fully awoken to the potential threat of over-fast economic opening.
Through skilful negotiating strategies, judicious use of WTO complaints and the capacity to block progress or reserve judgment Brazil has been able to buy time to continue its development, position itself as a negotiating equal to the U.S., and EC and to determine the pace of liberalisation.
But much more potent has been the global fading of political will in the face of electorates who want bread, jobs and stability today rather than waiting for manna tomorrow. This sense of alienation from the process is little helped by the fact that WTO negotiations are conducted in an almost impenetrable language, through arcane and opaque mechanisms that often defies politicians best efforts to describe how the process may bring benefits.
From a purely Caribbean perspective the multilateral liberalisation process offers in the longer term an alternative to a reciprocal trade arrangement with the U.S. that would rapidly cause the U.S. economy to come to dominate national economies. But in the shorter term there may well be significant advantages with a dramatic slowing of the WTO process.
The region still has to make the Caribbean Single Market and Economy work. It is scheduled to complete negotiations by December of this year for an Economic Partnership Agreement with Europe that will include elements of reciprocity as it is phased in over twelve or more years after 2008. There are also new trade arrangements being discussed with Canada and Latin America. All of this will take time to achieve, as will completion of the difficult final adjustment processes for sugar, bananas and rice.
The appetite for the completion of a full WTO round may be diminishing rapidly. An all-encompassing agreement may be unachievable for many years yet.
David Jessop is the director of the Caribbean Council and can be contacted at firstname.lastname@example.org. Previous columns can be found at www.caribbean-council.org