End of the Road

The run-up to the 10th ministerial meeting of the World Trade Organization (WTO) in Nairobi later this month has been anything but constructive. Kenya’s capital will see a battle that will decide whether the WTO can provide a few minimally credible developmental outcomes for its large membership of developing and the poorest countries. More likely, to suit the interests of the advanced countries the Doha Development Agenda (DDA) will be all but buried.

Attempts to finalise the Nairobi ministerial statement are currently mired in unbridgeable differences on several points, especially the future of the unresolved issues of the long-running DDA. A questionable package of outcomes that sidesteps the core issue of trade distorting domestic subsidies in agriculture is being pursued to suit only one country, the United States (US). At the heart of the divide is that the Triad of the three largest advanced economies—the US, European Union (EU) and J­apan—seems determined to empty the Doha Round of all content. In 2001, immediately after the 9/11 terrorist attacks, the Triad launched the DDA negotiations in the face of intense opposition from developing countries. To make the round acceptable, the group agreed to address the fundamental inequities of global trade arising from the previous Uruguay Round agreement. After 14 years of spasmodic negotiations, the Triad and some other developed countries now feel that the Doha Round is a costly undertaking because of the reforms that would be required in agriculture, especially for the US. Washington has passed a new farm bill that takes farm support to well beyond the Doha ceiling of $14.5 billion. Moreover, the Triad has already managed to pocket a binding WTO trade f­acilitation agreement (TFA) without having to pay anything for it. The TFA is the jewel in the crown that it fought so hard to retain in the DDA negotiations after it was initially stamped out by the developing countries at the Cancun ministerial meeting in 2003.