[ By Antoine Martin ]
Two years after Bali, the 10th WTO Ministerial Conference is taking place in Nairobi from December 15th to December 18th. Yet, the Conference’s Goals are not seen as ambitious and, despite the long known failure of the Doha Round negotiations, some of its remains seem to persist. For better or worse. Should business continue as usual, though, the Doha Round might be somehow buried in Nairobi.
WTO negotiations have long been in a deadlock
Sadly, the Nairobi goals lack a ‘wow factor’ and some have already anticipated unsuccessful negotiations based on messy proposals as a result of the incapacity of trade negotiators to agree on a mutually acceptable draft declaration in Geneva, last October. Simply, put, the situation is as follows.
Developing economies, on the one hand, keep putting forward the necessity to achieve the Doha Round discussions which, since 2001, have essentially aimed at easing access to agricultural markets in developed economies as a means to help to develop the least developed ones. The most advanced economies, on the other hand, rather consider that Doha has failed and shall remain a feature of the past.
In the main, the Doha negotiations ought to have lasted for three years. Fifteen years later, the issues are not solved and remain at the forefront of multilateral trade negotiations because some developing economies keep requesting progress on food security issues prior to moving on.
India, for instance, complains about subsidized farming in developed economies and is still requesting trade mechanisms entitling poor countries to hold public food stocks because the country’s economic model partly relies on a public food crops stockholding scheme providing oil, sugar and grain to its internal market. For developed economies such as the EU or the U.S, however, the mechanism breaches the principle of free market rules while the idea of allowing India to export such subsidized food stock is simply not an option.
India is not alone in this ‘Doha first’ claim, though. Trade and Industry Minister Rob Davies, for instance, has made it clear that the South African government wanted to see the Doha objectives completed before moving on with further trade negotiations. A G-33 Ministerial Communiqué dated December 14, also, expressed deep disappointment that discussions so far failed to reach a compromise in Geneva but nonetheless urged Members ‘to find ways to address the impasse’ and called on the international community to resume and continue to ‘seek a level playing field in global agricultural trade’ in the Post Nairobi era.
WTO Director warning Nairobi might be going nowhere
The 10th Ministerial Conference, as a result, might simply go nowhere. Pre-Nairobi discussion have progressed as far as cotton issues and transparency discussions related to services are concerned but debates on agriculture, public stockholding and the negotiations on the so-called Special Safeguard Mechanisms providing developing countries with a certain margin against subsidised agricultural imports are in an impasse. Consultations on export competition (elimination of export subsidies, export finance repayment terms, special and differential treatment issues, transparency provisions, etc.) remain unresolved, whilst efforts towards fisheries subsidies, anti-dumping measures and the Rule of Origin in the least developed economies have led little convergence.
Hence, the Nairobi starts with a certain dose of scepticism. In Geneva on October 29th, WTO Director-General Roberto Azevêdo actually warned the international community that insufficient progress had been made regarding the Conference’s roadmap. A position also followed in a joint declaration by 29 participating countries on December 7th, and in a G-33 Ministerial Communiqué dated December 14th.
Calling for serious engagement, Azevêdo – who had previously appointed three facilitators to consult with members – therefore invited the participating countries to ‘rethink the red lines that they ha[d] been drawing’ and to introduce more flexibility and pragmatism in the negotiation process. ‘But those elements have not materialised, and so the reality is that we are not moving forward’, he admitted. In Antalya (Turkey) on November 16th, Azevêdo furthermore urged G20 leaders to strengthen the current global trading system by delivering solution on agriculture, development, public stockholding as well as on the speedy ratification and implementation of the 2013 Bali Trade Facilitation Agreement which essentially focused on speeding up the release and clearance process of goods in transit and on increasing trade facilitation through effective cooperation between customs.
Could Nairobi be missing the point?
The Nairobi negotiations, in short, might therefore end up as a further trade deadlock. In line with the global WTO negotiations, that is.
In fact, the Nairobi Conference might even be missing some important discussions on trade, investment, trade in cross-border services (including financial services, telecommunications, e-commerce, competition, intellectual property, etc.) which now increasingly take place outside WTO premises through the negotiation of various stand-alone Free Trade Agreements. The Trans-Pacific Partnership led by the U.S and signed in October is a clear example of recent parallel trade regulatory efforts shared between twelve countries, but the ongoing U.S – EU TTIP consultations or the Chinese FTAAP Free Trade Agreement project may also be mentioned as serious contenders to WTO negotiations.
The truth is, Azevêdo himself recently noted that much of current trade discussions lately had focused not on what WTO multilateral standards could bring to international trade but on how regional and bilateral trade initiatives could speed up cross-border and regional development. All regional Free Trade Agreements have ‘WTO DNA’, he admitted, but in fact regional agreements cover areas that are not currently covered by the WTO because economic leaders need to move on from the deadlock of Doha agricultural export subsidies and seem to have found alternatives ways of doing it.
Could the WTO need a change?
As far as Nairobi is concerned, therefore, the stakes might simply be whether WTO ought to remain the backbone of the multilateral trading system and whether the WTO framework should continue to play a central role in promoting economic growth and development. As discussed on other opinions on the Circle, various trade liberalization initiatives are for instance stealing the show from the WTO, particularly in the Asia-Pacific region.
Director General Azevêdo, in fact, suggested on December 7th that the Ministerial Conference would be the ‘last opportunity to show the flexibility and political will that we need’. In his words, ‘we have to find ways of moving the Doha issues forward and keeping the organization operational and responsive to challenges currently faced by members […] but for this to happen, the G20 leaders need to work collectively — they must work to find and explore synergies on a range of trade-related issues. We are not doing that now’.
So, will the Doha Round be buried in Nairobi?
Insights by Dr Antoine Martin
Dr Antoine Martin is the Head of Insights of The Asia-Pacific Circle, which he co-founded in 2016. Antoine follows analyzes and comments on developments in international trade, investment, and finance, with a particular focus on Asia-Pacific relations. He is also a scholar at The Chinese University of Hong Kong, Faculty of Law, a leading academic institution in Asia.
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