The Doha round: Success is assured - but what kind of success?

22 June, 2006

LONDON The Dance of the Seven Veils appears pedestrian when compared with the strip-tease currently being performed by the world's trade negotiators in Geneva. They are slowly and finally revealing their concessions to open global trade - just in time.

The current round of World Trade Organization talks, known as the Doha round, came into being with a long list of ambitious targets and a short list of tight deadlines in which to achieve them. It is no surprise that almost all the deadlines have been missed.

And yet success is assured. The state of the negotiations, the gains made so far, the gains still to come and the increasing realization as to what is at stake all are pointing in the same direction, toward successful completion for the Doha round.

The dynamics of a trade round are such that issues need to mature to the point where all parties are ready to make final offers and concessions. That is the point that has now been reached. After five years' investment of energy and many charades, the parties involved can see the shape of the future trade horizon. All can see that all stand to gain.

For developing countries, playing long and hard in the Doha round has already led to access to cheaper antiretroviral drugs; a deadline for the end of the worst of the European Union's agricultural subsidies; a U.S. commitment to end cotton-export subsidies; and almost unfettered access for the poorest of poor countries exporting into the markets of developed countries. None of these gains have been sufficiently quick or total, but they are a start.

More will be secured before the Doha round is concluded, especially in the form of aid for trade and other special treatment for developing countries. This will enable those countries to make the transition to the open playing field of global trade, even if it cannot be a level playing field for years to come.

Three moves could bring further gain.

First, as the Commonwealth has long argued, developed countries have to give and give again, without seeking any reward. The EU must make larger cuts in its agricultural tariffs. The United States must make larger cuts in its agricultural subsidies. Japan needs to concede more ground too.

All need to open their wallets wider to assist developing countries in the transition to a more open trading environment. There needs to be greater recognition that each country has some comparative advantage, and that economies work best when those advantages are able to blossom rather than be denied. Both America and the EU need to get much closer to the proposals made by the Group of 20 countries.

Second, those countries in the middle ground between developed and developing - with Brazil and India to the fore - need to be prepared to make larger cuts in their tariffs on industrial and other nonagricultural goods. These countries have become the new negotiating force. They need to shoulder new responsibilities as they enjoy new benefits.

Third, developing countries need to make their own contribution to liberalization and market opening, in line with their abilities.

Two strong undercurrents can bring the proceedings to a close. First, the realization that the greatest gain lies in the power of trade to overcome poverty. One in three people on our planet live in that state. Poor people who have no opportunity can become angry people. They will also actively seek to move to places where they can find opportunity.

Second, no WTO member will want to take responsibility for killing the round. It is well recognized that the alternatives - regional and bilateral trade agreements - have limited value and benefit, squeezing poorer and smaller countries.

So even if the eventual Doha deal is not the best deal, it will be better than any alternative on offer. It will leave all standing to negotiate another trade benefit on another day.

The WTO now has just six months to secure a deal - and to preserve its credibility - before U.S. trade negotiating authority expires at the end of the year. So expect more from Geneva by the end of this month.

The pressure needs to be maintained on governments and negotiators to ensure the best possible outcome by the end of this year. Success is assured. The question is how great the success will be.

Don McKinnon is the secretary general of the Commonwealth.