Perspectives
Doha Development Agenda, aka Dodo
The world’s focus on plurilateralism and regional trade agreements has ensured its slow death
The Dodo is extinct. Perhaps incorrectly, the Dodo’s flesh is believed to have tasted awful. To many commentators, extinction and loathsomeness are acceptable adjectives for DDA too. By DDA, one doesn’t mean Delhi Development Authority. One means Doha Development Agenda. There will be a Ministerial Conference (MC) of the World Trade Organization (WTO) in Geneva in December. Consequent to attachment for acronyms, this is called MC-8. On an average, there should be an MC once every two years. This Geneva meeting is 8th. The 4th meet in Doha in 2001 launched DDA. Till the 6th one in Hong Kong in 2005, we were on track for going somewhere.
No longer. Issues are systemic. Nitty-gritty of non-agricultural market access (Nama), agriculture or services is less important. With 153 WTO members, decision-making is certain to be messy, especially if decisions are consensus-driven. On paper, WTO is more democratic than World Bank or IMF — not quite in practice. There is an aristocracy, say US, EU, Japan and Canada, socalled Quad countries. Decision-making in any aristocracy is faster than in democracy, not that decisions are necessarily best. During Uruguay Round, aristocracy got what it wanted. They rammed it down the throats of developing countries and LDCs.
We have several developing country/LDC groupings now: African, Caribbean, Pacific (ACP), African group, Apec, Mercosur, G-90, G-10, G-20, G-33, Nama-11, LDCs, small and vulnerable economies (SVEs), Cotton-4 and so on. Compared to Uruguay Round (1986-94), these countries are better equipped and more informed. This doesn’t necessarily mean they know what they want. More charitably, they know what to oppose, in reaction to suggestions from developed countries. But there isn’t a proactive agenda. However, because of greater awareness and capacity, WTO has become more democratic, and that is the aristocracy’s problem. Hence, we have odd suggestions. Uruguay Round was an entire package or single undertaking: take it or leave it. You couldn’t unbundle it. But US/EU can’t get DDA going with 153 countries. All 153 economies don’t matter equally in trade and related negotiations. Therefore, break them up and create hierarchy among countries. As long as you have Brazil, India and China, so-called emerging economies, on board, all is fine. At best, one can add South Africa, Argentina, Indonesia, Malaysia and Mexico. There are several different ways this splintering idea is floating around. First, let’s go plurilateral and dilute the single undertaking clause. A multilateral agreement is negotiated under WTO and is mandatory on all WTOmembers.
A plurilateral agreement is negotiated under WTO, but is open for signature to countries that wish to. WTO has a liberalisation role. It also has a regulatory role, enforcing rules. As of now, the two roles often blur. But somewhere down the line, difference between two roles will become clearer. Contrary to what we think, WTO’s role in triggering liberalisation has been limited, except where countries have acceded to WTO after WTO was formed.
Liberalisation has often been unilateral, or triggered by structural adjustment measures. In this plurilateral idea, we are effectively saying we won’t get liberalisation by negotiating among 153 members. Let us limit the canvas, a bit similar to what is being done through regional trade agreements (RTAs). Phrases like early harvest and partial harvest are floating around.
More accurately, early harvest was used earlier. Given impasse, one now finds expressions like partial harvest. The key point is: what is the harvest and who is doing the harvesting? As India, we might be happy we are now at the high table. But it seems to me that all these proposals negate democratic principles carefully nurtured and built.
With this emphasis on plurilaterals and RTAs, no one is particularly interested in DDA now. US and EU have their own internal economic problems, apart from political electoral cycles and review of Common Agricultural Policy, due in 2013. There are quantifications of welfare, consumption and export gains that might result from DDA liberalisation. That is peanuts compared to numbers involved in fiscal stimulus packages. Before 2013, there is no obvious reason why developed countries should be interested. Ditto for Brazil, India and China. Nama demands, agricultural liberalisation offers and even service sector proposals are not attractive enough. That a change is going on in global sources of economic power is known. However, we are in an interregnum. The former aristocracy expects emerging market economies to don the mantle of leadership — and contribute financial resources — without accepting reforms in decisionmaking structures of international institutions. That’s non sequitur. Without mentioning names, why haven’t we had a Chinese head of IMF and a Brazilian head of WTO so far? DDA is in ICU now. But at MC-8, no minister is likely to publicly proclaim demise of DDA. That would be PR disaster. DDA should revive after 2013. Some people argue end of multilateralism will be disaster for smaller economies. They are likely to get their arms twisted more in bilateral negotiations. As a proposition, that is unquestionable.
But it is a red herring. DDA in limbo doesn’t mean end of multilateralism. Uruguay Round agreements still exist and so do their rules and WTO as enforcer of those rules. In DDA proposals so far, there has been little incremental refinement or addition to those rules, dispute settlement, antidumping, anti-subsidy, safeguards, special safeguards, SPS, TBT included. All that one is temporarily sacrificing is prospect of further market access liberalisation. In that, a no deal is no big deal.
(The author is professor at the
Centre for Policy Research)
BIBEK DEBROY
