Implications Of Stalled Doha Round On Emerging And Least Developed Economies In An Essay.

Why has the Doha round of WTO agreements stalled? What are the implications for emerging and least developed economies? 

Background of the World Trade Organization and the Doha Development Agenda

The World Trade Organization is an exclusive international organization that explicitly deals with the trade rules between different nations. At the core of the organization are the WTO agreements which are negotiated and signed by the trading nations of the world and at the same the agreements are ratified in their respective parliaments. The goal of the organization is to ensure that the business transaction and world trade occur smoothly and as free as possible. The WTO has 160 member countries and this represents 98 percent of global trade. The prime decision making body is the Ministerial Conference, that meets once in 2 years and this meeting bring all the WTO members together. The ministerial conference takes in to account all the matters under the multilateral trade agreements (World Trade Organization 2018). This study is based on why the Doha rounds of the WTO agreements stalled and what are the implications for the least developed and the emerging countries.

In November 2001, the fourth ministerial conference took place in Doha, Qatar. The WTO member had a consensus that they will initiate new negotiations. These negotiations are based on working out the present issues and also to address the present agreements. The entire package as a whole is called Doha development agenda (DDA). The negotiations took place in the subsidiaries of and in the Trade Negotiations Committee (TNC). These committees are either regular committees and councils or councils they are specially formed negotiation groups. In the Doha ministerial conference, the developing nations were complaining about the difficulties they were facing with regard to the implementation of the WTO agreements. The new items that were first mentioned in Doha are: multilateral environmental agreements, trade barriers on the environmental goods and services, subsidies on fisheries. The prime objective of the Doha round of negotiations under the aegis of World Trade Organization is the promotion of the free trade (Bagwell and Staiger 2013). The four main focus areas were:

• Reduction of the antidumping laws- The WTO rules allow the member countries to impose the antidumping duties on the products on the foreign countries which are sold at a cheaper price in comparison to the prices at home and even below the cost of production. This directly hampers the domestic products and significantly harm the domestic business.
• Phasing out the subsidies- in the production of the agricultural products, subsidies play a major role in bringing market distortions. The result of the agricultural subsidies plays a major role in reducing the volume of the agricultural trade, prices rise for the customers, and subsidies encourage the overproduction of similar kind of agricultural products (because government is buying surplus from the agricultural producers).
• The intellectual property should allow the poorer nations to have the health protection provisions. Within the time limit of one year the rich countries must comply with the rules. Whereas, for the poorer nations there is a grace period of five years and ten years for the very poor nations.
• Reduction of the tariffs on industrial goods and services- for the year 2000, the agricultural products had a tariff of 4.4 percent for Canada. For European Union it is 4.5 percent, 4 percent for Japan, and 4.7 percent in United States. Similarly for the agricultural products the average Tariffs rates were 22.9 percent in Canada. For European Union it is 17.3 percent, 18.2 percent in Japan and 11 percent in United States (Bagwell and Staiger 2011).
• E-commerce- Countries will not collect custom taxes or duties on the internet services or products.
• Dispute settlement- for the better settlement of the disputes, recommendations were applied.
• Trade and environment- coordination of the trade agreements with the trade rules for the protection of the natural in the developing countries.
• Differential and special treatment- special treatment to be provided for the developing countries. It was provisioned that the developed countries must safeguard the interests of the developing nations, while at the same time provide financial assistance to the developing nations for the buildup of the technical standards and the infrastructure (Bagwell and Staiger 2011). 

Doha development was important because if the agenda was successful, it would have improved the condition of the developing nations. In the developed nations, the government spending on the subsidies would have reduced and would have boosted the financial companies. The negotiations at the Doha round stalled indefinitely because the outcome of the round was not beneficial mostly for the developed countries (Dosi and Stiglitz 2014). United States especially knew that it cannot compromise on cutting the subsidies that it provides to its agricultural sector. The European Union also knew that if the Doha round gets ratified then it would have to cut its agricultural tariffs. The other emerging countries on the other hand knew that they would also have to reduce or cut the agricultural tariffs. Even it took 5 years for the Doha round to prepare itself, still the major players did not step in to make the Doha round a success. Similar to the Doha round, brinkmanship and the deadlocks are bound to occur during the passage of the trade negotiations. The Uruguay round also came to a standstill before reaching any meaningful conclusion. Whereas, there as certain reasons why the Doha round was more complicated with respect to its predecessors (Schwab 2011). The presence of the poor countries in this round is a welcome change and was considered as an organized force. The poor countries have the right to speak about their problems and must be provided special treatment. Whereas, the reality is that these poor countries are nothing offered in return and are a drag on the system. The preferential countries which included the small states of the Pacific, Caribbean and Africa have interests in the round. The big developing nations like Brazil and India are willing to negotiate hard and even ready to derail the round to promote their own national interests and aims (Scott and Wilkinson 2011). The second reason can be traced to the slow progress arising from the trade negotiations and political calculus. In majority of the countries the political zeal and will was low. In countries like United States and France, the president was newly elected and did not want to go against the powerful agricultural lobby. The major reason that can be cited for the stalling of the Doha round is the agricultural subsidy. Be it the bigger developing nation or the developed nations, these countries provide a lot of subsidies for their agricultural output to the agricultural farms. These subsidies not only increases the viability of the agricultural products within the country but also its export earnings increases in comparison to the other poor nations. Whereas, considering the developing nations, these nations subsidize the agricultural products in order to sustain the daily life and the agricultural produce of the farmers. Such developing nations include India and Brazil (Vieira and Alden 2011).

Challenges faced by developing nations in implementing WTO agreements

The Doha rounds have stalled and it going nowhere. The negotiations at the ministerial conference did not yield any fruitful result. The reasons for the round getting stalled is well known to the world. Whereas, due to stalling of the round the several developing nations like India, Brazil did not face any major issue. The deadlock proved to be beneficial for the developing nations. Because if the Doha round would have got ratified, the burden of tariff reduction on the imports would have entirely on the developing nations. Reduction of import tariffs would have indirectly benefitted the developed nations. Consequently, reduction in subsidies to the agricultural sector could have spelt a disaster for the developing nations (Ezeani 2013). A majority of the developing country rely heavily on the agriculture, the poor farmers thus require the much needed subsidy from the government for the purpose of sustainable development of the agriculture. The deadlock resulted in to keeping the status quo on the agricultural subsidy. Had the Doha round been ratified it would have resulted in greater perils for the developing nations. The non-tariff like the standards with respect to the packaging requirements, sanitary and phytosanitary standards remain to restrict the export of the products from the developing countries in the developed nation’s market. It was also discussed at the Doha rounds that the least developed nations will be provided with aid for trade. The aid for trade was to assist the developing nation’s capability and to prosper in international trade. Such, opportunities are completely missed due to the stalling of the Doha rounds (Hoekman and Nicita 2011).

Therefore, from the above discussion it can be concluded that, Doha rounds integrated the poor nations in to a global conference on tariffs, agriculture, environment and global trade. The trade although benefitted the developed nations but the reduction of the agricultural subsidy was not promoted and mooted by the developed nations. The presidents of USA and France were newly elected and did not want to confront with the powerful agricultural lobby. The lack of show of will developed nations resulted in to the derailment of the Doha round, and it has impacted the hopes of the developing nations that relied largely on the ratification of the round. 

References

Bagwell, K. and Staiger, R.W., 2011. What do trade negotiators negotiate about? Empirical evidence from the World Trade Organization. American Economic Review, 101(4), pp.1238-73.

Bagwell, K. and Staiger, R.W., 2013. Can the Doha Round be a development round? Setting a place at the table. In Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century (pp. 91-124). University of Chicago Press.

Dosi, G. and Stiglitz, J.E., 2014. The role of intellectual property rights in the development process, with some lessons from developed countries: an introduction. Intellectual property rights: Legal and economic challenges for development, 1, pp.1-55.

Ezeani, E., 2013. WTO post Doha: trade deadlocks and protectionism. Journal of International Trade Law and Policy, 12(3), pp.272-288.

Hoekman, B. and Nicita, A., 2011. Trade policy, trade costs, and developing country trade. World Development, 39(12), pp.2069-2079.

Schwab, S.C., 2011. After Doha: why the negotiations are doomed and what we should do about it. Foreign Affairs, pp.104-117.

Scott, J. and Wilkinson, R., 2011. The poverty of the Doha Round and the least developed countries. Third World Quarterly, 32(4), pp.611-627.

Vieira, M.A. and Alden, C., 2011. India, Brazil, and South Africa (IBSA): South-South cooperation and the paradox of regional leadership. Global Governance, 17(4), pp.507-528.

World Trade Organization, 2018. WTO | About the organization. [online] Wto.org. Available at: https://www.wto.org/english/thewto_e/thewto_e.htm [Accessed 19 Feb. 2018].