Doha is no dodo as it takes off on new flight path

Articles and op-ed

Published in The Australian

1 December 2012

FRESH winds are blowing through Geneva. That's the feeling among most negotiators following their return from the northern summer break to resume talks within the World Trade Organisation on the long-stalled Doha round of multilateral trade negotiations.

Back in national capitals, columnists are writing what many governments are thinking: that Doha is as dead as a dodo. But while it is true the Doha round, now in its 11th year, will not end the way it was envisaged in 2001, there is life in the old bird yet.

Eleven years in the life of a trade negotiation is long enough for the bird to evolve. How was it revived and what could the new Doha look like? Late in 2010, trade ministers identified 2011 as a "window of opportunity" to complete the Doha round before important elections in 2012, including the US presidential contest. Leaders' statements at meetings of the Asia-Pacific Economic Co-operation forum, the G20 and the East Asia Summit all urged ministers and Geneva negotiators to do everything possible to complete the round before the window closed.

Like the dodo, this bird was flightless. A meeting of seven trade ministers in a restaurant atop a mountain in Davos, Switzerland, in January last year had all the plumage but somewhat less substance.

If the US, China, the EU, India, Brazil, Japan and Australia could not envisage an open flight path then others certainly would not.

China and the US were left to go away and resolve their differences over industrial tariffs, then the biggest obstacle.

But by May last year it was obvious no progress was being made.

Seized of the situation, Australia began advocating a new idea: achieving a modest initial agreement by the end of 2011 as a confidence-building down payment on the full deal, which could be settled later.

Member countries agreed to try this approach, which became known as "early harvest". But discussion soon turned to the contents of the basket: it should be not too heavy as to make agreement by year's end unachievable, nor too light as to lack the balance of interests for the diversity of WTO members.

While consensus began to emerge that the early harvest should contain mainly items of value to the developing world, members could not agree which particular issues should be included.

As no agreement was reached on content, the early harvest basket was tossed out the fast-closing window of opportunity.

At a meeting of the Commonwealth Heads of Government in Perth in August last year, Julia Gillard floated the idea of finding "new pathways" for completing the Doha round.

The round would be broken into its constituent parts and negotiations on each part brought to a conclusion on a provisional basis. When all parts of the round were completed, the commitments given in its constituent parts would be made legally binding.

The Prime Minister took her new pathways proposal to the G20 in Cannes, to APEC in Honolulu and to the EAS in Bali.

Australia was happy its proposal was adopted unanimously by WTO members at its meeting in Geneva in December last year.

Next steps in finding new pathways involved identifying those negotiations that were most advanced and potentially capable of being brought to a successful conclusion sooner rather than later.

Again, Australia nominated the negotiations on trade facilitation and those relating to export competition in agriculture.

Trade facilitation had the virtue of not being an issue that necessarily divided developed and developing countries.

Streamlining Customs procedures and clearing imports and exports from wharves more quickly is good for both.

The benefit from a trade facilitation package is estimated to account for 44 per cent of the entire benefit of the Doha round, with two-thirds of it accruing to developing countries.

With developing countries increasingly participating in global value chains, the cost of imported inputs could be lowered through trade-facilitating initiatives such as adopting best-practice risk management customs procedures. And plant and equipment used for infrastructure development and local production for export could be brought in with less delay and at lower cost to users.

Negotiations on trade facilitation have gathered the most elusive of attributes in Geneva: momentum. Pascal Lamy, head of the WTO, referred to this during a speech in Melbourne this week.

Striking an early deal on trade facilitation and some initial agricultural reforms would build confidence that the old Doha bird has found a new flight path and has plenty of life in it yet.

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