In the wake of the terror attacks on the World Trade Center in New York of 2001 and facing a global economic slowdown, the members of the World Trade Organization (WTO) agreed to launch the Doha Development Agenda (DDA).
The aim of the new round of negotiations was to further liberalize trade to promote economic recovery, growth and development. The focus was to be on the interests of the developing countries. Alongside overseeing existing trade rules and resolving disputes between members, negotiating new rules and liberalizations is one of the most important purposes of the WTO.
Objectives of the Doha Round
The principal objective of the DDA is to improve global market access for agricultural products, industrial goods (non-agricultural market access, NAMA) and services. In addition, another 20 negotiating topics were defined, including trade facilitation by improving customs procedures, stronger protection for intellectual property rights, reducing tariffs on environmental goods and services, and improving the rules in the field of trade defence measures and technical barriers to trade. The DDA was also supposed to pay special attention to the interests of the developing countries.
From the outset, the discussions between the already more than 140 WTO members turned out to be difficult. After barely three years, several key issues have been removed from the agenda, as there was no hope of finding common ground. Those were investment, competition and public procurement. These questions are especially important for the industrialized countries, but the developing countries and emerging economies were unwilling to commit themselves. On the one hand, they feared that implementing commitments would create problems, on the other, they felt they lacked the influence to shape the rules according to their needs.
In 2008, the DDA talks almost failed. No compromise could be found between the economically and politically rising emerging economies (Argentina, Brazil, China, India) and the industrialized countries (especially the United States and the European Union) in the key areas of agriculture and market access for industrial goods. Even though countries like China have caught up with the biggest and most powerful trading nations since the DDA was initiated, they continue to demand the same privileges and opt-outs extended to other developing countries.
Intermediate success, bleak prospects
The new WTO Director-General Roberto Azevêdo (Brazil) took up his post in September 2013 and quickly succeeded in injecting new momentum into the negotiations. Important advances were achieved during the ninth WTO Ministerial Conference in Bali in December 2013. Agreements have been reached on the issues of trade facilitation, agriculture (including public stockpiling) and development (e.g. monitoring the special treatment of developing countries). The Trade Facilitation Agreement is making good progress after initial delays and could potentially come into force in 2016 (once two-thirds of members have ratified). According to studies by the Organization for Economic Cooperation and Development (OECD), especially low- and middle-income countries will benefit from the improvements and supporting measures it introduces.
The Bali decisions also provided for an agreement by the end of 2014 on a work programme to complete negotiations on the outstanding DDA topics. These were to focus especially on balanced market access in the three major areas of agriculture, NAMA and services, and on development aspects. Due to the lack of agreement on agriculture, the deadline expired without a significant outcome. In the end, even after a day’s extension, the mid-December 2015 Ministerial Conference in Nairobi was only able to reach an agreement on a limited number of DDA topics.
Above all, the Nairobi package comprises multilateral rules for rectifying market distortions in agricultural trade and facilitating the integration of the poorest countries into world trade. The measures adopted include abolishing export subsidies for agricultural products and detailed arrangements for simplifying rules of origin to benefit the least developed countries. Multilateral agreements on market access for industrial goods remain out of sight. The final declaration underlines that all WTO members intend to continue to address the outstanding issues, but notes that there is disagreement about whether this should occur on the basis of the Doha structure or with the aid of a new negotiating architecture. The declaration also points out that the members disagree on whether further topics should be put on the multilateral negotiation agenda.
From the outset the German industry has been one of the most active supporters of the multilateral process and the DDA. Before and during the 10th Ministerial Conference in Nairobi, BDI argued vigorously for concrete agreements to conclude the Doha Round. Unfortunately, a balanced conclusion of the DDA including market access for industrial goods and services was already regarded as unrealistic before the meeting began. BDI regards the decisions that were reached as an important sign that the WTO system is viable and that its members stand behind the multilateral trade system. Important multilateral impulses were generated for fair agricultural trade and integration of the developing countries into the global economy.
It is disappointing that it proved impossible to clarify the future of the DDA and the ongoing negotiation of existing and new topics. BDI believes that the WTO must address outstanding and new trade issues as quickly as possible and respond to the current challenges of the globalized world economy. This would include discussing and agreeing adequate international rules on the digital economy, on the growing volume of cross-border investment and on competition between private-sector and state-dominated companies. The crucial market access questions must no longer be ignored either. Future talks must adequately take into account the different development stages of the developing countries. However, special arrangements for developing countries must not lead to a situation where favoured WTO members are able to exempt whole sectors of industry from tariff reductions. The European Union’s goal must remain to fix the tariffs applied by emerging economies and developing countries at a low level. Beyond that, special treatment for developing countries must not be allowed to lastingly call into question the fundamental principles of the WTO (most-favoured nation, reciprocity, national treatment).