Hope for positive developments in Doha round negotiations

The WTO’s ninth Ministerial conference is scheduled to take place in December this year. Once again efforts are underway to make this more meaningful than the previous meeting.

The Doha Round has been dragging on appearing to be forever and ever and if the credibility of the WTO in this area is to be retained, some positive results will have to be seen at the Ministerial Conference this year.

The trade negotiations committee which met in December has indicated some positive developments in this regard and in the words of the Director General, the meeting showed that members were fully aware of their responsibility and the importance of what is at stake and the tone was “one of caution, but also of realism and determination”.

In the current situation of a gloomy global economy with the even the economies of the emerging economies slowing down last year, a successful conclusion of the Doha Round while reinstating confidence in the multilateral trading system would definitely be a boost to the world economy. The global economy can improve if there is more trade with increased trade facilitating measures to counter the slowdown.

The Director General at a recent meeting in Bangladesh had stated that the cost of trading across borders is estimated at $ 2 trillion and a further breakdown shows that 15% of these are tariff barriers while 10% is as a result of border and customs procedures.

By removing the barriers to trade and cutting down the red tape, WTO’s view is that a multilateral Trade Facilitation Agreement could stimulate the $ 22 trillion world economy by more than one trillion dollars. In such a situation, the regional and global value chains, which have to cross different borders several times in their production and distribution, will benefit immensely.

According to the WTO, the impact on reducing supply chain barriers in South and Central Asia could increase exports by 65% and imports by 49%.In this context, the good news emanating from WTO corridors is that there has been some progress in trade facilitation negotiations.

Agriculture negotiations are also supposed to be showing some progress with new proposals towards closing the gap. In the area of Government Procurement, parties to the agreement adopted the results of the renegotiation of the agreement which would entail significant market access commitment which will benefit business, key element of the agreement being ensuring fair and transparent competition in public procurement.

There is also progress in the expansion of the Information Technology Agreement. ITA 2 is expected to expand the list of products covered by the agreement. In the services sector, a group of members are working on trying to achieve further services opening. Although some of the more important emerging economies who are important players in this sector are not in the group, this might be a beginning of some future developments in this sector.

Undoubtedly, the conclusion of the Doha Round would be of immense benefit in reducing barriers to trade. Although an entirely successful conclusion in all areas does not seem possible at this stage, if at least there could be agreement in some sectors, it would be a positive sign.

The importance of the WTO to the multilateral trading system cannot be underestimated with more members acceding, taking the membership to 159 at present. Between now and the end of the year, when the 9th Ministerial conference takes place, there is hope that there will be some positive developments in the Doha round negotiations.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)