Delivering on Doha's promise

LEADERS
Trade talks

Jan 6th 2005
From The Economist print edition

2005 will be a vital year for free-trade talks

THE Doha trade round was supposed to be finished by now. When the world's trade ministers launched the global trade talks in November 2001, they promised to conclude them three years later. By the end of 2004, there was to be an ambitious agreement on freeing trade in farm goods and services, with the emphasis on helping the poorest countries. Three years on, that deal is nowhere in sight.

The delay is unfortunate, but unsurprising. No global trade round has stuck to its original schedule—the Uruguay round launched in 1986 took almost eight years. The danger is that the Doha round is not just delayed, but diluted in its ambition. There is a shocking disconnect between the high hopes that launched the round and the grubby reality of the talks so far.

In farm trade, for instance, poor countries urgently need better access to rich-country markets for their farm products. Yet, so far, this is where the Doha talks have achieved the least (there has been more progress on cutting domestic support and eliminating export subsidies). Poor countries can reap large economic benefits from opening their markets to each other. Yet discussions about how to reduce barriers for industrial goods—which are far higher in poor countries than rich ones—are at an impasse, thanks largely to the intransigence of big emerging economies, such as India and Brazil. These countries are loth to make “concessions” on industrial tariffs until they see more progress in farm trade. Rich countries are loth to do more on farm trade until they see progress in talks on industrial goods and services.

For the Doha round to succeed, this mercantilist mindset needs to change, and quickly. Although there is no formal date for concluding the negotiations, 2006 is a widely agreed deadline since George Bush's fast-track negotiating authority runs out in 2007. Trade ministers will therefore need to have at least a skeleton agreement in agriculture, industrial goods and services by December 2005 when they gather in Hong Kong for the World Trade Organisation's biannual meeting.

America AWOL?

Unfortunately, there are several reasons to fear that the Doha negotiators will not get there. Breaking the current impasse will require committed political leadership, and that may be in short supply this year. America, the WTO's most important member, will be distracted: Mr Bush has barely mentioned trade since his re-election. The administration faces a tough battle over the Central America Free Trade Agreement, which has been signed, but not yet ratified, by Congress. Robert Zoellick, Mr Bush's respected trade representative, is likely to move to the State Department, leaving a hiatus.

Another danger comes from uncertainty about the leadership of the WTO itself. Supachai Panitchpakdi, a Thai who is the organisation's current boss, ends his term in August. Four candidates have been nominated to replace him. The world's trade ministers must decide on one of them—by consensus and by May 31st. Previous such races have been rancorous affairs, paralysing and poisoning the atmosphere. For the sake of the Doha round, the WTO needs to decide quickly on a strong leader, someone who can prod the world's trade ministers to live up to the ambitions they promised at Doha. With renewed political commitment from both rich and poor countries, the Doha round could still achieve its goals. The world's poorest deserve no less, yet politicians could once again fail them.

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