Sixty-first General Assembly

Second Committee

Panel Discussion (PM)

collapse of doha round would reduce World Trade Organization

to trade litigation forum, Second Committee told

 

Panellist’s ‘Free-Riders’ Remark Riles Developing-Country Delegates

If the Doha Round of trade talks were to fail, the World Trade Organization would be reduced to nothing more than a trade litigation forum, the Second Committee (Economic and Financial) heard this afternoon during a special panel discussion on “Negotiating Doha”.

The panel involved Pascal Lamy, Director-General of the World Trade Organization; Gary Hufbauer, Reginald Jones Senior Fellow at the Institute for International Economics in Washington, D.C.; and Carlos Correa of the University of Buenos Aires in Argentina.

Mr. Lamy kicked off the discussion by saying that Europe and North America must engage in some “political heavy lifting” to prevent the failure of the important talks.  “Negotiating positions are not that far apart in technical and economic terms, but closing the gaps is proving to be a complex political deal for the World Trade Organization’s member Governments,” he explained.  Indeed, each of those Governments faced an anxious public that believed open borders would bring a loss of national identity and security.

He recalled that Brazil, China and India had succeeded in using their influence to eliminate managed trade in textiles and clothing in the earlier Uruguay Round of the General Agreement on Tariffs and Trade (GATT).  With their sights now set on eliminating agricultural protectionism, those same countries would play a central role in deciding how the Doha Round would be concluded.

As the world’s fastest growing economies, Mr. Lamy said, they held one of the most valuable prizes that the Round had to offer:  improved access to markets for their goods and services.  “There is no question of them rolling back, nor of them standing still.  I am convinced that they are prepared to use [their immense leverage] to make contributions to concluding the Doha Round,” he added.

Mr. Hufbauer warned that, if the Doha negotiations did not resume while the President of the United States still exercised his Trade Promotion Authority -- set to expire in July 2007 -- the next earliest date for the resumption of international trade talks would be 2010, during that country’s next election cycle.  But if they were to resume and then fail, the World Trade Organization would be reduced to a dispute-settlement mechanism, and litigation was a poor substitute for negotiation in bringing down trade barriers.  As a possible solution to the current stalemate, the World Trade Organization chief should issue his own package of solutions as a foundation for fresh negotiations in 2008-2009.

He went on to describe Brazil, China, India, Indonesia and South Africa as “free-riders”, benefiting handsomely from open world markets while resisting widespread liberalization of their own markets.  The least developed countries were also unwilling to open their own markets, even to each other, while demanding duty-free access for their goods in developed-country markets.

Those comments drew the ire of several delegates, including the representative of Benin, who stressed that the least developed countries should receive special treatment precisely because they were the “least developed” of all nations.  It was developed countries that had failed to respect their commitments.

Earlier in the discussion, Mr. Lamy said that adjustment costs to liberalization in the least developed countries could not be resolved through national-budget or private-sector action alone.  Indeed, managing public support for trade expansion in those countries meant training officials, strengthening institutions and building infrastructure that would help businesses grow, provide consumers with cheaper goods and services of better quality, and enable all those countries to expand and diversify their trade.

For that reason, he advocated the launching of a debate on “Aid for Trade”, as well as a substantial increase in funding for that initiative.  While Aid for Trade was not contingent on the Doha Round, its value would increase greatly if it was implemented in conjunction with substantial new market access opportunities and new rules to facilitate trade.

A third panellist, Mr. Correa, added that World Trade Organization agreements on the Trade-Related Aspects of Intellectual Property Rights (TRIPs) had made the technological catching-up process difficult for developing countries.  TRIPs was not meant to prevent members from taking measures to protect public health, yet it had precisely that effect.  Neither had the agreements generated much technology transfer to developing countries, which was important to resolving that issue.

In the ensuing discussion, several delegates asked what the United Nations could do to help end the World Trade Organization stalemate, with Pakistan’s delegate wondering whether the global body should consider a new design and execution for future multilateral negotiations.

That prompted Mr. Lamy to reiterate that deadlocks in negotiations were brought about by political, rather than procedural, reasons, and the United Nations was the best place to assess the impact of unbalanced trade system.

Moderating the discussion was José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs, who stressed the World Trade Organization’s “public good” value as a framework for facilitating the growth of international trade.  It had come a long way from the days of the Uruguay Round -- in which Mr. Ocampo, then Colombia’s Agriculture Minister, had participated -- and in which developing countries had not even been present.

Amid all the talk of impending failure, it was Mr. Hufbauer who sounded a note of optimism in his presentation, saying:  “Every past negotiation has failed before it finally succeeds.  If Doha truly flops, it will be a first.”

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For information media • not an official record