Supachai Panitchpakdi: Why Doha must help development

The next few months will have a big impact on the global trade round. The most difficult negotiations are still to come and many issues are contentious. Supachai Panitchpakdi, director-general of the World Trade Organization, outlines his trade and development agenda and his hopes and fears for the talks – Meeting deadlines is a crucial feature of every trade negotiation. Deadlines are an extremely useful part of the negotiating process because they focus the minds of negotiators and force governments to confront a choice between compromise or crisis. Quite often it is only at the eleventh hour that positions shift and gaps between countries are narrowed. This is because the fear of failure lurks in the back of every negotiator’s mind. Failure to meet deadlines can often have a devastating effect on all those involved in the process, leading to recriminations that can damage international relations beyond the trade sphere.

The choice between compromise and crisis now confronts negotiators from the 144 member governments of the World Trade Organization (WTO). Ministers meeting in Doha, Qatar, agreed in November 2001 to launch a broad round of negotiations called the Doha Development Agenda (DDA) with a deadline of January 1, 2005. Given the complexity and political sensitivity of many of the areas of negotiation, this deadline is ambitious but achievable. Between now and 2005 there are several intermediate and short-range deadlines. The likelihood of attaining agreement on the round by the deadline rests on whether governments are able to meet the intermediate and short-term target dates that are part of the DDA programme. The first half of 2003 will provide a clear picture of governments’ willingness to narrow positions, which are currently widely separated.

Four important deadlines loom in the coming months:

• March 31 for agreeing a specific outline for further negotiations on agriculture;
• March 31 for putting services offers on the table;
• May 31 for agreeing the procedures for cutting industrial tariffs;
• and May 31 for agreeing on reforms to the WTO’s Dispute Settlement Understanding (DSU).

Then our members will face further important deadlines when they meet in Cancún, Mexico, for our fifth ministerial conference, September 10-14, 2003. At that conference governments will decide how, and even whether, to begin negotiations on the Singapore issues, which include trade and investment, trade and competition, transparency in government procurement, and trade facilitation. To date, governments have done well in meeting their intermediate targets. After Doha, governments quickly agreed on the structure of the negotiations, chose able chairpersons to lead the various negotiations, selected a venue for the next ministerial conference and began the tough negotiations on matters of substance. Discussions on WTO rules, on trade and the environment and on reforming the DSU have progressed well so far. But the most difficult negotiations are still to come.

Agriculture is clearly seen as the centrepiece of these negotiations by a large number of WTO member governments from developed and developing countries. Ambitions are high on one side of the debate and correspondingly low on the other. From a development perspective, agriculture is one of the most important areas of these negotiations.

There is no question that developed country subsidies and import barriers are detrimental to development programmes around the world. It is essential that governments deliver on commitments made by ministers in Doha. This will require much greater flexibility and participation than we have seen so far. Failure to agree on clear-cut guidelines for these negotiations by the end-of-March deadline would pose problems not just for the agriculture talks but for the round as a whole, since many countries have already linked progress in other areas with movement in agriculture. After a slow start, negotiations on nonmarket access have picked up and are now moving at a good pace.

Many governments have said that there should be a high level of ambition for these negotiations. I agree. It is also critical that we maximize the potential for development in these talks. This means taking into account the very damaging effects that tariff peaks and tariff escalation have had on developing countries, and it means addressing concerns in the developing world about the future of trade preferences. But it also means lower barriers to trade between developing countries. Trade between developing countries has long been stymied by barriers to agriculture and textiles, for example, which are even higher than barriers to those products in the developed countries.

Of the negotiations conducted so far, services have been perhaps the most successful. Solid progress has been made and developing countries are participating fully. The autonomous liberalization of trade in services offers great potential for developing countries, which need to enhance the communications and financial infrastructure that underpins modern economies. But to benefit from such liberalization, developing countries need technical assistance so that they may participate as fully as possible in the negotiations. Although we are providing such assistance, it is clear that more will be needed. The maximum substantive participation in these negotiations would be in the interests of all member governments. It is important to point out that, well as these talks have progressed, the DDA is a single undertaking. That means that no element of a package can be agreed until all elements have been agreed. We must ensure that linkages are drawn in a positive and not a negative manner.

In my view, achieving progress in the services negotiations will facilitate progress in other areas such as agriculture. The Singapore issues have been part of our agenda since the Singapore ministerial conference in 1996. Each of the four issues has been the subject of a working party in which members have discussed these matters in depth. The working parties have been in the nature of a learning process that has been to the benefit of all members. The question now is whether governments will take the next step and begin negotiations in these areas. There is disagreement among members on this point, because the Doha Ministerial Declaration states that “negotiations will take place after the fifth session of the ministerial conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations.” It is clear that such differences need to be resolved.

It is equally clear that technical assistance will need to be provided to developing countries on a continuing basis if there is to be any prospect of these talks starting. Another irrefutable point is that progress in these areas will be linked closely to progress in other aspects of the DDA. If all areas do not move forward together, there is a strong likelihood that they will all be held back. There is another factor that needs to be considered – the proliferation of regional trade agreements (RTAs) and their impact on the global trading system. More than 250 RTAs have been notified to the WTO and its predecessor, the General Agreement on Tariffs and Trade. Of these, some 129 were notified after January 1995 and more than 170 are currently in force. RTAs can assist in building and strengthening the global trading system. But by their very nature such agreements are discriminatory. If the distortions present in many RTAs are not sharply reduced, the benefits of such arrangements may be undercut. Moreover, the surge in RTAs could threaten the multilateral process unless WTO rules are strengthened.

If the primacy of the global system is not preserved, the smaller and weaker countries will be most adversely affected. They simply do not have the resources to conduct multiple sets of negotiations concurrently, nor do they have the economic muscle needed to negotiate from a position of strength. I urge members engaged in regional negotiations not to lose focus on the Doha round. As part of the Doha package, members are looking to strengthen rules and the discussions have progressed reasonably well.

But more needs to be done.

The overarching principle to bear in mind as we move towards Cancún is the need to make progress across a broad front, so that no one feels they have to give too much in any one area. This means regularly reviewing progress across the board in these negotiations through the trade negotiations committee, which oversees all the negotiations. It also means respecting all the deadlines we have before us.

Supachai Panitchpakdi
Dr Supachai Panitchpakdi is director-general of the WTO. An economist with much experience in trade negotiations, he was deputy prime minister and commerce minister of Thailand and played a crucial role in leading the country out of its worst economic crisis in 50 years.