Critical Mass as an Alternative Framework for Multilateral Trade Negotiations

Abstract

The article posits that, over time, the sense of the World Trade Organization's so-called Single Undertaking has been perverted, and that the current interpretation requiring every WTO member to be obligated by all new Doha Round agreements is a major problem in the stalled negotiations. The authors' preliminary research supports the idea of conducting international trade negotiations in agriculture on the basis of a critical mass framework, where only those WTO members accounting for some nominated major percentage of trade would take on new obligations. The article recounts how this approach has worked before in the General Agreement on Tariffs and Trade (GATT) and the WTO, and suggests areas of further research in order to test the proposition with respect to agricultural trade. KEYWORDS: international negotiations, trade. World Trade Organization, agriculture, political economy. ********** The outcome of the Uruguay Round of multilateral trade negotiations contributed significantly to strengthening and unifying the international trading system. The World Trade Organization (WTO) and the so-called Single Undertaking of its members, wherein all are party to all WTO agreements, participate equally in decisionmaking, and safeguard their rights under a strong central dispute settlement system, is a unique and invaluable institution that is essential to the effective governance of the global economy. The continuing success of the system depends on the WTO being able to show that it can effectively discharge its three principal roles of overseeing the implementation of the trading rules (via multilateral surveillance of the committees and councils overseeing the agreements, the various transparency obligations embedded in those agreements, and the Trade Policy Review Mechanism, or TPRM), settling disputes among members, and serving as a forum for negotiation of new and improved rules and increased trade liberalization. At the time of this writing, the Doha Round of multilateral trade negotiations is in serious trouble. (1) The negotiators are years late in achieving the targets set out for themselves in the November 2001 declaration. In our view, a large part of the problem relates to the process and to the fact that a decision made in November 2001 to treat ''the conduct, conclusion and entry into force of the outcome of the negotiations as parts of a single undertaking (2) has been accepted by participants as meaning that all WTO members must be involved in and obligated by the outcomes in all areas of the negotiations. Given the economic diversity of the WTO's membership and the history of the organization, it makes little sense to expect the Single Undertaking approach to negotiations as it is currently understood to produce good outcomes. Even more important, such an approach does not need to be pursued in order to achieve an outcome with meaningful benefits for the global economy. In fact, insistence on the Single Undertaking approach will likely produce an inferior result in the Doha Round--if a result can ever be achieved on this basis. The problems with the current approach to the negotiations are particularly acute in the case of trade in agriculture--the sector universally regarded as the most significant element of the Doha Round. In this article, we outline a hypothesis that an alternative framework for international trade negotiations for agricultural products may be likely to produce better outcomes for agriculture and for future trade negotiations more generally. The argument of this article is as follows: 1. The WTO's Single Undertaking is valuable to the extent that it improves the adherence of developing and (especially) developed country members to all of the agreements. 2. But the Single Undertaking did not eliminate the contradictory treatment of reciprocal trade liberalization by the General Agreement on Tariffs and Trade (GATT). …