From Seattle to Hong Kong: Are We Getting Anywhere?

Abstract

With agricultural trade negotiations deadlocked, the Doha round of trade talks may appear dead in the water. But every round of trade talks in recent memory has oscillated between near breakthroughs and near breakdowns. Trade negotiations can be like a ride on a roller coaster but, while the roller coaster returns to where it started, multilateral trade negotiations have generally gone on to close successfully. Will this happen with the Doha round? Surprisingly, the answer is yes. Prospects for concluding the round in Hong Kong next month, at the World Trade Organization Ministerial meeting, are indeed bleak; but not the prospects for finishing later. While the initial attempt to launch the WTO's first round of multilateral trade negotiations in Seattle in November 1999 collapsed, the round was finally launched in Doha, Qatar, two years later, with reaffirmation of the twin virtues of democracy and openness to the world economy. While there was a lot of dissent in September 2003 at the next WTO meeting in Cancun, which also collapsed because of the lack of consensus especially on agricultural liberalization, there were nonetheless some important accomplishments in the tabling of most of the “Singapore issues” and an agreement to relax the TRIPS Agreement to permit developing country access to low-cost pharmaceuticals. Cancun was also a turning point insofar as the major developing countries coalesced in the Group of 20 to provide greater balance in the WTO membership and the design of the negotiating agenda. While it appears that agricultural liberalization is still a significant stumbling block facing the Hong Kong Ministerial, it is likely that the EU can be squeezed if there are reciprocal offers in manufactures and services that are forthcoming especially from some of the major developing countries that can be induced to liberalize in their own interests. It will also be helpful if a program of adjustment assistance can be devised in the form of “aid for trade” especially for low-income countries. The outlines of a deal to close the Doha Round are therefore clear. With forceful leadership on the part of Pascal Lamy to rescue the Doha Round in Hong Kong and to convince the WTO member states to follow with an extraordinary meeting within six months, it should be possible to take the penultimate steps to bring the Doha Round to a final conclusion by the end of 2006 and to obtain its approval by early 2007 before the U.S. fast-track negotiating authority expires. Jagdish Bhagwati is Senior Fellow in International Economics at the Council on Foreign Relations and University Professor, Economics and Law at Columbia University. He was Economic Policy Adviser to the Director General of GATT and of the WTO-appointed expert group that recently reported on The Future of the WTO. He is currently a member of the Eminent Persons Panel on Enhancing UNCTAD’s Impact and of UN Secretary General Kofi Annan’s Advisory Group on the NEPAD process in Africa. His latest books are Free Trade Today (Princeton, 2002) and In Defense of Globalization (Oxford, 2004).