I have yet to read someone pleased with the current WTO round being saddled with the title “Doha Development Agenda.” Some, like Joe Stiglitz and Andrew Charlton, argue that the name is misleading because the rich countries are not actually focused on development-friendly liberalization. Others believe that the moniker poisoned the negotiations from the start by giving developing countries reason to believe they might enjoy a “round for free” in which they would not have to liberalize their own trade barriers. In fact, each side is unhappy with the DDA because the other side interprets the phrase differently.

Joseph Francois is a member of the latter camp, but he thinks this clash is getting old:

If you surf the WTO website, Ministerial declarations, NGO news feeds, and the pronouncements of the alphabet soup of developing country blocks – G20, G33, LDCs, SVEs – you get the distinct impression that what matters is OECD concessions. Yet this focus on the OECD is an exercise in misdirection. Preferential access is not the key to trade-based growth… [R]ecent research suggests that preferences do not work as advertised, help parties they are not meant to help, and otherwise represent a triumph of form over substance…

If the OECD would resign from its role as scapegoat (scrapping industrial protection and then walking away), the South could then move past its post-colonial obsession with OECD import protection and finally take steps to place its own collective house in order.

Francois argues that the Doha round’s focus on an intransigent issue – agriculture – is damaging, and that WTO members would be best off declaring the round complete via some watered-down compromise and moving on to address more important issues, such as multilateralizing regionalism and promoting South-South liberalization.

I have yet to read someone pleased with the current WTO round being saddled with the title “Doha Development Agenda.” Some, like Joe Stiglitz and Andrew Charlton, argue that the name is misleading because the rich countries are not actually focused on development-friendly liberalization. Others believe that the moniker poisoned the negotiations from the start by giving developing countries reason to believe they might enjoy a “round for free” in which they would not have to liberalize their own trade barriers. In fact, each side is unhappy with the DDA because the other side interprets the phrase differently.

Joseph Francois is a member of the latter camp, but he thinks this clash is getting old:

If you surf the WTO website, Ministerial declarations, NGO news feeds, and the pronouncements of the alphabet soup of developing country blocks – G20, G33, LDCs, SVEs – you get the distinct impression that what matters is OECD concessions. Yet this focus on the OECD is an exercise in misdirection. Preferential access is not the key to trade-based growth… [R]ecent research suggests that preferences do not work as advertised, help parties they are not meant to help, and otherwise represent a triumph of form over substance…

If the OECD would resign from its role as scapegoat (scrapping industrial protection and then walking away), the South could then move past its post-colonial obsession with OECD import protection and finally take steps to place its own collective house in order.

Francois argues that the Doha round’s focus on an intransigent issue – agriculture – is damaging, and that WTO members would be best off declaring the round complete via some watered-down compromise and moving on to address more important issues, such as multilateralizing regionalism and promoting South-South liberalization.

I have yet to read someone pleased with the current WTO round being saddled with the title “Doha Development Agenda.” Some, like Joe Stiglitz and Andrew Charlton, argue that the name is misleading because the rich countries are not actually focused on development-friendly liberalization. Others believe that the moniker poisoned the negotiations from the start by giving developing countries reason to believe they might enjoy a “round for free” in which they would not have to liberalize their own trade barriers. In fact, each side is unhappy with the DDA because the other side interprets the phrase differently.

Joseph Francois is a member of the latter camp, but he thinks this clash is getting old:

If you surf the WTO website, Ministerial declarations, NGO news feeds, and the pronouncements of the alphabet soup of developing country blocks – G20, G33, LDCs, SVEs – you get the distinct impression that what matters is OECD concessions. Yet this focus on the OECD is an exercise in misdirection. Preferential access is not the key to trade-based growth… [R]ecent research suggests that preferences do not work as advertised, help parties they are not meant to help, and otherwise represent a triumph of form over substance…

If the OECD would resign from its role as scapegoat (scrapping industrial protection and then walking away), the South could then move past its post-colonial obsession with OECD import protection and finally take steps to place its own collective house in order.

Francois argues that the Doha round’s focus on an intransigent issue – agriculture – is damaging, and that WTO members would be best off declaring the round complete via some watered-down compromise and moving on to address more important issues, such as multilateralizing regionalism and promoting South-South liberalization.

Peter Gallagher thinks that unilateral reforms, not multilateral negotiations, deserve credit for our relatively liberal international economic order:

After thirty years of these stand-offs (Tokyo Round through Doha) it is past time to acknowledge that the multilateral trade round format doesn’t work. We cannot coordinate real changes in trade and investment policies by negotiation. Over and over again it appears that real changes arise only from autonomous measures such as those in Brazil and China in the late 80s and first half of the 90s; the EC (‘McSharry reforms’) in the first half of the 1990s; Vietnam’s and India’s first steps to liberalization in the mid-to-late 90s, and also reluctantly; ASEAN, Korea and Mexico in the late 90s. Attempts to wrench such changes from WTO Members in a round of negotiations has a very poor record of success and what changes are won come at a cost to the system.

Picking up on my use of medical metaphors to describe Doha last week, Simon Evenett describes the patient’s worsening condition:

India’s trade minister said the Doha Round was in intensive care last year; if that was the case then, now it appears to be in terminal decline…

The blame for this Round’s debacle lies squarely on the shoulders of WTO member governments, Mr. Lamy and the WTO secretariat should not be sacrificial lambs…

In past WTO negotiations, countries exchanged cuts in their bound rates. Since bound and applied rates were about the same thing, exporters in all nations had something to gain from pushing their governments to sign the deal. But now with so much unilateral reform, the proposals for bound rate cuts attract little support from exporters. Rich country exporters can ask: Why lobby for finishing Doha when you have already got the increased export opportunities for free?…

Indeed, while so many have been worrying about how the spread of regionalism and bilateralism in recent years has undermined the multilateral trading system, in fact many of the termites eating away at the Doha Round are associated with unilateral trade reform…

The Doha round is now almost dead. All that remains is for someone to discreetly turn the life support machine off.

If the Doha round’s collapse is seen as a loss for free traders, they may be victims of their own success.

Today’s non-news: “World trade talks collapse in acrimony” by Alan Beattie.

It’s tough to pull off a track stand. The Doha round is falling over, says Simon Evenett:

It was bad enough when the Doha Round of trade negotiations was deadlocked; now there are dangerous signs that what progress has been made is unravelling. Over the past four weeks the leading trading powers have moved backwards from a number of established positions. Either senior trade negotiators are planning an extraordinarily welcome summer surprise or they are positioning themselves for the blame game when the music finally stops.

Evenett is disturbed by this state of affairs, arguing that Doha needs to be completed before the US presidential election in 2008, as trade liberalization never does well on the campaign trail. He says “procrastination is a luxury WTO members cannot afford.”

On the other hand, procrastination looks like the most likely outcome. I doubt any serious progress will be made this summer. And so does Evenett, I suspect, given that most of his column reads more like an autopsy than a prescription to save the patient. Many are already thinking of the aftermath:

[S]talemate looms. Much depends on how the associated media game is played. Maybe a graceful way will be found to conclude the negotiations without an agreement? Maybe senior trade negotiators and WTO officials will argue for continuing the talks after an 18-24 month hiatus? Or will the talks collapse into irreparable acrimony? Much depends on how the major trading powers fancy their chances at the “blame game.” Indeed, I often wonder if the current tactics of some trading nations are aimed at completing the Doha Round or aimed at positioning themselves for the next multilateral trade negotiation.

Read the full piece for a number of insights into the last month or so of trade (non-)negotiations.

[Apologies for mixing bicycling and medical metaphors throughout. I blame Tom Friedman. 🙂 ]

The Bush administration is taking heat from WTO negotiators for standing by its October 2005 proposal to limit its farm subsidies to $22 billion, as it only paid about $15 billion in subsidies last year. With that much room to spare, the US could easily make a more generous offer in an attempt to restart the WTO negotiations. On the other hand, trading partners are well aware that the first $7 billion in cuts offered by the US won’t actually improve their lot.

Chad Bown, of Brookings and Brandeis, proposes a bold move:

[T]he United States needs to take a stand by halting all of its remaining bilateral trade negotiations as a step towards a good-faith effort to rekindle the multilateral Doha negotiations. This action would signal leadership and commitment to successfully pursuing and completing the Doha round, which holds the greatest potential for substantial increases in well-being both at home and abroad.

I recommend reading the full piece, in which Bown attacks recent US trade policy efforts as anti-China maneuvers. He gives no quarter to the US-Korea FTA, characterizing it as a policy discriminating against Chinese imports rather than freeing trade.

Would Bown’s proposal suceed in rejuvenating the Doha round? Informal meetings over the last couple months haven’t produced any new momentum, and yesterday’s announcement of a new deadline (end of 2007) does little to inspire confidence in the DDA’s vitality. It may take something quite radical to revive it.

Update: Corrected spelling of Bown. I regret the error.

Ecuador is challenging the EU’s preferential treatment of ACP countries and has secured a WTO investigative panel.

The G33 have offered to halve the number of criteria used to identify agricultural products exempt from tariff cuts, but it remains to be seen if that would lead to a reduction in the number of products exempted.