The World Trade Organisation’s (WTO) Doha talks are set to resume in Geneva on Thursday, after they broke down more than a year ago over failure to agree on market accessibility, tariffs and subsidies, said a source at the global trade body.
While many observers had considered the Doha Round to be dead, the source told Emirates Business on Wednesday low-level negations have been on-going and delegates have given themselves a tight deadline for the revival and expect to have a final text ready by February.
Sceptics, however, may note the talks, which began in the Qatari capital in 2001, have already missed two deadlines in 2004 and 2006.
The source, speaking from Geneva, said WTO members have prepared a number of revisions and new proposals and hope to finally produce “a compromise text, which up until now has prevented negotiations from being completed since 2001”.
Negotiators have kept the issues alive, the source noted, through backroom meetings and encounters at the January 2007 World Economic Forum in Davos, Switzerland. “There had been a lack of concrete figures, data and numbers to rely on but [once the figures were in] we started revisions in September 2007 and now they are talking,” the source added.
Sticking points in prior negotiations were subsidies in the United States and European Union (EU) to domestic farmers, the lack of access to EU markets and high tariffs on imports in developing countries, known as the G20 and led by Brazil and India.
The WTO source said a potential solution to the tariff issue in emerging markets will be to allow developing nations to declare limited categories of special products where higher tariffs could remain, while lowering duties on other goods.
Meanwhile, the official denied speculation delays in the talks’ resumption were due to upcoming elections in member states such as France, Brazil and the United States. “The French elected their president and then the Brazilians. Such news does not have any effect on whether the talks to resume or not. There were other obstacles and our work does not depend on countries’ internal matters. The same is true for the situation in the United States.”
Meanwhile, analysts have blamed the breakdown of the Doha talks on protective policies toward agricultural production, especially in powerhouses such as the US.
Daron Djerdjian, professor of economics at the American University of Sharjah, said from an economist’s point of view there should no subsidies, tariffs or limitations on market accessablity.
According to the comparative advantage theory, he said countries should focus on their strengths rather than futile and destructive protective measures – for example, the US should specialise in goods and services that use capital intensely, while China should try to capitalise on its massive labour supply. “Farm subsidiaries can create deadweight losses,” he added.
In Djerdjian’s opinion, agriculture was the main obstacle to the Doha Round.
The US has been demanding access for its products and lower tariffs to markets in developing countries and the EU. A September 2006 report published by the WTO after the last round fell part, said the US was demanding average tariff cuts of 66 per cent, while the G20 group of developing countries was willing to offer 54 per cent and the EU offered only 46 per cent, with signals it was willing to move up to 51 per cent for the right deal.
For its part, the EU has been pushing for more market space from the G20 with a fixed tariff of 15 per cent.
The Doha Round was started in November 2001 with the objective of meeting the needs of developing countries and improving their economies. Initially, WTO members hoped to reach a deal by 2004 but tense disagreements made that impossible.
Since 2004, there have been attempts to bridge the gaps between the parties, but WTO sources had expressed uncertainty about whether the talks would ever be successful. The Doha Round is the fourth WTO conference. The first was held in Singapore in 1996, the second in Geneva in 1998 and the third, which became infamous for demonstrations by anti-globalisation activists, was held in Seattle in the United States.
Many observers speculated that Qatar was selected as the location for the fourth conference as it was unlikely to see demonstrations like those in the US, which had badly shaken organisers.
While the Doha Round has yet to draw to a close, a fifth conference was held in 2003 in Cancun, Mexico and the sixth in 2005 in Hong Kong.
Thursday’s meeting in Geneva is intended “to show the talks are not over and that common ground can be found”, said the WTO source.
The WTO was established in 1995 and replaced the General Agreement on Tariffs and Trade (GATT), which had governed international trade since 1948.
With 151 members and 32 non-member states, the body carries tremendous clout.
Geneva talks hope to break Doha deadlock