Doha Round Suspension and MDGs
Published: The Rising Nepal, 3 January 2007
By: Kamalesh Adhikari


At present, the World Trade Organisation (WTO) is passing through a critical juncture. Since July 2006, the Doha Round of multilateral trade negotiations has been suspended with no certainty on when the talks will resume. After trade ministers from Australia, Brazil, the European Union (EU), India, Japan and the United States (US), the so-called G-6, failed to bridge differences in July, WTO Director General (DG), Pascal Lamy had no choice but to recommend the suspension of trade negotiations.

While stating a bitter reality that the Doha Round of trade negotiations would not be completed by the agreed deadline, i.e., the end of 2006, he, however, also indicated that the suspension of talks in all subjects across the Doha Round as whole is also meant "...to enable the serious reflection by participants which is clearly necessary. Time-out to review the situation, examine available options and review positions". The developments taking place in Geneva and in particular, the 'political developments' taking place in the US do not, however, indicate that the time-out will come to an end in the near future. Given this scenario, it is important to note some of the implications of the Doha Round suspension on international trade and development objectives of WTO Members, mainly the developing and least developed Members.

The suspension of talks has raised fears that the potential 'global gains' from the trade reforms under the Round will be lost. Instead, if the suspension turns out to be prolonged or permanent, an increase of disputes (e.g., agriculture protectionism, non-tariff barriers etc.) in a number of areas of international trade - which could have been addressed within the Doha Round - is imminent.  Also, there is a greater possibility that many developing and least developed Members will have to compromise with their 'policy flexibility' and 'development space' since developed Members often tend to squeeze them through bilateral and regional trade deals. The suspension of negotiations should not, therefore, be seen only from the perspective of adverse effects it will bring in international trade. The impasse has also generated additional challenges, mainly for developing and least developed Members, in attaining the Millennium Development Goals (MDGs).

MDGs and Doha Round

MDGs embody partnership between developed and developing countries. The Millennium Declaration is an historic agreement, in which developing and least developed countries have committed to work to maintain sound economies, address human and social needs and ensure development; and developed countries have agreed to support developing and least developed countries through aid, trade and debt relief. The eighth development goal - MDG 8 (Global Partnership for Development) - identifies ways through which developed countries are required to help developing and least developed countries in achieving the other seven goals. This Goal calls for more official development assistance; measures to ensure debt sustainability in the long term; an open, equitable, rules-based, predictable and non-discriminatory multilateral trading and financial system; and measures to address the special needs of least developed, landlocked and small island developing states.

The Doha Round had, indeed, generated aspirations and shown indications that the 'development dimension' of the Round would help developing and least developed Members to use trade as a means to achieve their development goals. The United Nations World Summit in September 2006, while reviewing the progress made towards achieving MDGs by 2015, had also highlighted the importance of the 'development dimension' of the Doha Round in attaining MDGs. The Summit had emphasised that the Round needs to "produce rules that tackle long-standing unfair and unbalanced trade practices by improving market access for poor countries; focus on agricultural trade and reduction in agricultural subsidies; and revisit agreements and negotiations that limit the policy space available to developing countries".

Resumption of Doha talks

The Doha Round negotiations are critical in reaching agreements on issues such as agricultural protectionism, market access, Mode 4 (movement of natural persons) liberalisation, access to medicine, access to and transfer of technology, special and differential treatments etc. The indicators under Goal 8 also call developed countries to make development-friendly decisions on these issues.

Ever since the launch of the Round, some initiatives have been taken to address these issues. For example, some notable decisions on the issue of patents and access to medicine have been made in favour of poorer Members. At the Hong Kong Ministerial in December 2005 also, decisions were made on duty-free and quota-free 'market access' for the least developed countries and 'aid for trade' for developing and least developing countries. However, the suspension of the talks has now made it impossible to hold 'formal' discussions, undermining the scope of coming to consensus on issues of divergence.

This will surely affect MDGs as the impasse will not merely restrict developing and least developed Members to make international trade work for their development but developed Members too would not be obliged to implement their commitments that are crucial for helping poorer Members to derive 'developmental benefits' from international trade. Hence, WTO Members must realise that by not coming to consensus on Doha Round issues, they are making two major mistakes. First, they are working against the spirit of the so-called development-centered multilateral trade reforms and second, they themselves are creating additional barriers to achieve Millennium development targets.