ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Doha Round: In a Shambles

The failure of the Potsdam meeting of the trade ministers of the G-4 (the US, the European Union, Brazil and India) last week has been widely seen as heralding an impasse in the Doha round of the World Trade Organisation (WTO). In the immediate, the breakdown of the G-4 negotiations simply means that the July 2007 deadline set for arriving at a consensus on the “modalities” for the detailed negotiations on trade in agricultural commodities and industrial products is not likely to be met. Emerging from the deadlock in the talks, the US trade representative, Susan Schwab and the EU trade commissioner, Peter Mendelson began blaming the Indian commerce and industry minister, Kamal Nath, and the Brazilian foreign minister, Celso Amorim, for the impasse, and visa versa. Hiding his disappointment, and in a bid to demonstrate that the show was still on, the WTO’s director general, Pascal Lamy convened a meeting of the Trade Negotiating Committee, the steering group of the Doha round of multilateral trade negotiations, the very next day, June 22. Amidst the present din, what needs to be emphasised is that the principles of allowing less than full reciprocity to the developing countries and of according special and differential treatment to them have been not merely violated in this so-called development round of the WTO, the two rules of conduct seem to have been reversed in their application.

At the Potsdam talks, the US offered to “lower” its overall annual “trade distorting” domestic support measures to agriculture to $ 17 billion, even as the Indian and Brazilian ministers were quick to point out that the actual level of such subsidisation was around $11 billion last year. The EU offered to lower its agricultural tariffs by an average of around 50 per cent, but this did not take account of the lenient treatment it accorded to its “sensitive” products. In return, the EU and the US wanted India and Brazil to accept a coefficient of 18 for the developing countries in the so-called Swiss formula that is being used to cut customs duties for industrial products, even as they were asked to agree to a value of 10 for the developed countries’ coefficient in that formula.

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