WTO talks on ‘brink of failure’: Lamy
The Doha round of global talks aimed at expanding free trade is on the brink of failure, World Trade Organisation chief Pascal Lamy warned on Friday, with experts signalling that a collapse could even threaten the WTO.
Lamy added to the gloomy atmosphere that has prevailed in recent weeks after negotiators met at WTO headquarters in Geneva to take stock of their most recent attempts to overcome a decade of deadlock.
“My frank assessment is that under the right conditions of temperature and pressure a deal would be doable… were it not for NAMA (Non Agricultural Market Access, or industrial goods),” the WTO director general said.
“The magnitude of the gaps among the major players is effectively blocking progress in other areas and is putting in serious doubt the conclusion of the Doha Development Round this year.”
“This round is, once more, on the brink of failure,” Lamy added.
Despite the range of reasons given for the deadlock, from criticism of the conditions under which the negotiations were launched in the Qatari capital Doha in 2001 to help developing countries, the expanding membership of the now 153 nation WTO, objections to globalisation or protectionism and the economic crisis, Lamy insisted that main obstacle was much more basic.
“Closure on the remaining open issues is blocked because of a classic mercantilist issue: tariffs on industrial products, the bread and butter of WTO negotiations since their inception,” 60 years ago, he explained during the meeting.
Lamy has repeatedly expressed doubt about future of Doha this year, after several missed deadlines and failures over the past decade.
Those hurdles nonethless did not stop the talks on expanding existing global free trade accords from carrying on in some form, weathering the changing political climate in major trading powers such as the United States, European Union and emerging nations.
In January, some political leaders repeated their call for the conclusion of the round in 2011, with British Prime Minister David Cameron warning that “we cannot go on after a decade with another year” of negotiations.
Decisions at the WTO must be carried by a consensus of all the member states.
US trade ambassador Michael Punke called Lamy’s assessment “sobering,” in remarks released by the US Trade Representative, but suggested that the gaps — which also pit the United States against the EU on farm subsidies — were even more wide ranging.
“We do not agree with the suggestion in the report that if we could work out our differences in NAMA, then other areas of the negotiations would simply fall into place,” Punke explained.
“As we pointed out at the last meeting, fundamental differences also exist with respect to agriculture and services,” he added.
Punke insisted that the United States “has not given up on Doha, but we believe the negotiations, and the WTO more broadly, cannot avoid hard truths.”
Former WTO chief Peter Sutherland and economist Jagdish Bhagwati warned in a report commissioned by the trade watchdog early this year that a failure of Doha would seriously damage its credibility.
“I think there is very, very little chance that Doha could be concluded this year, which would put it off for ages,” said Jean Pierre Lehmann, a professor at the IMD business school in Switzerland.
“In fact it is very unlikly that Doha will eventual be condluded at all,” he added.
Lehmann claimed that would “open the door to protectionism” and could harm economic growth.
Joost Pauwelyn of Geneva’s Graduate Institute said a continued proliferation of fragmented region free trade agreements, rather than a a multilateral approach based around the WTO, “would mark the end of the WTO as a centre of trade.”