is the subject of my Trade Tripper column this Friday-Saturday issue of BusinessWorld:
The focus of the trade world now is Doha. And just to show how freakishly convoluted trade talks are, the arguments currently revolve around whether Doha is "dead" or not, or whether one should go for "full" Doha or Doha "lite." If the general public nowadays doesn’t give a damn about it, I sometimes imagine because it was planned to be that way by trade experts, what with their endlessly monotonous declarations that could make an insomniac owl go to sleep.
Doha can’t be dead. As Jagdish Bhagwati pointed out: "if Doha was dead, one had to ask why the negotiators were still negotiating, and why nearly all G-20 leaders were still issuing endorsements of the talks each time they met." Indeed, the issue is not the death of Doha but rather how to end it. One way or another, Doha will be closed and it’s the manner of its conclusion that will (don’t ask me why) determine the future of the World Trade Organization.
Indeed, what is ominous is the fact that people from the developed countries are beginning to voice out something they were quiet about before. It’s something I’ve long suspected that they don’t like about the Doha Round: its "developmental" aspect. As reported in Reuters, one commentator, speaking under anonymity, said: "A development agenda should never have been introduced into the WTO in 2001. The WTO is about mercantilist interest, and there is no space for philanthropy. It’s dog-eat-dog according to a set of rules. You’re either a player or you’re not a player, and if you are not a player, you should get out of the way."
While definitely betraying a wrong appreciation of what the WTO stands for (a mere reading of the preambular provisions of the WTO Agreements would point this out), nevertheless, the comment does reveal the thinking behind some of the developed country calculations: launch a round with some nice motherhood statements, let the developing countries flounder in their under-resourced and unorganized way through the talks, conclude like Uruguay, and developed rich countries happy again. Unfortunately, the developing countries were apparently not given copies of the script. Learning from the Uruguay Round and gaining further experiences from Cancun and Hong Kong, the poorer countries learned to stand their ground and maintained focus.
The fact is, the poorer countries got so good at playing the WTO game that now commentators from the richer countries are floating ideas about letting the WTO "die." For instance, Daniel Altman of Newsweek gleefully calls for "good riddance" to the WTO, saying that "trade negotiations would actually go much further if the WTO simply closed down its talks altogether." His argument essentially is that "this is where the future of free trade lies: in pragmatic regional deals, not utopian global ones ... The majority of nations can simply leave the obstructionists behind and move forward with regional trading partners. Eventually, most of the world’s trading nations will arrange themselves into just a few big blocs."
All this sounds good, rational even. But for a developing country like the Philippines, it should be disconcerting. The argument above is designed to benefit developed countries. For developing countries, with its limited resources, the reverse is true. For the simple reason that free trade agreements are not free. Their very nature and number provides for an increasingly complex international trading system. Considering the concerns raised regarding the Philippines’ capacity to keep up with its multilateral trading commitments, this obviously would be multiplied in view of the inevitable proliferation of FTAs should the WTO indeed be waylaid. Among areas of concern would be the varied ROOs, dispute settlement jurisdictions, customs procedures, SPS and TBT measures, and -- perhaps -- smuggling.
Even the jewel of the WTO, its dispute settlement system, Professor Bhagwati insightfully maintains, would be rendered null: "the willingness of WTO members to invoke the Dispute Settlement Mechanism, the pride of the WTO -- and, indeed, of international governance -- would also be sapped. Tribunals established within PTAs ["Preferential Trade Agreements"] would take over the business, leading to the atrophy, and eventual irrelevance, of the DSM."
The foregoing are also the reasons why Doha should not be allowed to fail. Indirectly, they’re also the reasons why we can’t allow Doha "lite." The reasoning behind the latter seems to be that "something is better than nothing." And the answer to that is: "a something that does nothing is still nothing." Doha lite focuses on less-developed countries, with minimal mention of the concessions for developing countries (which include the Philippines). As Professor Bhagwati pointed out: "in multi-faceted talks that straddle several different sectors (for example, agriculture, manufactures, and services) and diverse rules (such as anti-dumping and subsidies), countries have negotiated concessions with one another in various areas. Whatever balance of concessions has been achieved would unravel if we were to try to keep one set and let go of another."