is the subject of my Trade Tripper column in this Friday-Saturday issue of BusinessWorld:
Creeping behind the headlines of the Cybercrime
Law, the RH Bill, of Cabinet appointments, controversies involving
anti-narcotic officials, and all those emotional commentaries about the
dark and absolutely anti-progressive days of martial law, news of Doha’s
seemingly inevitable demise is relatively untold. That Doha is passing
unmourned is ironic, particularly when one remembers what it was all
about.
The Economist seems to have made the call already
(“Goodbye Doha, hello Bali”; Sept. 8, 2012): “Instead of allowing the
Doha round to be replaced with a patchwork of regional deals, the WTO’s
boss, Pascal Lamy, should close it and resurrect the best bits in a
‘Global Recovery Round.’ He should drop the all-or-nothing ‘single
undertaking’ rule that helped kill Doha. Instead, talks would be broken
up into small chunks and allowed to progress independently of one
another. Negotiations would be open, so that any member could leave or
join. Some deals, therefore, would not include everyone.”
This, at first glance, seems like a good thing. But as readers of
this column know, your Trade Tripper has never been a big supporter of
FTAs for the Philippines. They are too trade distorting, skewed against
the poorer countries, very complex arrangements that, with the expected
and is happening “noodle bowl” effect, simply makes it impossible for
developing countries’ bureaucracies to protect themselves from technical
smuggling (let alone find ways to take advantage of FTA provisions).
That is why it should be no surprise that, after 30 years of the AFTA’s
effectivity, a relatively recent working ADBI paper (FTAs and Philippine
Business: Evidence from Transport, Food, and Electronics Firms) found
that only around 20% of the companies surveyed here in the Philippines
have taken advantage of its preferential rates.
To let Doha go in favor of FTA’s is clearly a non-choice. As
Columbia University’s Jagdish Bhagwati said in a New Delhi interview:
“If we let Doha collapse, we will be overtaken by regional trade
agreements and other bilateral arrangements, which will be
discriminatory, where the weaker sections would not prosper and
hegemonic powers like the Americans and Europeans would establish trade
deals with smaller powers and would dominate trade in their own way,
which is not possible in a multilateral system.”
Writing for Handelsblatt, Bhagwati goes on to name Doha’s
killer: the United States. Or, more specifically, the Obama
Administration. As he put it: “the US killed Doha. Or at least put into
Intensive Care... it was killed by President Obama who had ironically
been awarded the Nobel Peace Prize by Norway in the expectation that he
would promote multilateralism and turn his back on US unilateralism!”
Unfortunately, “the US, not content with killing Doha, is even promoting
the regional PTA called the Trans-Pacific Partnership, compounding its
folly twice over. In the absence of MTNs like Doha, these PTAs will also
become the arrangements where rules such as anti-dumping and subsidies
codes will be set and will then be muscled into WTO at Geneva.”
But neither is a “Global Recovery Round” a welcome alternative.
It merely shifts emphasis on developing country needs to assisting the
world’s leading economies get back on their feet. It seems to be working
on the quite convenient theory that the rich countries continued
economic dominance is necessary for developing countries to prosper,
which is fallacious.
Doha’s death thus presents two hits against developing countries.
It comes at a time of, as reported by the WTO last September, “slowing
global output growth [that] has led WTO economists to downgrade their
2012 forecast for world trade expansion to 2.5% from 3.7% and to scale
back their 2013 estimate to 4.5% from 5.6%.” Furthermore, it must be
remembered that the entire point of Doha was to ensure equality of
opportunity for them after the lopsided Uruguay Round of agreements.
Doha -- which is actually the Doha Development Round -- was launched
with hopes of putting more poor country friendly provisions,
particularly in relation to tariffs for industrial goods and the
lowering of subsidies for agricultural products.
Unfortunately, the richer, developed countries have proven
themselves to be not practicing as they preached. They repeatedly made
demands that would ensure the Doha Round is not concluded successfully,
which was in full display at the Cancun Ministerial when they attempted
to include the Singapore issues over the huge objections of the
developing countries.
Sadly, even WTO DG Pascal Lamy seems to have thrown in the towel
as well: although there remains the clear need to help developing
countries, “the nature of trade is changing. We are increasingly trading
in tasks and in value-added and through value chains which are
increasing in both breadth and in depth.”
No doubt the world’s events have overtaken Doha. But as things
change, some remained the same. For purposes of giving confidence to
developing countries and for developed countries to show their good
faith moving forward, a successful conclusion to Doha would have still
been a very good thing nevertheless.
