WTO’s Doha Round: Dead and Alive

my Trade Tripper column in the 8-9 January 2016 issue of BusinessWorld:

There’s this marvelous scene in the movie Top Secret where an East German General (played by Jeremy Kemp) waited for news about one of his soldiers shot by Val Kilmer’s Nick Rivers. Answering the phone, the General asks the doctor grimly: “What is the condition of Sergeant Kruger?” A pause, then: “Very well, let me know if there is any change in his condition.” Hanging up, he tells his aide “He’s dead.” Simply one of the funniest moments in cinema.

Which reminds me of the WTO’s Doha Round. People have used many words for it: “catatonic,” “comatose,” “moribund.” But now, is it just “dead?” And if so, will there be any change in its condition?

Hence, why I again completely rue the wasted opportunity of Manila’s recent APEC (Asia-Pacific Economic Cooperation) hosting. Attempting so many things but on that one thing most truly important, renewing commitment to multilateral trade and revive the World Trade Organization, it did not do.

Yeah, yeah, the APEC produced the expected Statement on Supporting the Multilateral Trading System and the 10th World Trade Organization (WTO) Ministerial Conference, whereby the members declared that they “are committed to working together for a successful Nairobi Ministerial Meeting that has a balanced set of outcomes, including on the Doha Development Agenda, and provides clear guidance to post-Nairobi work.”

The Statement would have had more punch (despite the bland generalities) had the host country, the Philippines, not spent most of its time pushing for regional trade deals. Particularly, its very public courtship of the Trans-Pacific Partnership.

What could have been done was to pronounce a very specific and categorical “live or die” deadline for the Doha Round (post-Bali) and -- should the deadline be unmet -- to commit to launching a whole new Round with an updated trade agenda.

What happened instead was an energetic rich countries’ call for the Trade Facilitation Agreement (TFA) to be signed and implemented. Utterly ironic considering that the TFA has always obviously been a developed country matter of interest incongruous to a Doha Round of “developmental” aims for developing countries.

And one such interest of developing countries that has been completely set aside due to the bait and switch played by the developed countries is that of agricultural subsidies.

While indeed agreement was reached on banning export subsidies, agricultural subsidies by developed countries in the meantime have increased exponentially and continue to block market access of developing country agricultural exports. And developed countries want to increase the obstacles by pushing for labor and environmental standards alongside the agricultural negotiations.

Ultimately, the acquiescence by developing countries to the TFA in Bali 2013, without demanding that it be locked up with agriculture issues, was a strategic mistake that still affects the WTO today. Interestingly, the Philippines chaired the WTO’s Preparatory Committee on Trade Facilitation.

This has led the developed countries to stick to its guns and deprive developing countries the benefits that a successfully concluded Doha Round could have brought.

And in the end, Doha was eagerly proclaimed dead by Western media, which -- if true -- was death by whimper: the WTO members simply not voting unanimously to “reaffirm” Doha.

It also signaled, at least to the Financial Times (“Trade talks lead to ‘death of Doha and birth of new WTO,’” December 2015), that Doha’s demise “marked a victory for the US and EU (European Union), who alongside other developed economies have argued that clinging to the long-stalled Doha negotiations was making the institution irrelevant in a changing global economy.”

Nevertheless, the continued existence of the multilateralism embodied by the WTO is essential.

As Harvard’s Asia Center’s William Overhold points out (“It’s time to update our thinking on trade,” August 2014), the “WTO remains crucial to a vibrant world economy. Without the WTO’s dispute settlement mechanism, trade wars will ignite everywhere. By allowing the WTO system to decay, and by blaming globalized trade for problems that are unique to the past generation, we risk going back to pre-World War II trade wars. We need a modern, multilateral structure that updates the WTO, not a degeneration of the global trade and investment system based on a failure to recognize the shape of the new world we are entering.”

For now, where to WTO?

German Development Institute’s Clara Brandi (“The Doha Round is dead -- long live the WTO?” December 2015), noting that “the WTO should also be used as a negotiating forum in the future, not least because it is more inclusive than the bilateral and regional forums,” helpfully (actually, hopefully) suggests: “The end of the Doha Round could also serve to inject fresh dynamism into the WTO as more states opt for plurilateral approaches. At the same time, the global trading system is becoming increasingly confusing as the number of bilateral, regional and plurilateral agreements grows. This makes it particularly difficult for smaller enterprises in developing countries to navigate the ever more complex regulatory frameworks. The WTO should use transparency initiatives to bring more light into this jungle.”