Friday, July 27, 2012

Doha negotiations - Need to change gears?

The Doha round of multilateral negotiations has been going on for a decade now. When will it come to an end? Will the impasses continue for a few more years? A study by Christoph Moser and Andrew Rose titled "Why do trade negotiations take so long?" have articulated the view that it takes longer to conclude multilateral talks when more countries are involved. This is not good news for the Doha round. Comparing the time taken for different GATT rounds, it is interesting to note that the first three GATT rounds which had 19, 20 and 33 members in total took only 8 months to complete. Contrast that with the Uruguay Round that took 91 months with 125 members involved in the negotiations. While one third of countries in the first three rounds were developing countries, now about two third of the countries belong to the developing world.

The above study provides a graphical depiction of the survival rate of Regional Trade Agreements compared to the days of negotiation indicating that it is also inversely proportional to the time taken for their completion as indicated in this figure below:

The reasons for the delay in conclusion of the Doha Round can be attributed to a number of factors:

1. With more than 150 countries participating in the negotiations, there are bound to be divergent interests and hard positions.
2. The developing world is far more active in these negotiations as compared to the earlier rounds leading to increased possibilities of an impasse.
3. The issues themselves are becoming more complex and contentious. While the earlier rounds were more about tariff liberalisation, the present rounds touch on more complex issues of trade, development and access. 

One would have to wait and see if the Doha round of negotiations can break the direct co relation between the length of a negotiation and its poor survival rate.

Pascal Lamy recently highlighted the need to move forward in this regard:
"Those of you who believe that, as time passes, inexorably, the Round might lose all its remaining steam may be right, whether we like it or not. What is clear, in my view, is that not engaging seriously in trying to find solutions to the present impasse will increase the probability of such a disappointing outcome. Credibility lies in the capacity to produce results, not statements. We should all face up to this reality and accept that there is no individual clever escape from this collective responsibility. As we break for the summer, I would urge each of you to reflect on your individual contribution towards collectively breaking the deadlock and allowing for forward movement in our work to fully operationalize the guidance we received at MC8 from our Ministers."
Only time will tell if the gears will be changed in this regard. 

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