September 02, 2009: LIFE WITHOUT DOHA: time for better ideas?

Geneva Update September 2, 2009

LIFE WITHOUT DOHA: time for better ideas? By Anne Laure Constantin, IATP

CONTENTS

I. AIMING FOR THE MOON: trying to make Doha relevant in 2009 II. DRAGGING FEET: unusual U.S. stance on trade III. GROUNDED IN REALITY: reassessing the agenda for trade and agriculture IV. IMPORTANT DATES TO REMEMBER V. DOCUMENTS

I. AIMING FOR THE MOON: trying to make Doha relevant in 2009

It's been a quiet summer in Geneva. July ended in an unusually relaxed way at the WTO. Not that the disagreements around Doha have disappeared, but the emotion and fighting spirit that mark a normal July for trade negotiators was absent. No one made the suggestion that trade ministers should get together before the summer recess, a break with the routine of the past few years.

The global economic crisis has diverted governments' attention from Doha and led to a more widespread questioning of the benefits of free trade. International merchandise trade is forecast to decline by 10 percent in volume in 2009 even though - according to the findings of the WTO's World Development Report - the implementation of protectionist trade measures in response to the crisis is not widespread.

Officials continue to pay lip service to the importance of concluding the Doha Round. High-level political gatherings of the G8, APEC, ASEAN, and others, recently issued statements calling for a conclusion of the round by the end of 2010.

But Geneva's trade negotiators remain unimpressed. When Pascal Lamy offered to translate those political statements into an ambitious road map for negotiations - he wanted to see revised negotiations texts by October - he failed to get members' agreement. At the July Trade Negotiations Committee (TNC) meeting, Costa Rica intervened to question the proposed new 2010 "deadline". Former agriculture chair Crawford Falconer, now senior trade official for New Zealand, spoke strongly against attempts to deviate from a transparent and inclusive multilateral process, implicitly saying that Lamy's proposals would move in such a direction. Both interventions were broadly supported by the membership.

To help resume work in September, India is convening a Doha-focused mini-ministerial meeting in New Delhi (September 3 - 4, 2009). The Indian government's initiative was met with notable resistance on the part of local social movements - particularly farmers groups - and protests in Delhi during the ministerial are expected to gather tens of thousands. However, the meeting is not intended to deliver concrete progress in the negotiations. Instead, the Pittsburgh G20 Summit scheduled for end of September is considered the closest thing to a possible new "crunch time" for achieving progress at the WTO in the near term. Some hope that it can be a moment for governments to re-ignite momentum in the negotiations by indicating clear new directions for compromise. If it is just another statement of vague support for Doha, which is the most likely outcome, the Pittsburgh meeting will make no difference in Geneva.

In the absence of negotiations, WTO members are focusing on the preparations for the procedural WTO Ministerial Conference, scheduled for November 30 - December 2, 2009 in Geneva. The conference is being planned to satisfy the WTO's statutory requirement that its members meet at ministerial level regularly - theoretically every two years but the last full ministerial conference took place in Hong Kong in 2005. The preparatory process is led by the Chair of the General Council, Ambassador Matus of Chile. The ministerial will be focused on one main theme: "The WTO, the multilateral trading system and the current environment". A couple of countries have made proposals for concrete discussions about the improvement of some of the organization's procedures. At this stage though, the conference is bound to be more of a talk shop than a landmark for the WTO. Members insist that this ministerial is not about advancing the Doha agenda.

All of which raises the question: Is the WTO drifting into bureaucratic irrelevance?

II. DRAGGING FEET: unusual U.S. stance on trade

To the outside world, the U.S. mostly appears as a champion of global trade expansion. Domestically though, trade policy has become a contentious issue over the past few decades. In the 1990s, under President Clinton, the administration was clearly committed to increasing global trade, though there were regular struggles with Congress to get trade measures and agreements passed. President Bush's two successive administrations marked the end of this more liberal attitude to trade in U.S. politics. With the election of Barack Obama, the drift is complete: trade liberalization has moved from having broad bipartisan support with dissent on the margins of both political parties, to having clear support from only a small number of Congressmen and women, and a great deal of opposition from many different corners of U.S. political life.

The Obama administration has not yet figured out its trade agenda. This is clear from its lack of movement on pending bilateral trade agreements. It is even clearer from the number of posts in the Commerce Department and at the office of the US Trade Representative (USTR) that have not been filled yet, almost one year after President Obama's election. The U.S. administration is weighted with other issues, from the still-fragile financial system, to relatively high levels of unemployment, to the effort to provide affordable healthcare to all U.S. citizens. Trade officials hoping for leadership from Washington would appear to be hoping in vain.

The country that once was the most ardent advocate of free trade now looks lost in Geneva. It does not even have an Ambassador to the WTO at this time. Peter Allgeier, U.S. Ambassador to the WTO since 2005, held his farewell party in July without any announced plan for his replacement. USTR Ron Kirk's visit to Geneva in May was well received but failed to highlight a clear vision for how to proceed on Doha. Names for possible ambassadors are floating around, most recently and persistently, the name of Michael Punke, a former Clinton administration official and Senate trade staffer, as well as a published fiction writer. But there is no confirmation yet from the White House, and with other pressing issues on the Senate's agenda (not least health care reform and climate change legislation), the confirmation of this trade position is not a priority.

Meanwhile, in the House of Representatives, 116 Members are currently listed as co-sponsors of a bill that would overhaul the way trade policy works in the U.S.: the TRADE Act (Trade reform, accountability, development and employment Act). The proposed bill establishes a congressional space to review existing trade deals, requires that priority be given to the implementation of human rights and environmental agreements, and strengthens Congress' ability to shape a fair trade policy agenda. The sheer number of co-sponsors confirms the growth in skepticism on free trade throughout the United States.

President Obama is scheduled to make a landmark speech on trade - but no one knows when. Initially, the plan was early fall, before the G20 summit in Pittsburgh (24 - 25 September).

III. GROUNDED IN REALITY: reassessing the agenda for trade and agriculture

The ostensible purpose of the Doha Agenda was to address existing imbalances in WTO Agreements as well as to finish the incomplete implementation of Uruguay Round commitments (in particular by developed countries). It was also to address the failure of the Uruguay Round to deliver promised benefits to many developing countries. This is how the Agenda was sold as a framework for a Development Round. What's currently on the table for agriculture (as laid out in the December 2008 draft modalities text, widely accepted by WTO members as the basis for further negotiations) are subsidy and tariff cuts, complicated by exceptions and loopholes, exemptions and variable implementation periods. At the end of the day, the proposals leave underlying structural weaknesses unaddressed and, instead of creating new rules, would result in an even more complicated landscape for international trade.

Confronted with the converging economic, food and climate crises, governments need to take a fresh look at what they're doing. The current and projected impacts of these crises clearly require that the international community act in a coordinated manner to move away from business as usual.

Governments and experts now converge around the fact that agriculture deserves more policy attention than it received over recent decades. A series of recent reports stress the need to re-think how business is done in agriculture. For instance, the global assessment published in 2008 under the tongue-twisting acronym IAASTD (International Assessment of Agricultural Science, Knowledge and Technology for Development), and endorsed by 58 governments, states, "the way the world grows its food will have to change radically to better serve the poor and hungry if the world is to cope with growing population and climate change while avoiding social breakdown and environmental collapse."

When it comes to trade, progress toward shifting to a different model is slow. Governments' language on trade in food crisis-related declarations remains vaguely supportive of the conclusion of the Doha Round - even though signatory governments do not share a common understanding of what a Doha agreement should resemble.

For some time, IATP has been arguing in favor of more regulation of agricultural trade. Although governments remain reluctant to change, the crises are giving rise to innovative ideas. The UN Environment Program (UNEP), in its recent Environmental food crisis report, emphasizes the need to focus on reorganizing food chains, notably to get rid of pervasive food waste and to curb price volatility. The report also notes, "Increased trade and improved market access can be achieved by improving infrastructure and reducing trade barriers. However, this does not imply a completely free market approach, as price regulation and government subsidies are crucial safety nets and investments in production." Many governments reached similar conclusions when faced with the emergency of the food crisis. For instance, a number of governments have re-introduced subsidies (to a large extent still allowed under existing WTO rules), established safety-nets for particularly vulnerable groups (again, legal, but often too expensive to be maintained in the longer run) and/or started reflecting on the potential of regional and even global grain reserves. Discussions about Doha appear surprisingly disconnected from these developments.

It is time to revamp the global governance of trade and agriculture. Discussions at the upcoming WTO Ministerial on "the WTO's contribution to recovery, growth and development", outside of the pressed context of negotiations, could be used to think through what new tools and approaches might be needed to confront the 21st century's food challenge. A realistic assessment of the specific role of the WTO, and a better definition of how it fits within the broader multilateral system when it comes to food, is certainly needed. The work carried out by UN Special Rapporteur on the Right to Food Olivier de Schutter has contributed to initiating this discussion. It can be taken a step further by the various food-related meetings of this fall. And before they come to Geneva, trade ministers will need to consult their counterparts in charge of agriculture, environment, and international development, as well as with representatives from civil society, to figure that out in an inclusive way.

IV. IMPORTANT DATES TO REMEMBER

September 3 - 4: Mini-ministerial meeting in New Delhi, India

September 23 - 30: UN General Assembly, New York, U.S.A.

September 24 - 25: G20 summit in Pittsburgh, U.S.A.

September 28 - 20: WTO Public Forum, Geneva, Switzerland

November 16 - 18: World Summit on food security, Rome, Italy

November 30 - December 2: WTO Ministerial Conference, Geneva, Switzerland

December 7 - 18: UN Climate Change Conference, Copenhagen, Denmark

V. DOCUMENTS

IAASTD, Executive summary of the synthesis report, 2008: http://agassessment.org/reports/IAASTD/EN/Agriculture%20at%20a%20Crossroads_Executive%20Summary%20of%20the%20Synthesis%20Report%20(English).pdf

IATP, Integrated solutions to the water, agriculture and climate crises, March 2009: http://www.tradeobservatory.org/library.cfm?refid=105477

IFPRI, Navigating the perfect storm, August 2009: http://www.ifpri.org/sites/default/files/publications/IFPRIDP00889.pdf

India's proposals for discussion at the WTO Ministerial Conference, July 3, 2009: http://www.tradeobservatory.org/library.cfm?refID=106352

TRADE Act, 2009: http://www.michaud.house.gov/images//tradeactfinal.pdf

UNCTAD, The least developed countries report 2009, http://www.unctad.org/Templates/webflyer.asp?docid=11721&intItemID=2068&lang=1 UNEP, The environmental food crisis, February 2009: http://www.unep.org/pdf/FoodCrisis_lores.pdf WTO, World Trade Report 2009, http://www.wto.org/english/res_e/publications_e/wtr09_e.htm

WTO, December 2008 revised draft agriculture modalities: http://www.tradeobservatory.org/library.cfm?refID=104734

Anne Laure Constantin Institute for Agriculture and Trade Policy (IATP) Geneva Office 15, rue des Savoises 1205 Geneva Switzerland Tel: +41 22 789 0724 Fax: + 41 22 789 0733