Will Doha, like Dracula, Come Back from the Dead?

By Walden Bello and Mary Lou Malig*

Like the good Count of Transylvania, the so-called Doha Round of trade
negotiations of the World Trade Organization collapsed twice--the first time
during the Cancun Ministerial Meeting in September 2003, the second during
the so-called Group of Four meeting in Potsdam in June 2007--only to come
back from the dead. But has the silver stake that will render Doha truly and
really dead finally been driven through its heart by the unraveling of the
most recent ³mini-ministerial² gathering in Geneva?

Stampeded into the WTO

When the Uruguay Round that established the World Trade Organization (WTO)
was negotiated from 1986 to 1994, the developing countries were largely
bystanders. Governments that had been members of the General Agreement on
Tariffs and Trade (GATT) were dragooned into its successor organization by
the threat that if they did not come in on the ground floor, they would be
subjected to a painful accession process should they decide to join it
later. In the meantime, they were told, they would, like North Korea,
become isolated from global trade. Preferring the devil they knew to the
devil they didn¹t, most members of the GATT signed on a document that
subordinated all dimensions of a nation¹s economic life to the goal of
expanding international trade.

Most had not had the time to really absorb the fine print of the 500 plus
pages, something that was evident in the case of Indonesia. When the
Indonesian government declared in 1997 that it would build up its car
industry by applying the so-called ³local content² policy, or mandating the
sourcing of a growing portion of a car¹s parts to local industries, the US,
EU, and Japan‹the home countries of the big car corporations‹informed it
that this would be a violation of the Trade-Related Investment Measures
Agreement (TRIMs) of the Uruguay Round and that they would haul Indonesia to
a WTO dispute-settlement court. Smaller countries than Indonesia, with
minuscule trade bureaucracies, were even more disadvantaged.

From Seattle to Doha

In any event, by the time the Third Ministerial of the WTO rolled around in
late November 1999, developing countries had come to a collective
realization that they had bargained away significant space for development
in signing on to the Uruguay Round and thus were in no mood to agree to
launching another round to liberalize global trade, as the big trading
powers demanded. At the same time, farmers, environmentalists, workers,
anti-HIV-AIDS activists, and other sectors of civil society globally were up
in arms against the doctrine of ³trade uber alles²--as Ralph Nader described
it--that was enshrined in the WTO. It was this synergy between the massive
protests in the streets and the rebellion of developing countries at the
Sheraton Convention Center that resulted in the spectacular collapse of the
Third Ministerial Meeting in Seattle.

But the EU and US were undeterred. The Fourth Ministerial Meeting in Doha,
Qatar, in November 2001 saw developing countries subjected to tremendous
pressure to agree to the launching of a new round in order to ³save² the
global economy following the September 11 events. But there was more than
moral pressure in the name of the anti-terrorist struggle that was involved.
As Aileen Kwa and Fatoumata Jawara documented in their now classic Behind
the Scenes at the WTO, not too subtle threats of retaliation for
recalcitrance were combined with offers of massive aid packages. Most
countries were excluded from decision-making, which was effectively confined
to a select group of about 30-35 governments handpicked by the EU and US.
The result was the ³Doha Development Round,² which had little to do with
development and everything to do with expanding developed country access to
developing country markets.

The bitter experience of being subjected to divide and conquer tactics in
Doha proved to be a turning point for the developing country politics in the
WTO. Alliances were formed‹among them, the Group of 20 led by Brazil,
India, South Africa and China, to demand cuts in developed country
agricultural subsidies and greater access to developed country markets, and
the Group of 33 led by Indonesia and the Philippines to push for the
creation of ³special products² that would be exempted from tariff reductions
and for ³special safeguard mechanisms² like protective tariffs against
surges of highly subsidized agricultural imports from the developed
countries.

Collapse in Cancun

The lead-up to the 2003 Cancun Ministerial also featured debates among
social movements engaged in the WTO process. Even after Seattle, there were
still some NGO¹s that entertained the idea that the WTO could serve as a
mechanism to bring about development and that the designation ³Doha
Development Round² provided an opening. Greater market access to developed
country markets for developing country products could be achieved if the WTO
free trade agenda in agriculture were supported , some development NGO¹s
contended. Others argued that, on the contrary, Doha had shown that
development was far down the list of concerns of the big trading powers and
that the central task was to derail the WTO negotiations or to ³get the WTO
out of agriculture,² as the international peasant organization Via Campesina
put it.

The NGO reformers¹ case was not helped by the US and EU, which became even
more inflexible when it came to cutting their massive agricultural
subsidies. The EU was also impatient to begin substantive WTO discussions
on the creation of disciplines on the so-called ³New Issues² of investment,
government procurement, competition policy, and trade facilitation. This
effort to bring into the WTO ambit what many regarded as non-trade-related
issues sparked the creation of the Group of 90 that opposed inclusion of
these items in the WTO agenda. It was the walkout by some members of this
grouping when some developed countries insisted on discussing the ³New
Issues² that led to the collapse of the Cancun Ministerial in Sept 23, 2003,
though the ground had been prepared by the stalemate in agriculture.

If lack of organization led to their being outmaneuvered in Doha, effective
coalition building enabled the developing countries to outmaneuver the
developed countries in Cancun, with technical support from NGO¹s and moral
support from social movements seeking to shut down the meeting in a protest
atmosphere much like Seattle¹s.

Realizing that the WTO was no longer a playground the US could control along
with the EU, US Trade Representative Robert Zoellick described the debacle
in Cancun as one where ³the rhetoric of the Œwon¹t do¹ overwhelmed the
concerted efforts of the Œcan do.¹ ŒWon¹t do¹ led to impasse.² A few days
later, he warned, ³As the WTO members ponder the future, the US will not
wait: we will move towards free trade with can-do countries.² That was
taken to mean that the US would now concentrate its efforts in obtaining
bilateral free trade agreements. These words also marked the beginning of a
US assault on the G 20 which succeeded in driving Colombia, Peru, El
Salvador, Guatemala, and Costa Rica out of the formation a month after the
Cancun collapse. The G 20, however, did not go under.

From Cancun to Potsdam

Cancun may have taken the wind out of Doha¹s sails, but over 2004 and 2005,
negotiations revived, with both the US and EU trying a new tack. The two had
brought in Brazil and India, the leaders of the G20 into a formation called
FIPS or Five Interested Parties (the US, the EU, Australia, along with
Brazil and India) which for a time managed to contain the opposition. Though
the EU and the US had their differences, especially on the question of
agricultural subsidies, they nevertheless agreed on an approach whose
contours were etched out in the so-called July 2004 Framework that the EU
and the US forced through, with the acquiescence of G-20 leaders Brazil and
India, at a surprise General Council meeting in the dead of summer in
Geneva: minor concessions on agricultural subsidies in return for big
concessions from the developing countries in opening up their industrial
sectors (or ³non-agricultural market access²) and services.

The Declaration of the Hong Kong Ministerial in December 2005 was based on
this inequitable approach but developed countries played the old divide and
rule game by giving different sweeteners to different parties. They
promised the G90 that it would get ³The Round for Free² and ³Aid for Trade.²
The Round for Free referred to the promise that the G90 countries would have
duty free, quota free market access to developed countries Upon closer
inspection of the agreement, it was revealed that the US in fact maintained
tariffs on those products that were of greatest interest to the G90
countries. The G20 on the other hand, received a ³pledge² from the EU that
it would end agricultural subsidies by 2013. But in the area of
non-agricultural market access or NAMA, the harsh ³Swiss formula² was in
place, which was a tariff reduction formula that would drastically bring
down developing countries¹ tariffs.

The Hong Kong Ministerial ended with a deal in place but with massive
dissastisfaction among developing country delegates, with some raising
objections that the format of the final plenary made it difficult for
opposition to be heard. There were also massive protests in the streets that
were only broken up by the police making more than 900 arrests. Still, the
Hong Kong Ministerial could have ended up like Cancun had the Venezuelan
government not gone back on its promise to NGO¹s that it would vote
declaration, which would have rendered the it null and void owing to the
WTO¹s consensus rule.

The Hong Kong Declaration, however, masked continuing, indeed widening,
divisions that were very difficult to bridge. In fact, in July 2006 in fact,
a few months after the deal in Hong Kong, talks broke off in Geneva and were
suspended for the rest of the year. In an effort to break the deadlock, the
US and EU tried to work out a deal with Brazil and India, the acknowledged
leaders of the Group of 20, in talks at Potsdam in June 2007. The US
position was, however, a non-starter: not only did it not want to make
substantive cuts in its domestic subsidies but it sought to discredit the
agreement on the designation of Special Products and the implementation of a
Special Safeguard Mechanism agreed in Hong Kong. Both the US and EU were
also not willing to depart from their position that the industrializing
countries of the South had to make proportionally greater cuts in their
industrial tariffs than the industrialized countries in return for US and EU
³concessions² in agricultural subsidies.

Geneva: the Final, Final Collapse?

The collapse of the so-called ³G 4² talks in Potsdam placed the Doha Round
on life support. Faced with the prospect that any further postponement of a
conclusion to the Round would make the organization he headed irrelevant,
Director General Pascal Lamy took a gamble and roused the fatally weakened
organization to another late summer tryst in Geneva, this time to a
³mini-ministerial,² despite the fact that nothing had happened in the
interim to bring the positions of the developed and developing countries any
closer.

Indeed, President Nicolas Sarkozy of France and other EU leaders told EU
Trade Commissioner Peter Mandelson to stop talking about further bringing
down the EU¹s substantial subsidies. As the talks got underway, US Trade
Representative Susan Schwab also made it clear that the US would not agree
to reduce subsidies below $15 billion. More decisive in determining the
outcome was Washington¹s opposition to a very reasonable G 33 formula tabled
by India for imposing protective tariffs against agricultural import surges
under the Special Safeguard Mechanism agreed to at the 2005 Hong Kong
Ministerial. Completely underestimating developing country concerns that
food imports had undermined food self sufficiency at a time of rising food
prices owing to global food shortages, the US brought on another WTO
disaster with its single-minded focus on dumping its subsidized surpluses on
foreign agricultural markets.

Not helpful in bringing about a deal was Lamy¹s maneuver of limiting the
decisionmaking to seven countries, which drew sharp criticism from many
among the already circumscribed number of 35 countries that had been
invited to the mini-ministerial, including from host country Switzerland. If
ever there was a global meeting that was dead on arrival, this was it.

Lamy gambled and lost, and the WTO is now in a worse position than before,
with the prospect that it will evolve like the old League of Nations in the
1930¹s: present but powerless‹that is, dead for all intents and purposes.

In retrospect, the US and EU, used to getting their own way in global trade
negotiations, went a bridge too far in the Doha talks. Instead of being
open to real compromise, their intransigence and drive to expand their
control of global markets brought about the organizing for self defense of
the developing countries at the WTO. Greed backfired, instigating instead a
change in the equation of global economic power.

Nevertheless, just as Dracula could get resurrected in a B-movie sequel,
there is no 100 per cent guarantee that the Doha Round and the WTO will not
rise again.

*Walden Bello is senior analyst at Focus on the Global South and head of the
Freedom from Debt Coalition. He is also a professor of sociology at the
University of the Philippines. Mary Lou Malig is coordinator of Focus¹
Trade Program.