When it all started, just after the September 11, 2001, terrorist attacks in the United States, the Doha round of trade talks was dubbed a development round. It was meant to promote global development and correct historic distortions which favoured the wealthy, thereby lifting millions out of poverty around the world by allowing them to trade their way to prosperity.
That was 2001. In 2009, the same round is still ongoing, albeit with less steam. The chances of completing a deal this year are slim, experts say, precisely at a time when global trade is falling - a recent report by the World Trade Organisation said trade would contract by 9 per cent this year, the most since World War II.
Additionally, many governments, facing tough economic times, are starting to bow to protectionist voices to sustain local businesses and industries. The two main pillars of the Doha Round, trade in agriculture and industry, are also among the most controversial. Those issues contributed time and again to the failures in reaching a deal, under which countries would have to lower subsidies for export goods and reduce tariffs and other restrictions on imports.
The outright economic advantages of concluding the round would be limited, most economists predict, since many countries already keep the majority of their export tariffs and subsidies below rates set by the World Trade Organisation (WTO).
However, the symbolism of a deal would be more significant, especially given the state of the global economy. "Closing the Doha round would be one of the best messages we can send towards the economic and trade agents - that we are on the path to recovery," Roberto Azevedo, Brazils ambassador to the WTO, told dpa. "That we are not indulging in the temptation of protectionism."
It would also lower the uppermost levels of subsidies and tariff rates countries could set, effectively setting a limit on how protectionist they could become within WTO regulations. The WTO is seen as a safety against the protectionist tit-for-tat wars that coloured the Great Depression. Things havent gotten that bad this time. So far, countries have limited themselves to bail-outs to banks and, more importantly, automobile manufacturers.
"The true value of Doha is making sure 20 years of trade reform is not reversed," said Simon Evenett, an expert on trade at St Gallen University in Switzerland. At this juncture at least, it is not necessarily about opening up new markets.
The concern for developing countries, says Ujal Singh Bhatia, the Indian Ambassador to the WTO, is that farmers, who have not modernised, might be hit hard by trade liberalisation if there are no safeguarding mechanisms.
"The Doha Round is billed as a development round and a final outcome will have to include a satisfactory conclusion on such issues which affect hundreds of millions of poor farmers around the world," he said. At the same time, the United States has said it wants to reopen talks due to "imbalances" in the current proposals.
"The value of what the United States would be expected to give is well known and easily calculable, whereas the broad flexibilities available to others leaves unclear the value of new opportunities for our workers, farmers, ranchers and businesses," read the first annual trade agenda of the Obama administration.
Obamas administration has also implied other issues, such as the environment and labour policy, could be tied to trade. But restarting the negotiations on Doha over such changes could be like pulling a cornerstone out of a building. "We certainly cannot agree with changes to the package in order to only accommodate one member," Azevedo said.
In addition, it is unclear what the Doha Round could mean for financial services. Given the economic meltdown, which is blamed in part on faulty regulatory statutes, the current status of the agreement as it pertains to the financial industry might now be seen as too liberal. The plan at the last ministerial meeting, in July 2008 in Geneva, was to push a complex package that would make countries sacrifice in some areas in return for gains in others.
But that meeting failed, largely since countries could not agree on the sacrifices they would have to make in terms of market access. Options included giving up some subsidies or access or agreeing to liberalise to accommodate others.
When the Group of 20 (G20) meet in London in early April they will likely issue calls against protectionism and state their interest in completing Doha. Whether or not there will be the global political will to pull this off remains the question. Barring surprises, most experts and trade officials say they wouldnt bet on it.
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