Who Killed Doha?
IMD Professor Carlos A. Primo Braga on the WTO Ministerial Conference in Nairobi
21 December 2015
Every two years, the trade community attends its main “jamboree” at multilateral level in the context of a WTO Ministerial Conference (MC). This year, MC10 took place in Nairobi – a first for Africa in the WTO era. Expectations were not very high since, as I described earlier, patience with the long-running Doha Development Agenda (DDA) negotiations had reached its limits. The DDA was launched in 2001 and fourteen years later WTO members have not yet been able to deliver a significant outcome, except for the Trade Facilitation Agreement reached at MC9 in Bali in 2013.
As usual, the conference went beyond its official deadline of 18 December and it was only by mid-afternoon on Saturday 19 December that exhausted Ministers and their teams were able to produce a Ministerial Declaration. There are some key deliverables listed in the declaration. In particular, the agreement on agricultural export competition is a welcome result, even though it was something that should have been delivered years ago. By committing to eliminating export subsidies for farm exports (immediately in the case of developed countries and by the end of 2018 in the case of developing countries), members have reached an important agreement. Moreover, decisions in favor of least-developed countries (LDCs) with respect to preferential rules of origin and trade in services are noteworthy. One can also celebrate the completion of the procedures for the accessions of Liberia and Afghanistan and the expansion of the Information Technology Agreement (ITA), which has the potential to significantly liberalize trade flows that account for more than USD $1 trillion per year. Against the low expectations that dominated Geneva in the last few weeks, these results are a “plus,” although it requires some imagination to characterize them as “historic” as the WTO website does.
Fly in the ointment
The main fly in the ointment is that the Declaration is at best ambiguous about the fate of the DDA. On 13 December, a clear statement from the US – in the form of an article by Michael Froman, the US Trade Representative, published in the Financial Times – argued that it was time to abandon the DDA. By noting that the Doha negotiations remained deadlocked and contrasting their glacial pace with progress in the context of regional (e.g., TPP) and pluri-lateral agreements (e.g., ITA), Mr. Froman made it clear that it was time to abandon the DDA.
In Nairobi, the divide between the US (with the support of some other developed countries) and the majority of developing WTO members with respect to the fate of the DDA became evident. In the end, in the best tradition of constructive ambiguity, the Ministerial Declaration in its Article 30 states that “many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations.”
Did the butler do it?
The reality, however, is that “Doha” – as a multilateral trade round – is dead. Needless to say, there will be those that will dispute this interpretation since there are pieces of the declaration that can be read as support from all members to the multilateral negotiating agenda. Yet, unless one can foresee a radical u-turn by the US in terms of its negotiating priorities, the most likely outcome will be a pragmatic approach to deal with remaining issues in the Doha agenda outside the single-undertaking and the original architecture of the DDA.
Against this background, while in Nairobi, I decided to play the role of “Hercule Poirot.” I asked many “witnesses” (trade negotiators, academics, representatives of the private sector, international organizations and NGOs), the question posed in the title of this piece. There is no easy answer (it is clear, however, that the “butler” – the WTO Secretariat – did not do it). Some personalized their answers with Michael Froman and Kamal Nath (the former Indian Minister for Commerce and Industry) being often mentioned.
The definition of insanity
I believe, however, that this goes well beyond personalities. Key countries played a role in the “killing.” The US lost patience with the never ending negotiations and it was willing to pull the plug by pointing out that, as it is attributed to Einstein, insanity can be defined as “doing the same thing over and over again and expecting different results.” India consistently played to its domestic constituencies, while pretending to lead the developing world and infuriating trading partners by reneging on agreed commitments in the name of “food security.” Brazil by emphasizing agriculture first, constrained the space for bargains across different areas of the negotiations (NAMA, services…) and contributed to diminishing the interest of the private sector in the negotiations. China, by clinging to its recently acceded member status, was not willing to play a more proactive role compatible with its current mega-trader status. And I could go on, but the message is clear: as in the case of Agatha Christie’s “Murder on the Orient Express,” all suspects are guilty. Let’s hope that the death of “Doha” will not be in vain and that it can provoke a shock to the system towards a renewed commitment to trade multilateralism in the medium-term.
Carlos A. Primo Braga is Professor of International Political Economy at IMD, and Director of The Evian Group@IMD. He teaches in the Orchestrating Winning Performance program.