IMD International

Hoping for a miracle in Nairobi: the fate of the Doha round trade negotiations

IMD Professor Carlos A. Primo Braga on the upcoming WTO Ministerial Conference

The Doha Development Agenda (DDA) negotiations are about to commemorate their 14th “birthday” without an end in sight. Another critical moment for the WTO is fast approaching, as the next Ministerial Conference (MC10) is about to take place in Nairobi on December 15-18, 2015.

Trade meetings are always complex events. The “battle in Seattle” in 1999 is well remembered as a WTO Ministerial that did not end well. Clashes with civil society organizations amid clouds of teargas were its trademark, rather than progress in trade governance. Nothing as dramatic is expected to happen in the case of MC10. But, as the first WTO Ministerial to take place in a Sub-Saharan African country, expectations about its results for the trade-related development agenda are high. The reality of the ongoing negotiations, however, recommends caution and the danger is that MC10 will disappoint for lack of deliverables.

Policy-makers in industrialized nations have been both distracted (by macroeconomic crises) and more intrigued by preferential trade agreements (e.g., the Trans-Pacific Partnership agreement) and plurilaterals (e.g., the Trade in Services Agreement, TISA) than by the multilateral approach. The large emerging economies continue to play a wait and see attitude, ready to fight for their agenda, but unwilling (or unable) to exert positive leadership in advancing the DDA. The private sector, in turn, observes the WTO system with an increasing sense of frustration. This is due not only to the poor performance of the system in delivering results in a timely fashion, but also to the perception that the WTO “business model” is outdated.

The limited deals reached in the context of the Bali Ministerial – in particular, the agreement on Trade Facilitation, TFA – gave new hope to those that still believe in multilateral solutions. The protracted debates in Geneva over the last two years and the disrupting negotiating tactics of some WTO Members, however, underscored that getting the consensus necessary to move the agenda forward is arguably more than “just” a Sisyphean task. For example, at the time of writing, only 51 out of the 161 WTO members had ratified the TFA. In other words, we are still a long way to get to the 2/3 of the membership required for the TFA to come into force.

The best hope for Nairobi is for the WTO members to agree on a mini-package of deliverables on issues such as export competition in agriculture, development issues (e.g., DFQF market access and preferential rules of origin), and transparency with respect to domestic regulation in services and rules. This mini-package, however, would not answer one critical question: what should be the fate of the DDA? The gulf between those that would rather give up on the DDA and move on with a new negotiating agenda and those that believe that focus on finishing the DDA is the right priority seems to be widening as time goes by. At the core of this debate is also the question of how to treat new trade powers - e.g., China - that still want to cling to the developing country status and more flexible trade disciplines. One can only hope that the African private sector voice will be heard loud and clear in favour of progress in December. After all, these are the actors that will be most affected if the multilateral trade system becomes increasingly dysfunctional. In short, what we need is a “miracle” in Nairobi – a gift for the WTO as it reaches its 20th year of existence.

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.



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