The Doha Round only reached a minor agreement last December in Bali
Pascal Lorot, founding President of the Choiseul Institute1
Article published in le Nouvel Economiste
The WTO came to an “historical” agreement in Bali on 7th December during its 9th Ministerial Conference, the first since its creation in 1995. However, despite the undisguised enthusiasm of the 159 Member States and the media frenzy, the agreement falls far short from providing the benefits it is accredited with.
We recommend reading this editorial by Pascal Lorot, the Founding President of the Institut Choiseul, published in the Nouvel Economiste2. By drawing up a brief history of trade liberalization since the Second World War, he covers the formation of the GATT and the various WTO rounds that led to the Doha Rounds in 2001. The Bali conference last December, which is far from getting the WTO out of the Doha deadlock, is proving to be more an admission of failure as it becomes increasingly more complex “to reconcile economic and commercial interests that have become increasingly less reconcilable”.
Pascal Lorot points out that the advantages of globalization are currently undermined because of the “balkanization” of trade due to the proliferation of bilateral agreements.
The same applies to food security and agriculture; this was demonstrated by the WTO yet again in Bali as it lacks the legitimacy to pursue these issues.
Today it is imperative to go beyond a totally obsolete viewpoint, because it is no longer a question of a North/South confrontation, but more generally the viability of the system itself that is at issue and the rules that govern it.
momagri Editorial Board
Led by the United States, China and Brazil, there are now many countries refusing to sacrifice their commercial interests and those of their businesses.
In the aftermath of the Second World War, western powers, led by the United States began opening borders. Torn countries needed to be rebuilt and weakened national economies had to be revived after this global conflict. Drawing lessons from the failure of States to resolve the economic turmoil of the inter-war period, the victors decided to liberalize global trade by ensuring, at the same time, that the different nations respected a minimum of common rules of conduct in international trade. The General Agreement on Tariffs and Trade (GATT) was born.
With varying success, the GATT negotiation rounds led to a significant decrease in global customs duties but also and primarily many non-tariff barriers to trade. In recent decades, however, the world has become more complex. The era of tête-à-têtes between the twenty-three signatories of 1948 was over. The emergence of new states born from the demise of the colonial empires, the end of the Soviet Union or the gradual conversion of China to the advantages of the market have made their mark. So much so that at the end of the Uruguay Round (1986-1994), there was a need for a newer, more modern structure that assembled most states of the world. This was the World Trade Organization (WTO), born from the Marrakech Agreements in spring 1994.
In 2001, the WTO, continuing with its aim of reducing barriers to free trade, initiated an extensive round of negotiations - the Doha Round; we could even say bargaining rounds, aimed at reconciling economic and commercial interests that have become increasingly less reconcilable.
Projected to conclude after four years, the Doha Round only came to an agreement last December in Bali. And even here, there was only a minimum of convergence on a very limited number of subjects. Of the twenty subjects put on the table 12 years ago, only three in fact survived: facilitating free-trade, developing the least developed countries and finally, agriculture – under the perspective food security. For other agricultural issues (export subsidies, domestic aid...), there are no agreements. And the other critical issues, such as industry, services, access to state markets, electronic commerce and intellectual property rights... Well, they have simply been postponed until better days. A deal had to be reached at all costs, which is ultimately an admission of failure. Why?
Twenty years after Marrakech, the world has changed. The WTO now comprises some 160 nations, all on equal footing but with increasingly divergent interests. Globalization, proclaimed to be advantageous, has not been for everyone, far from it. With the United States, China and Brazil in the lead, there are now many countries refusing to sacrifice their commercial interests and those of their businesses. Increasingly, it is at a regional level that trade rules tend to emerge. Trade is in the process of balkanization. The projects for big transatlantic or transpacific markets, that in fact, infringe the WTO’s objectives of multilateralism, are a glaring illustration.
Without a rapid and consensual redefinition of its objectives as well as its internal modes of functioning, the agreements delivered at the Bali conference in December 2013 could well be the last gasp of an organization that is exhausted and disorientated.
2 To read the full version of the article follow this link http://www.lenouveleconomiste.fr/le-cycle-de-doha-na-accouche-finalement-que-dun-accord-a-minima-en-decembre-dernier-a-bali-21116/