David Jessop

Statements made mid-May suggest that as far as the four main players are concerned - the United States, European Union, India and Brazil - progress is being made on efforts to restart the Doha negotiations at the World Trade Organisation (WTO).

Following the annual meeting of the Organisation for Economic Cooperation and Development (OECD) in Paris on May 16, WTO Director General Pascal Lamy noted to the media that the round was no longer deadlocked.

"It may not be moving at the speed we would all like to see, but it is moving," he told journalists.

His comments were echoed by the United States Trade Represent-ative, Susan Schwab, who warned, however, that progress was patchy.

This appears to be the first genuinely positive assessment since the Doha Round was formally suspended in July 2006. What it reflects is an effort by the four to try to make limited progress before the U.S. President's fast-track negotiating authority expires on June 30, so that a framework agreement might be in place by late 2007.

To this end, it was made clear at the OECD forum that the 'Big 4' - U.S., the EU, India and Brazil - intend to increase the frequency of their exchanges, with additional meetings planned for London on June 10 and a further session from June 14-19 at an as yet to be determined location.

On reason for this apparent progress is that the EU and the U.S. appear to have narrowed their differences on agricultural tariffs and subsidies what this means numerically has yet to be revealed.

Outside of these discussions, some progress also appears to have been made on negotiations on industrial goods.

According to Mr. Lamy, there has also been positive movement on services, rules and fisheries. These discussions, he has said, are now moving from the theory of what WTO members might do, to a "to-do list," suggesting that real progress is being made towards commitments on tariff reductions.

A continuing difficulty, however, remains the U.S. President's fast-track trade negotiating authority which expires in June.

Unless Congress were to agree to renew his mandate, the U.S. President will, after that date, lose his ability to seek a straight yes or no vote on trade agreements. Without this, any trade agreement with the U.S. could be picked apart.

Interestingly, however, Peter Allgeier, the U.S. ambassador to the WTO, recently noted that the U.S. Congress would be more likely to agree to a new fast-track mandate if talks in Geneva appeared likely to produce an agreement that substantially increases market access.

It is this that appears to be driving the U.S., the EU, Brazil and India to try to makereal progress in the remaining time left.

Of continuing concern is how nations other than the Big 4 will react, and the apparent absence of transparency in the negotiating process it is widely recognised that unless Brazil and India can reach agreement with the U.S. and Europe on agriculture, then nothing at all will happen, the present process beyond this in many negotiating areas does not lend itself well to the WTO's consensus-based decision-making mechanism.

Debate within WTO countries

Developing countries make up two thirds of the WTO's membership, and there remain many contentious issues they are far from happy with. For instance, a continuing debate within the WTO centres on how to resolve the issue of removing a proportion of some developing nation products and commodities from tariff liberalisation by declaring them 'special'.

This relates to products that developing countries alone will be allowed to shield from tariff reductions on the grounds of 'food security, livelihood security, and rural development needs'.

On this issue, it seems that WTO members are still a long way from agreeing to the 20 per cent of lines that many developing nations want designated as special. So much so that there remains a view that this issue may yet cause the Doha Round to fail.

There are also problems with the issue of sensitive products: those that developed and developing countries will be allowed to make gentler tariff cuts in exchange for creating new import quotas. Here, some progress is being made but there remains disagreement on what percentage of trade-sensitive products should be allowed to cover with views ranging from one to 15 per cent.

EXPANDING OECD MEMBERSHIP

Perhaps of much greater long-term significance was the announcement at the OECD's annual ministerial meeting, that the organisation was opening the way for China, India, Indonesia, Brazil and South Africa to join the 30-member group of wealthy developed nations.

Angel Gurria, a former finance and foreign minister of Mexico, who is the OECD Secretary-General, had been campaigning for the organisation to embrace all the key players in the world economy on the basis that the organisation could become irrelevant when nearly three quarters of global growth was coming from advanced developing nations.

As a first step, it was agreed that the OECD would invite Russia to join the 30-member group, along with Israel, Slovenia, Estonia and Chile. However, it was also agreed that Mr. Gurria should strengthen cooperation with Brazil, China, India, Indonesia and South Africa 'through enhanced engagement programmes with a view to possible membership'.

What all this suggests is that deals are being struck to enhance the possibility of a WTO round of limited ambition.

But what has so far not been said is how countries in the Caribbean and the rest of the ACP are to be convinced.

The WTO director general has made clear that he believes that if the Doha Round were to fail, this would "break the commitment for a more developing-friendly world trading system" when the round was launched in 2001.

The emphasis is now on trying to conclude the talks by the end of the year.

If this is the case, we shall know before August whether a framework agreement containing the formulae and numbers for tariff reduction and cuts in subsidies is possible.

David Jessop is director of the Caribbean Council. Email: david.jessop@caribbean-council.org