The world trade organization (WTO) carries out negotiations through what is commonly known as rounds. The Doha Development round was started at Doha, Qatar in 2001. The main objective and purpose of Doha Development round was to lower barriers of trade all over the world. This would hence facilitate free trade in between nations which of course have different levels of prosperity. Doha Development round was also given the name of Doha development agenda (DDA). The WTO ministerial conference which was held in Doha unanimously adopted this agenda. The agenda mainly was to put the interests and the needs of the developing countries at the center of the work program of the WTO. Thus, this essay focuses on the background of Doha development round citing the evolution process as well as giving out an analysis of the efficacy and progress realized in it.
The WTO is the international body concerned with the promotion of free trade internationally. It persuades countries to remove import tariffs and other trade barriers which impede trade across borders. Due to this WTO mandate, WTO has been linked with globalization. WTO oversees the directives and laws of international trade. It oversees the agreements on free trade and settles any kind of disputes that emerge from governments in international trade. Moreover, WTO organizes and plans for trade negotiations. The Ministerial Conference acts as the highest body of the WTO. The Ministerial Conference meets after a period of every two years. During the meeting, the conference elects the chief executive of the organization among other things. The Ministerial conference also sets negotiations for deals in global trade. These are aimed at reducing all sorts of trade barriers that could exist in between governments in the international arena.
The fourth Ministerial Conference of WTO was a 5 day meeting held in Doha, Qatar from the 9th of November, 2001. As it was the norm, the agenda was to make negotiations for a new round of agreements in trade. In this meeting, the Doha development round emerged and was later adopted. All the same, there was a lot of criticism that emerged from environmentalists, labor, developing nations and non-governmental organizations among others. The main controversy was that the declaration gave the northern, well industrialized countries a lot of control over the policy of world trade. They further asserted that the Doha Development round sustains and increases the unequal trade rules. Qatar was opted as the venue owing to its repressive laws concerning the rights to make protests.
Rationale and major features
Generally, the Doha development round agenda sought to move the World trade organization into a new dispensation. The World Trade Organization was thus expected to improve the conditions for international trade. It would also facilitate the pursuit of economic development through better and enhanced rules. Moreover, poverty eradication and employment matters were expected to have a major boost. Other benefits included promoting sustainable development and improving international governance. These were the ambitious backdrop of the whole idea in the agenda. The EU unanimously came together to make sure that the agenda succeeded. The Ministerial Declaration during the launch of DDA looked at the long term agenda and emphasized on the development that had been pushed by the EU. It mandated negotiations on services, intellectual property, agriculture, investment, industrial products, competition, and accountability in procurements by government as well as facilitating trade. Other issues included the rules of WTO like subsidies, anti-dumping and the regional agreements on trade. Environment and trade also formed an important feature in the DDA.
The dimensions of development runs all through the mandate like differential and special treatment. This kind of treatment resembles special provisions like those in agreements which offer developing countries with special rights. For instance, longer time durations of commitments and implementation or the measures taken to increase opportunities of trade or in matters of technical assistance. Lowering tariffs or even removing tariffs on particular products is one of the many anticipated changes. The graph below shows the anticipated impact of the DDA.
The adoption of the Doha development round came along with certain objectives. One of them was promoting agricultural market access. At present times, the United States of America has seen lower tariffs on agricultural products than the EU and other advanced developing economies in the world. Doha Development Round anticipated a 90% reduction in the farm tariffs considered highest. However, a 66% reduction was to be allowed for the developing nations. This is just one of the many objectives in the Doha Development Round. The United States of America accused the European Union of using sensitive goods to counteract the level of the new access to markets that it was providing. These accusations came up since the European Union sustained higher levels of protection of 8% on its agricultural products. The EU still says that developing nations can have a market access for their agricultural products. The EU provided a tariff and quota free market access to 50 less developed countries.
An agricultural subsidy is another objective. Even though agriculture accounts for 8% of international trade, it is the main income for almost 2.5 billion people. This mainly comes from the developing countries and was one of the main agenda. All the same, farmers from the less developed countries are not in a position to favorably compete with the immensely subsidized exports coming from America, Japan and the EU. The European Union then accepted to cut its overall trade-distorting subsidies to 25%. This was in accordance to the requests of the G20 members of the developing countries.
Industrial market access also came up as one of the objectives. The EU and the United States of America pushed forward negations on market access for non-agricultural products. The EU and the USA were seeking to have access to the big markets of emerging economies like Brazil and China. At the same time, the developing countries were very keen to observe protection for their small industries and sustain their preferential access to the already developed countries. The negotiators ultimately agree that tariffs on industrial products must be reduced based on the commonly known “Swiss formula”. This involved higher reductions for the highest tariffs and the inclusion of a tariff ceiling. However, no agreement was made on the real structure of the formula of reduction or even the cap level. The US and the EU made suggestions that the upper limit on the rates on man-made goods must be 10% for the already developed countries and 15% for the countries in the developing category. The developing countries however wanted a 30% cap which would include softer average cuts. The EU was ready to allow an intermediate tariff cap for developing countries of 20%. However, the US insisted on a maximum difference of 5% between the developing and developed country coefficients.
On services, the objective was to strike a balance in world trade for service delivery. EU had an ambitious deal to liberalize service delivery. This was for the reason 75% of EU’s economy was mainly in services. The increased trade in the service sector would also enhance developmental goals just like telecommunications and IT; insurance, transport and banking sectors have been the main indicators of a growing economy. All the same, trade in services has some restrictions, mainly based on regulations of a nation or state. These include licensing procedures and requirements and technical standards. WTO discussions emphasized on the establishment of disciplines to see to it that domestic regulatory procedures did not introduce barriers to trade. There was significant progress in this sector although negotiations on the access to market were impeded by the failure of movement on industrial and agricultural market access.
Another objective was to facilitate trade. A lot of studies indicate that the facilitation of trade is a game in which all the sides win. Where there is a greater uniformity of procedure and transparency at nation borders, a lot of gain is realized in GDP than the liberalization of tariff. This is particularly for the developing countries since they have relatively less competent customs administrations when compared to members of the developed world. Regardless of the deferment of DDA, the Trade Commissioner of EU called for the members of WTO to pursue further negotiations on facilitating trade agreements and address the capacity constraints of developing countries. This was also expected to help the developing countries to deal with customs modernization costs.
Challenges and Criticism on DDA
With the adoption of the DDA, some fears arose within members that some countries would benefit at the expense of others. The United States of America felt that the developing countries would ultimately not open their markets in a similar way that it was requested. Therefore, the US criticized the DDA and technically quit the talks. The blame was much put on USA for the collapse of the DDA in 2006. There were fears of unfairness where the rich countries could open their markets while the poor countries enjoyed the markets without opening theirs. There was lack of understanding of history and the context in which these discussions were held. There was lack in understanding in the sense that international trade can never be equal. The ‘tit for tat’ reciprocation greatly affected DDA and became a major impediment to its success in the global market.
Well, even after the collapse of DDA in 2006, negotiations which lay a focus on market integration through WTO can yield fruitful results. WTO can first deal with the fear amongst it members and guarantee fairness and equality. One of the of the major developments that can take place in the future would be providing a policy relevant recommendation for the United States of America who among other members felt insecure in the negotiations. These discussions should be brought to a broader agenda. This agenda must incorporate tariffs on industrial products, the topics of interest to the United States of America and other members who felt disadvantaged by the process, changes to the rules of WTO as well as topics which would be of interests to the developing countries.
The Doha Development Round was thus adopted from a ministerial conference of the World Trade Organization. It dates back in 2001 and under went a series of development before its fall in 2006. Its fall was mainly attributed to America’s technical withdraw because of the fears that the measures being put in place would be a disadvantage to the nation. DDA was meant to serve a number of objectives in getting market access for agricultural products, industrial products and services among others. These measures were meant to favor each member of the WTO but things did not turn out as they were projected. Nonetheless, there are high hopes unbounded in the future of World Trade Organization and negotiations can be conducted to bring the agenda back on track. The efforts put in place must put down the interest of each of the WTO members and then address any form of unfairness and flaws in the agenda to achieve a united front. This will make trade advance without any alarming constraints to the WTO members.