the doha round impasse what can developing countries do l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
The Doha Round Impasse: What Can Developing Countries Do? PowerPoint Presentation
Download Presentation
The Doha Round Impasse: What Can Developing Countries Do?

Loading in 2 Seconds...

play fullscreen
1 / 35

The Doha Round Impasse: What Can Developing Countries Do? - PowerPoint PPT Presentation


  • 261 Views
  • Uploaded on

The Doha Round Impasse: What Can Developing Countries Do?. Alan V. Deardorff Robert M. Stern University of Michigan. The Doha Round Impasse. The Round Launched in 2001 as the Doha Development Agenda Intended to continue the multilateral trade liberalization of 50 years under the GATT

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'The Doha Round Impasse: What Can Developing Countries Do?' - hastin


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the doha round impasse what can developing countries do

The Doha Round Impasse:What Can Developing Countries Do?

Alan V. Deardorff

Robert M. Stern

University of Michigan

the doha round impasse
The Doha Round Impasse
  • The Round
    • Launched in 2001 as the Doha Development Agenda
    • Intended to continue the multilateral trade liberalization of 50 years under the GATT
    • Promised to give special attention to needs of developing countries
the doha round impasse3
The Doha Round Impasse
  • The Impasse
    • Negotiations stumbled in Cancun in 2003
      • Revived in 2004 but barely advanced in Hong Kong in 2005
      • Ceased for months in 2006
    • Now the leaders of EU, US, WTO are
      • Pushing to reach enough agreement for the Round to continue
      • Hoping to persuade the US Congress to extend US authority to negotiate (“Fast Track”)
    • Prospects are dire
the doha round impasse4
The Doha Round Impasse
  • The Questions
    • What can developing countries do
      • To help the Round succeed?
      • To achieve their objectives if the Round fails?
    • How, in any case, should developing countries manage their trade policies, with or without cooperation from others?
outline
Outline
  • How we reached this impasse
  • Trade Interests of Developing Countries
  • Structure of WTO Negotiations
  • Options for Developing Countries
  • Conclusion
how we reached this impasse
How we reached this impasse
  • The Doha Round
    • Began at the Ministerial Meeting of the WTO in Doha, Qatar, in 2001
    • High hopes for real progress
      • By developing countries
      • For developing countries
    • Hence, the “Doha Development Agenda”
how we reached this impasse7
How we reached this impasse
  • Central Issues of the Doha Round
    • Developed country policies that hurt developing countries
      • Protection on imports of agriculture and non-agricultural labor-intensive exports
      • Subsidies in agriculture
    • Developing country protection in all sectors, including services
how we reached this impasse8
How we reached this impasse
  • Progress, and lack of it
    • Cancun Ministerial September 2003: Failed to reach agreement on the framework for a negotiating text.
      • Group of 20 (+ or −) Developing Countries rejected draft proposed by US and EU
        • It gave too little on agriculture
        • It asked too much from developing countries, including 4 “Singapore Issues”
      • Cancun meeting ended in failure
how we reached this impasse9
How we reached this impasse
  • Progress, and lack of it
    • Summer 2004: framework text agreed, dropping all but one of the Singapore Issues
      • Kept “trade facilitation”
how we reached this impasse10
How we reached this impasse
  • Progress, and lack of it
    • December 2005: Hong Kong Ministerial achieved “success” but made hardly any progress
how we reached this impasse11
How we reached this impasse
  • Progress, and lack of it
    • July 2006: WTO Director General Pascal Lamy
      • Acknowledged lack of progress
      • Suspended negotiations
how we reached this impasse12
How we reached this impasse
  • Progress, and lack of it
    • Today: Negotiators are talking again
      • Hope is to make some progress
      • Then persuade US Congress to extend “Fast Track” (US trade negotiating authority)
how we reached this impasse13
How we reached this impasse
  • Importance for developing countries
    • Doha Round was never really about development per se, in spite of its name
      • Reducing trade barriers is helpful, but not sufficient for development
      • WTO hasn’t the power or expertise to assist development
how we reached this impasse14
How we reached this impasse
  • Importance for developing countries
    • Doha Round was about reducing the trade barriers and other policies that hinder development
      • Both by developed countries against developing-country exports and by developing countries themselves
      • All were a residual of the way that “Special and Differential Treatment” had been granted to developing countries:
        • They “gave” nothing in previous negotiations, and they got nothing in return.
trade interests of developing countries
Trade Interests of Developing Countries
  • Developing countries have a shared interest in exporting
    • Their greatest interest in the Doha Round is market access for their labor-intensive exports
trade interests of developing countries16
Trade Interests of Developing Countries
  • Exceptions to this shared interest
    • If they export different things
    • If they export to each other
    • If some already have preferential market access that would be eroded
trade interests of developing countries17
Trade Interests of Developing Countries
  • Competition among developing countries does not justify protection
    • Many smaller countries fear competition with China and India
    • This fear of competition is the same that countries throughout history have used to justify protection
    • The fear is groundless or at least overblown: even small countries have comparative advantages
trade interests of developing countries18
Trade Interests of Developing Countries
  • Some developing countries face erosion of preferences
    • This fear is real and not avoidable
    • They are likely to have to switch to sectors where they don’t need preferences, and this will be costly
    • Hope is that they’ve used their preferential gains productively
trade interests of developing countries19
Trade Interests of Developing Countries
  • Developing countries can gain by cooperating
    • Interests are sufficiently common that they can and should act together
    • Actions of the G-20 in Cancun were encouraging, even though they led to the failure of the meeting
    • Can they act collectively outside the WTO? Probably not
structure of the negotiations
Structure of the Negotiations
  • Developing countries have played only a small role in past negotiations
    • In the past deals have been made between US and EU, then sold to others
    • Developing countries did play a small role, with a handful included in each particular negotiation (the “Green Room”)
    • But there was never any formal representation in WTO decision making
structure of the negotiations21
Structure of the Negotiations
  • The “Development Agenda” should provide assistance to liberalization, not exemption from it

Should the Doha Round include a bias in favor of developing countries, to correct for the past?

    • No, not if it would be interpreted again as exempting them from making “concessions”
    • Yes, if it can provide resources to help them liberalize
options for developing countries
Options for Developing Countries
  • Act collectively to reinvigorate the WTO
    • Can they matter? Clearly yes, since it was their own reluctance that contributed to the impasse
    • Major developing countries (the G-20) must recognize that trade liberalization is in their interest
options for developing countries23
Options for Developing Countries
  • Act collectively to reinvigorate the WTO
    • It may help to note that developing countries have the most to gain from liberalization, in relativeterms, far more than the developed countries
    • If the Doha Round fails, it is the developing world that will lose the most
    • The Doha Round is not primarily a rich-country game
options for developing countries24
Options for Developing Countries
  • Act collectively to reinvigorate the WTO
    • What they must do:
      • Continue to press hard for removal of tariffs and subsidies on their products in developed countries
      • And offer meaningful tariff cuts into their own markets
options for developing countries25
Options for Developing Countries
  • Encourage and cooperate in Aid for Trade initiatives
    • These initiatives, by the IMF, World Bank and others, would provide financial assistance in implementing and dealing with liberalization
    • This is also explicitly called for in the Doha Round Declaration
    • What is needed are firm commitments, not just statements of approval.
options for developing countries26
Options for Developing Countries
  • Regional and/or bilateral arrangements
    • These are usually Free Trade Agreements (FTAs), often with the US, EU or other developed country
    • The current surge of FTAs started when the previous GATT round foundered in the 1980s, stimulating the US-Canada FTA and later NAFTA
    • Today there are almost 300 of them
options for developing countries27
Options for Developing Countries
  • Regional and/or bilateral arrangements
    • These are
      • Inferior to multilateral free trade
      • Potentially distinctly harmful
      • But in practice most have been beneficial to the world
slide28

Units: $billions

Source: Brown, Kiyota, and Stern (2006)

options for developing countries29
Options for Developing Countries
  • Regional and/or bilateral arrangements
    • Choice of partners
      • Neighbors – most likely
      • Other developing countries – little to gain
      • Developed countries
        • Most to gain
        • Danger of asymmetric power: May be pressed to give more than they wish
options for developing countries30
Options for Developing Countries
  • Regional and/or bilateral arrangements
    • Structure of FTAs
      • Should approach and approximate multilateral free trade
      • If FTAs are formed between A&C and B&C, then A&B should also form FTA
        • Rules of origin should then encompass all three
        • Might as well then enlarge to a single FTA of AB&C
      • All FTAs should permit new entrants easily
options for developing countries31
Options for Developing Countries
  • Focused initiatives in sub areas
    • Industry agreements have been successfully negotiated among developed countries
    • These are unlikely to work among only developing countries
    • Between developed and developing countries there are dangers, as the trade tends to go only one direction; concessions are one-way only
options for developing countries32
Options for Developing Countries
  • Unilateral liberalization
    • If tariffs are high and/or the developing country is small, and if the Doha Round is failing, don’t wait! Liberalize unilaterally
      • The tariffs are damaging the country and undermining development
options for developing countries33
Options for Developing Countries
  • Unilateral liberalization
    • But if tariffs are already low and the country is large enough for its markets to matter to others, then further unilateral liberalization is probably unwise
      • Keep them as “bargaining chips” for future negotiations
      • Potential market access abroad may gain more than reducing low own tariffs; worth waiting for
conclusions
Conclusions
  • What is best for developing countries?
  • That’s easy: Success in the Doha Round
    • That success, as well as the full benefits of success to developing countries, requires that they offer to reduce their tariffs
    • Developing countries must recognize that tariff reductions are in their interests
      • For the traditional gains from trade
      • For “buying” market access for their exports
conclusions35
Conclusions
  • If the Doha Round fails, then the best remaining options are
    • Aid for trade
    • Bilateral/regional FTAs
    • Unilateral liberalization in most, but not all, cases