A column by T. K. Bhaumik, Senior Advisor, Policy, Confederation of Indian Industry (CII)

Doha Negotiation: Another Missed Deadline?
 

TK Bhaumik points out that the Doha Negotiation is about to miss a crucial deadline of July 2005. What is this deadline about and why is it likely to be missed?

The Doha Negotiation is about to miss a crucial deadline of July 2005. What is this deadline about and why is it likely to be missed? In July 2004, the WTO Members had agreed on a framework for negotiation on modalities which was also called the July 2004 package. Strange as it sounds, it was mandated by the Doha Ministerial Declaration, that the Ministers would first agree on a framework for negotiation and then proceed for modalities negotiations on a cautious note. Three of the four Singapore issues were dropped from Doha Work Programme and the focus was to be on agriculture negotiations and negotiations on non-agricultural market access (NAMA). The July 2004 Framework Agreement was mainly about these two areas of negotiations. The rest did not involve modalities negotiations, the two most critical negotiating items under the Doha Round.

When the July 2004 Framework Agreement was arrived at, it was hoped that by July 2005 Members would be able to reach a stage in agriculture and NAMA negotiations that would be an approximation of a modalities negotiation. In the Geneva parlance, this was called ‘July approximation’. It was not a set deadline, but July 2005 was widely accepted as a deadline to meet and has some significance so far as Hong Kong Ministerial (13-18 December) is concerned. If the Members succeed in reaching an approximation of modalities negotiations by July 2005 on both agriculture and NAMA, chances are that in Hong Kong they would be able to agree on the modalities, and in that case Doha negotiations may be rounded up sometime in late 2006 or may be even earlier.

If, however, they fail to do arrive at an approximation of a modalities negotiation by July 2005, the likely outcome Hong Kong is anybody’s guess. Going by the developments so far in Geneva, it appears that the ‘July approximation’ may be another missed deadline. The state of negotiations on agriculture and NAMA does not inspire any confidence that some kind of approximation on modalities would be possible by July 2005, or even by the time of the Hong Kong Ministerial in December. After the Framework Agreement in July 2004, there had been no progress in negotiations on any of the issues during the rest of 2004. The Geneva-based negotiators have been doing what they have always done: begin from the beginning. For nearly six months since the adoption of July 2004 package, there was hardly any progress in negotiations in agriculture and NAMA.

It was only in May 2005 that there was  agreement on the formula to convert specific duties into advalorem rates, which was first agreed by the group of five interested parties (FIPs), including the US, the EU, Australia, Brazil and India. This agreement was then thrust upon other Members who had agreed to accept it only for the sake of moving things forward. But the Members have to yet agree on fourteen other issues involving agriculture negotiation, of which the most contentious ones are formula for tariff cuts, reduction of domestic support, criteria for special products, sensitive products and special safeguard mechanism. In other words, the light at the end of the tunnel in the case of agriculture negotiation is still far away. The same can be said about the state of NAMA negotiations where again there is a formula to agree upon and sectoral zero component to be accepted by some of the leading developing countries. It is difficult to imagine that negotiations on these two issues can reach a stage of near approximation by end July 2005. Members will have to work harder to make a success of the Hong Kong Ministerial, which clearly looks an uphill task right now.

TK Bhaumik is Senior Advisor, Policy at the Confederation of Indian Industry (CII), New Delhi.

[www.icfdc.com, 6 July 2005]