U.S.: No Doha Deal At End of March

Posted December 13, 2006 in [Trade]

Aileen Kwa of Focus on the Global South reveals that the deadlock in the current round of global trade negotiations at the WTO is lekely to continue despite attempts to revive them through series of 'fireside chats.'

US: No Doha Deal in End March

Aileen Kwa
Focus on the Global South
6 December 2006

Even as WTO members are trying to use the “window of opportunity” to wrap up the Doha talks by the end of March, through “fireside” and other informal chats, an informant close to the USTR has said flatly that this timeline cannot be met.

“The current TPA cannot be used. There is no chance to wrap up by July. We are not working on that time-frame. If we work on that basis, we would need to present the whole package to Congress (by early April). This includes not only the Doha modalities, but also our schedules, as well as information on the domestic laws that have to be changed. That process takes 6-9 months”.

Discussions between the Democrats and USTR have not yet even begun. The new Congress takes over in January. It would take Congress about 2-3 weeks to form their new committees. Internal negotiations and discussions would only begin in February. US’ position on the Doha Round would have to be co-ordinated with their plans for the new Farm Bill. (The current farm bill was authorized in 2002, and expires on Sept 30, 2007). This discussion will be a priority in the new trade and agriculture committees, but again, only commencing in February.

These comments follow on the heels of the WTO Director General Pascal Lamy’s admission over the weekend, that what he had earlier termed the “window of opportunity”, has already passed.

“I accept the WTO round will now not be completed before July next year…So this round will fail unless we get some sort of extension to the fast trade [authority]”.[1]

The US trade promotion authority (TPA) allows the US Administration to negotiate trade deals, subjecting them only to a yes or no vote in Congress. The current TPA expires on 1 July 2007. Without a TPA, any negotiated deal would be scrutinized in detail by Congress, and could easily be unraveled. Lamy was therefore pushing for the Doha deal to be sealed within the timeframe of the current TPA. That is, the full package would have had to be presented to Congress by 2 April 2007, three months before TPA expiry.

Davos – Another Talk Shop
The Swiss government is hosting a Mini-Ministerial WTO meeting on the sidelines of the Davos World Economic Forum towards the end of January. In Geneva, negotiators see this event as possibly adding spark to the floundering talks. As Peter Young, a spokesperson for the EC commented, “Davos seems likely to be an important signal for possible re-engagement.” Similarly, a Brazilian delegate commented that “Nothing’s going to happen, at least until January”, referring to the Davos event.

USTR maintains that the Davos meeting is an important occasion for reaffirming the commitment to Doha. However, informed sources from within say that here are no expectations for any movement. The meeting would at most last only a day. For a breakthrough, a longer period of time is required. As of the time of writing, the US is not intending to send their technical people, another indication that they expect it to be another high-level talk shop.

Prognosis for the Doha Round
The current TPA is dead. The outcome of the Round now depends on whether the Democrats will be willing to push through an extension or renewal of the TPA when it expires in July. According to Public Citizen, a Washington-based advocacy organization, this will require new legislation to be moved through the regular legislative process, a scenario that could be fraught with difficulty, and where “any one Senator can jam it up for months”.[2] The Democrats will be looking for strengthened language on environment and labour in the Doha package. Without their desired changes in language, “they can simply refuse to ever schedule the Fast Track bill for a vote”.[3]

However, analysts do not rule out the possibility of TPA extension. According to some press reports, major agricultural groups are lobbying to have the Farm Bill extended by a year. Concurrently, Congress could perhaps be persuaded to extend the TPA also by a year, in order to wrap up the Round. Whilst the new Congress is likely to place importance in “saving” the multilateral system from supposed collapse, their sights also will be set on the 2008 Presidential elections, making it difficult for them to vastly improve on the current US offer in cutting agriculture subsidies.

In order to avert blame, US continues to reiterate that they are willing to move on domestic supports, but only if there is significant improvement in the market access offers of their trading partners in agriculture. This is where the rubber hit the road in July 2006, when talks were suspended. Both the EU and the bulk of developing countries find the US position untenable, and any major shift remains, fortuitously, out of sight.

[1] The Sunday Telegraph 3 December 2006. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/03/cntrade03.xml
[2] Public Citizen “Clarifying the U.S. Fast Track Timelines and their Relation to WTO Negotiations”, 9 November 2006.