The World Trade Organization’s general council quietly announced last week that its 153 member countries had agreed to hold a full ministerial conference at the WTO’s Geneva headquarters from Nov. 30 to Dec. 2. Mario Matus, Chile’s ambassador to the WTO, who chairs the general council, explained when the council met on May 26 that the WTO’s rules call for such ministerial meetings every two years, but that it had been nearly four years since the last formal ministerial meetings were held in Hong Kong in Nov/Dec. 2005. This will be a “regular” ministerial conference, Matus said. “I would like to stress the word ‘regular,’ as it has also become clear that this Conference is not intended to be a negotiating session — the DDA are on a separate track.” [DDA is the acronym for the so-called Doha Development Round of multilateral negotiations aimed at slashing tariffs and subsidies]
Talk about a looming PR disaster. Maybe Matus and other diplomats who are stationed in Geneva are naive enough to believe that WTO watchers will fall for the diplomatic doublespeak. Certainly, the hordes of journalists who will be swarming to Geneva to cover the ministerial meetings will be looking for only one piece of hard news: will the Doha negotiations succeed, or won’t they? After all, it was only last December that WTO Director-General Pascal Lamy announced that he would not call ministers to Geneva unless it appeared that a Doha deal was likely to be struck. Reporters have long memories for such contradictions. The Doha negotiations, which have dragged on since 2001, are by far, the most important business before the WTO — a fact that simply can’t be explained away by the general council. If the ministerial meetings conclude on Dec. 3 without convincing evidence of seriousness about successfully concluding the Doha negotiations, reporters will be filing stories asking questions like this: If the WTO’s members can’t find a way to make Doha work, why bother to meet?
Privately, some diplomatic insiders agree that the notion of holding a “regular” ministerial while the Doha negotiations are left hanging is risky business. “Our problem is, without real progress on Doha, it will look awkward,” says one key WTO diplomat. “It will look a little like navel gazing.”
But while some inside players who (understandably) ask not to be identified by name, say they are discouraged, others add that they believe that on Dec. 3, the ministers in Geneva could well be able to announce that the key deals to bring the Doha negotiations to a successful conclusion have been struck The idea is that, by lowering the expectations, space is being created for trade negotiators to reach understandings without the usual political posturing getting in the way. And for sure, there will be ample diplomatic opportunities between now and December to bridge the current gaps in the Doha process. Here’s the forthcoming diplomatic road map that reveals the agenda that could make Doha largely a done deal by the time of the ministerial meetings in Geneva.
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If Doha really does fail, and shake the WTO’s foundations along with it, the two men who will get most of the blame will be President Barack Obama and India’s Manmohan Singh. The last time the Doha negotiations stalled, in July, 2008, the key stumbling block was the inability of the Indians and Americans to cut a deal that would make everything else fall into place. If that happens again in Geneva this Nov/Dec, neither Obama nor Singh will have the excuse that they hadn’t been fully briefed on the consequences of their failing again to reach a deal.
One possible sign that India might be preparing to negotiate in good faith this year has just come from New Delhi, where PM Singh has shunted aside his former trade negotiator, the famously intransigent Kamal Nath, who has been named to a lesser post as minister for road transport and national highways. Credible reports in the Indian press say that Nath has pretended otherwise, but that he was visibly upset with the demotion. Apparently, Singh had grown weary of taking calls from heads of state who complained that Nath’s unhelpful attitude was getting in the way of India’s own economic best interests in concluding the Doha negotiations. Not much is yet known about the marching orders that Singh has given to Nath’s successor, but the feeling in Geneva is that nobody could be worse than Nath.
Will the Obama administration, which has said as little as possible about the importance of the Doha negotiations, decide to provide the vital American support? That question, which is on everyone’s lips in Geneva, can’t yet be answered. One possible ray of hope: In the White House in Washington, D.C., key Obama economic adviser Larry Summers has told visitors he and the president get the importance of Doha, but that “not everyone” in the administration does. Summers insists that the White House needs a few more months political breathing space to position itself to move on trade liberalization and Doha later this year.
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There will be no “green room” of formal negotiations in Geneva this December. There will be none of the all-night negotiating sessions that the WTO is famous for, WTO sources report. Indeed, as last week’s general council announcement indicated, there will be no real expectations of any progress on Doha at all. But still, the space and opportunity will be there for the ministers to work out the key deals privately, without the public posturing that has long dogged the WTO’s formal negotiations. “There is nothing to prevent a group of ministers from getting together over a beer and talking,” hints one trade diplomat. Since some 80% to 90% of the outlines of a Doha deal have already been generally understood, if there is a will to narrow the differences quickly, it could happen.
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And to be sure, by December all the key players will have had ample opportunities to get to know each other very well. The first such important occasion is planned for next week.
The Cairns group of 19 agricultural exporters — including Australia, New Zealand, Canada, and the United States – will meet in Bali on June 8 and 9. The WTO’s Pascal Lamy will be there, as will US Trade Representative Ron Kirk, along with trade officials from Japan, China and the European Union. Kirk will also meet with India’s new Commerce and Industry minister, Anand Sharma, the man who has just replaced the unpopular Nath.
In fact, the personable Kirk has already started working on Sharma, whom he called on June 1 to begin the process of getting to know his Indian counterpart. Various reports of that private conversation say that besides exchanging preliminary views on the current global economic crisis, Kirk and Sharma each expressed the desire to work together to resolve US-Indian differences over the Doha negotiations. While that’s hardly something to take to the bank, it’s encouraging that the initial vibes seem to be good.
In Bali, Kirk will also have the opportunity to get to know better his counterparts from Brazil, South Africa, Australia and New Zealand. These countries are among the most important in the Doha process. Nobody doubts the sincerity of the Aussies and Kiwis in making Doha work, and Brazil and South Africa are leaders in the G-20 group of developing nations. Brazil’s President Luiz Inacio Lula da Silva has been working on the reluctant Barack Obama, stressing the importance to the world’s economy of completing the Doha negotiations; this pressure will continue for the rest of the year.
Mari Pangestu, Indonesia’s trade minister and herself a respected figure in the Doha process, has explained her hopes for the Bali meetings to reporters. “Apart from the Cairns Group discussion, we will also use the opportunity to talk about the wider WTO Doha round,” Pangestu has said.
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More diplomatic networking opportunities on the trade front will come later this month, when the OECD holds its own ministerial meetings on June 24 and 25 in Paris. The meetings will be chaired by Han Seung-soo, South Korea’s prime minister. Key trade officials from Brazil, Chile, India, Indonesia, China and Hong Kong will also be there, along with Australian trade minister Simon Crean (who will hold his own private sessions to stress the importance of Doha).
USTR Ron Kirk will be in Paris, along with Jacob Lew, the high-powered deputy secretary of state for management and resources. Lew is a former director of the Office of Management and Budget under President Bill Clinton, and a former chief operating officer of Citi Global Wealth Management. Lew’s official State Department bio describes him as “alter ego to Secretary Clinton.” Does this suggest that Kirk will have important backing from Clinton in the Cabinet, should he get serious about Doha?
Other important figures in WTO circles who will be in Paris for the OECD meetings include Sweden’s trade minister, Ewa Bjorling; Hong Kong’s secretary for commerce and economic development, Rita Lau; and Chinese ambassador to the WTO Sun Zhenyu. By the end of this month, everyone important in the Doha negotiations will have had the opportunity to see if a deal can be struck in Geneva by Dec. 3.
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All of the above officials will have even more opportunities to work out their Doha differences later this summer. Italy is hosting a G-8 meeting in Rome, which will also involve observers from the so-called G-5 developing countries: Brazil, China, India, Mexico, and South Africa. And on July 21 and 22, the members of the Asia-Pacific Economic Cooperation forum — a 21-country group that accounts for some 54% of world GDP and more than 43% of world trade — will meet in Singapore.
Meeting in Singapore, a prosperous, first-world city-state that personifies what can be achieved when political leaders understand the importance of expanding international trade, ought to be conducive to a good negotiating atmosphere for the Doha Round. At least, one could postulate that. But then again, Seattle is another such shining example of the benefits of trade, and that didn’t prevent the stunning collapse of the WTO’s 1999 ministerial meetings there. But in Singapore, as in the other cities where important trade officials will be meeting this summer, Doha will be much discussed.
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On May 28, the Obama White House announced that the next G-20 meetings will be held in Pittsburgh on Sept. 20. The heads of state will be discussing what they should do to improve the global economy. This is the most important event that will take place before the WTO ministerial meetings begin in late November. If President Obama and his peers in the key WTO member countries are going to agree to instruct their trade negotiators to go to Geneva in Nov/Dec and work out a deal on Doha, their meetings in Pittsburgh will offer that opportunity.
It could happen. Whether it does or doesn’t, of course, will depend heavily on whether the most important man in the room in Pittsburgh will demonstrate true leadership where trade is concerned. Right now, half way through his first year as president, Barack Obama — whose political ties to US protectionist lobbies (autoworkers, steelworkers, the textile lobby, subsidized American farmers, etc.) are very close — has shown little inclination to spend political capital aimed at expanding international trade. Perhaps he never will.
One way or the other, when the WTO’s ministerial meetings conclude on Dec. 3, Obama watchers will have a very important piece of evidence as to whether America will continue to exercise its vital leadership role in international economics. If Doha fails, American prestige in international economic circles will be greatly diminished. Presently, though, it remains uncertain as to whether the new American president, with so much other important business in his in-box, fully understands this.