Requiem or Revival?: The Promise of North American Integration

Chapter 8. The Doha Round: Problems, Challenges, and Prospects

The General Agreement on Tariffs and Trade (GATT) completed the Uruguay Round, its most ambitious round of multilateral trade negotiations , in December 1993. The Uruguay Round resulted in a stronger dispute settlement system, multilateral trade rules for services and intellectual property, more multilateral trade discipline for agriculture and textiles, and the creation of the World Trade Organization (WTO). However, the seven years required to complete the Uruguay Round were an indication of the enormous difficulties that would follow in the first formal WTO negotiating round, the Doha Round. For example, the Uruguay Round designated agriculture and services as built-in agenda items for future negotiation, and these have presented problems since the launching of the Doha Round in 2001. After failed efforts to launch a new WTO round at the 1999 Seattle Ministerial Meeting, the round was launched instead at the November 2001 Doha Ministerial, partly because the September 11 terrorist attacks in the United States had increased the determination of the major trading countries to reach an agreement. However, WTO members papered over serious differences in launching the Doha Round, and developing countries were highly skeptical of assurances that this would be the “development round” that had 147 The Doha Round Problems, Challenges, and Prospects theodore h. cohn 8 08-8201-8 ch8.qxd 7/13/07 4:32 PM Page 147 been promised. Thus the September 2003 Cancún Ministerial, which was to mark the halfway point of the Doha Round, collapsed in disarray over a number of issues discussed in this chapter. The Doha Round negotiations could not resume until July 2004, when the WTO General Council finally approved a package agreement (referred to here as the July 2004 framework agreement) that “unblocked some of the most sensitive and difficult areas of the negotiations.”1 However, major differences persisted, and in July 2006 the Doha Round negotiations were suspended for an indefinite period. This chapter begins with a general discussion of tensions and conflicts that have posed serious difficulties for the Doha Round. The second section focuses on specific issues in the negotiations, and the chapter concludes with some thoughts regarding the Doha Round’s future prospects. Challenges Confronting the Doha Round Conflicting interests and goals among actors have posed serious obstacles to the successful conclusion of the Doha Round. Some of the most salient conflicts are in the areas of North-South relations and North-North relations. North-South Relations In the 1980s developing countries adopted liberal trade policies and were more involved in the Uruguay Round than in previous GATT rounds for several reasons: the South’s protectionist import substitution policies (particularly in Latin America) were unsuccessful, the benefits to the South of special and differential treatment (SDT) in earlier rounds were disappointing, and structural adjustment loans to deal with the South’s foreign debt crisis were linked to the adoption of trade liberalization policies. The South also functioned less as a bloc in the Uruguay Round, and a number of NorthSouth coalitions were formed.2 In exchange for Northern promises to liberalize trade in textiles and agriculture, the South agreed to accept the Uruguay Round agreement’s full set of rights and obligations (the single undertaking), including the agreements on services and intellectual property. However, the South realized belatedly that it “had accepted fairly weak commitments in agriculture and textiles” in the Uruguay Round, “while making substantially stronger ones” in areas of interest to the North such as intellectual property rights.3 The South also argued that the North did not fulfill Uruguay Round promises to provide it with capacity building and technical assistance. Despite its dissatisfaction, the South eventually agreed to the launching of the Doha Round for several reasons. Although the balance 148 Theodore H. Cohn 08-8201-8 ch8.qxd 7/13/07 4:32 PM Page 148 of Uruguay Round benefits favored the North, there were also some significant gains for the South; for example, although the South did not achieve its objectives in agriculture and textiles, the Uruguay Round laid the foundation for further liberalization in these sectors. Perhaps most important for the South was the declaration to include a Doha development agenda, which formalized the next round’s commitment to development.4 Nevertheless, developing countries remain dissatisfied with their role in trade decisionmaking, and this has interfered with progress in the Doha Round. The WTO’s governing councils are plenary bodies open to every member, and...