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No. 22 of 2014 

WEDNESDAY, APRIL 2, 2014     

 

   

Filed from Portland, Oregon  

     

Chere here for Monday's quote on the WTO and
the Ukraine Crisis.
 
THE WTO: CAVEAT TO AN UP-BEAT REPORT

"So, while we have seen this constructive spirit, we have not seen, at this stage, any real shifts in anyone's position."

Keith Rockwell
March 27, 2014
CONTEXT
Keith Rockwell is the Director of the Information and External Relations Division of the World Trade Organization, and he was the lead-off speaker at the GBD colloquium last Thursday, March 27.  The title of that session was Beyond Bali: Ambition and Realism at the WTO.  Mr. Rockwell more than delivered on both counts. 

Essentially the WTO negotiations, the Doha Round, floundered in the doldrums for five years, after almost achieving a breakthrough in the summer of 2008. But things are different now.  Mr. Rockwell was still just warming up when he said of the WTO:

"Now the place has its buzz back.  Michael Punke, the U.S. ambassador to the WTO who many of you know put it very well when he said, 'The lights are on late at night in the Centre William Rappard.'  And I would expect that is going to be the case throughout this year as well.  The Bali results have re-energized us, and they have made us relevant again as a negotiating forum."

And yet, as in today's featured quote, Mr. Rockwell also acknowledged the difficulties facing the WTO and its still new Director-General as they try to move from Bali's incremental success to a broader one.   Some of those difficulties are in capitals - Washington as well as others - and some are inherent in the negotiations.
 
For example, in discussing attitudes in capitals, Mr. Rockwell said:

"In this town [Washington], as I know, many people have kind of turned off to the whole notion of the Doha Round since the 2008 Ministerial.  We dealt with a lot of eye-rolling two weeks ago when the DG [Roberto Azevêdo] was here and he would mention the negotiations.  But he is making a very sincere effort to try and find a way that might make this possible." 

In one of many comments on the challenges in Geneva, Mr. Rockwell said:

"...[T]here is a fresh feeling going through these negotiations, but there is still disagreement.  And these disagreements lie in some important areas.   One of them is the extent to which the existing negotiating texts should be a or the basis for future negotiations."  

These comments are all elements in the discussion of the question: Is a larger and meaningful conclusion to the Doha Round possible?  (Or was Bali it?) We will return to that later in this entry and in future ones. First, though, we need to take note of what the WTO and its Director General are trying to achieve this year as well as some of the specific issues Mr. Rockwell touched on in his talk last Thursday.

Like Mr. Azevêdo, Mr. Rockwell was crystal clear about the WTO's immediate goals.  "We have two objectives for 2014," he said. "The first is to implement the Bali Accords, and the second is to put the ... well, I'm going to say it ...the Doha Round back on track."  

Trade Facilitation and the Bali Accords.  The Trade Facilitation Agreement, as Mr. Rockwell explained, is one of ten agreements that make up the Bali package, but it is the only one that is legally binding.  Its potential advantages are profound.  The requirement that every WTO member have a website that shows the documents and fees required for getting goods into that country is eye-popping.  So are the macro estimates, like the one from the Peterson Institute suggesting that the Trade Facilitation Agreement could generate, "a $trillion in additional global output and in new trade flows," Mr. Rockwell said. 

Technical Assistance.  But those brass rings are not party favors.  They have to be worked for, and a good portion of that work falls under the heading of "Technical Assistance."  Mr. Rockwell described the situation this way:

"As you know, many of the developing countries have signed on to this Trade Facilitation Agreement because they are assured of having the support they will need to implement, which for many of them will be very difficult.  So, what needs to be organized is a coordination between donors and recipients.  Needs assessments have to be put in place.   And there needs to be that money flowing in and that training put in place, so that folks can begin to get their commitments implemented." 

A Roadmap for Doha.  Mr. Rockwell said that part of the mandate from the Bali Ministerial was a direction to Director-General Azevêdo to develop a roadmap for completing the Doha Round by the end of this year.  That "roadmap" is still a work in progress, but some of its elements are becoming clearer.  "In the DG's view," Mr. Rockwell said, "there is no way we can have a next tranche of agreements which does not include agriculture in a meaningful way." 

That's one element.  Another, closely related element is the idea that there must now be more discussion of the trade-offs across the three main negotiating areas of industrial goods (NAMA), agriculture, and services.   As Mr. Rockwell put it, WTO members need to break out of the sectoral silos and engage in more "horizontal" negotiations.

Services and the Other Negotiations.  Mr. Rockwell alluded to some of the major regional and bilateral negotiations going on in the world - things like T-TIP and TPP - but the ones he talked about specifically were the various negotiations going on in Geneva.   Some of those - the negotiations on the Government Procurement Agreement and on the Information Technology Agreement for example - are, in fact, WTO negotiations.  Others, notably the negotiations on a Trade in Services Agreement, TISA, are being conducted outside the WTO framework. 

Mr. Rockwell talked positively about the TISA negotiations.  "[They] are actually moving with great pace and momentum," he said.  But he also expressed some concern.  Services are a key component of the Doha Round, and, as Mr. Rockwell put it, "People are now acknowledging the importance of having an equivalent level of ambition, an equivalent outcome, in services as in ag. and NAMA ... ." But that raises a question and Mr. Rockwell asked it:

"What will be the interplay between the TISA negotiations and the post-Bali negotiations [on services] inside the WTO?  Will it be a catalytic effect?  Will this encourage people to come forward with more and better offers?  Or, will there be a paralyzing effect as people wait to see what happens in TISA before they move in the WTO context?  I don't know how outcomes in one of these areas may affect the other, but this is going to be something very important to keep an eye on."

COMMENT
The picture Mr. Rockwell drew of the WTO today was compelling, candid, and because of that candor, very credible.  We encourage you to listen to the full presentation.  The audio file is available on the GBD website.

As for the overarching question, the future of the Doha Round and the WTO's negotiating function, we don't know how this drama is going to play out.  Like everyone else, we are just going to have to wait and see.  In trying to imagine the meal that Chef Azevêdo and the WTO members will ultimately put on the world's table, it is useful to think about some of the ingredients.

We begin with the first sentence of Susan Schwab's Foreign Affairs article published in the spring of 2011.  Ambassador Schwab was the U.S. Trade Representative who tried to get a Doha deal in 2008.  Three years later she wrote, "It is time for the international community to recognize that the Doha Round is doomed."

In the wake of the WTO's success at Bali, maybe that judgment should be suspended a while longer.  The issue is not really whether the game is over now but whether the WTO would ever be willing to face up to such a reality.

Mr. Rockwell's recognition that "the trading landscape is very different today than it was in 2001," was encouraging.  More encouraging was his comment on the urgency of action.  "We have a new lease on life as a result of the Bali outcome," he said, "but we really do not have a great deal of time to try and bring this thing to closure."

And more encouraging still is the fact of the roadmap exercise.  Our optimism here may spring in part from the fact that we are so far removed from the process that we do not know how unrealistic it is.  Still, it seems to us that, while it may be political impossible for people in Geneva to ditch the name of Doha, the roadmap just may give them the flexibility they need to define it in a way that is doable.

We will end on a somewhat whimsical note. For years we have been struck by the profound difference between what we see in TV dramas - cop and/or courtroom - and our understanding of WTO negotiations.  A not uncommon scene in the TV dramas is the one in which the district attorney confronts the man accused of a crime that could put him behind bars for life.  "Plead to manslaughter," the DA says, "and we'll knock it down to five years."  The important part is what he says next: "That offer is on the table until 10 a.m. tomorrow morning.  After that, it's gone.  Think about it."

In contrast, there seems to be an assumption that offers made in the WTO are on the table forever, no matter how much the world changes under the feet of the negotiators.  That's not workable.  And that's why one looks to the Director-General to blow the whistle, and when the game is over to say so.  DG Azevêdo did that in Bali.  He told the members there that, in effect, Bali was their last chance to get a deal on Trade Facilitation.  As for Doha, it may not be over yet, but Bali was the two-minute warning.

SOURCES & LINKS
Beyond Bali - A Presentation by Keith Rockwell takes you to the audio file for Mr. Rockwell's presentation at the Global Business Dialogue on March 27, 2014.

After Doha is a link to Ambassador Susan Schwab's article in the May/June 2011 issue of Foreign Affairs.  

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