Doha Round

Doha development round refers to the talks which commenced on November of 2001 with the aim of reducing trade barriers globally. The World Trade Organization (WTO) director Mike Moore headed the talks. The Doha round was aimed at stimulating global economies through promotion of trade. The major sectors which could have benefited from the initiative include agriculture non-tariff barriers and industrial tariffs. After the Doha, Subsequent talks were held in Paris 2005, Potsdam 2007, Geneva 2004, 2006 and 2008. However, the talks stalled prematurely without concluding its intended purpose of garnering the support of the members present at the meeting. The issue of contention was the conflict of interest between the developed nations (United States of America, Japan, and the European Union) and the developing nations (South Africa, India, and Brazil)

According to Stone, the developed nations are in possession of huge privileges, which give them voting rights over the other states. This means that they can always vote for their own interests first at the expense of the other members who possess limited voting rights. As such, it is highly probable that the developed nations led by the United States with 17 votes, did not agree to the demands of the developing nations. This implies that whatever aspect the US considered being of no importance to its interests they could easily do away with easily. The developing nations have always strived to acquire favorable trading opportunities, which can enable them to trade on the same level with the developed countries. On the contrary, the latter sees this as a threat to their hold on global influence. Trade is a major factor in the international development and hence in allowing all countries to have the same rights literally means yielding the dominance, which they have always possessed. This is a fact, which the world superpowers would rather avoid at all cost than entertaining it. The US fought hard to achieve its global dominance and it would not want to see it wane under no circumstance whatever. The coming of the Doha rounds, therefore, was a threat to the perceived world dominance, which the US possessed and hence had, to do all it could under the circumstance to deter changes that would render it vulnerable to external trade influences. By ratifying the agreement the country would have effectively relinquished its ability to initiate barriers to products being imported into the country and hence compromising its agricultural activities. This factor was evident in the case of all the other developed countries who would suffer the same fate as the US.

The World Trade Organization developed under the guidance of the first world countries with an intention of furthering their interests and nothing else. In fact, WTO is an amalgamation and offshoot of International Trade organization (ITA) and General Agreement on Trade and Transfer (GATT) formerly developed nation’s tools of trade and agreement.  It is on this line of thought that the United States and the other developed countries decided to be the major members of the trading organization. It also a fact that the developing countries were the first to discover the efficacy of the trading organization in terms of fostering trade. As such, they would not want to relinquish their influence on the organization in favor of the other developing countries.  Moreover, the need to trim external aggression and domination from other parties informed their decision to take all the majority voting rights. This therefore effectively curtailed all advances from rival groups like china and the developing countries in terms of controlling the organization. Therefore, it was not likely that they would think on the same line with the developing countries who in this case were hell bent on acquiring the same rights.

The fact that the developed countries have the majority powers in the decision-making process implies that the executive of the organization who are supposed to be the arbitrators in the agreements being made have been out shadowed and rendered almost useless. It, therefore, implies that all the decisions made will in most cases be skewed towards serving the interests of the major powers at the expense of the developing countries. During the Doha rounds, it was likely that the developed countries held the other players at ransom with an intention of having their agenda placed first at the expense of the other countries’ agenda. With the executive of the organization being useless, it was therefore quite difficult to find a neutral position during the negotiation and hence the collapse of the talks. The developed countries would easily arm-twist the organization into fulfilling their demand. This would mostly happen without the knowledge of the other players as everything would appear normal.

It is quite clear that the world trade organization is under the control of the developed countries; hence, it is quite difficult for the developing countries to get fair treatment, as the former will always be interested in pushing their own agenda before thinking of the others. The W.T.O. in most of its activities has always tended to lean on the side of the biggest trading parties of which the developed countries make the entirety of this coalition. Apart from that, the aspect of the organization’s subjectivity has always reared its head in the formation of the appellate councils where the developed countries are always given preferential treatment. It is also from this aspect, that the decisions made by the organization in most cases are tailor-made to suit the interests of the developed countries and specifically the US. According to Stone, the wordings of the judgment reflect the interests of the developed countries even in the cases where the ruling is clearly against them.  This factor largely contributed to the collapse of the collapse of the Doha round, as the developing countries were aware that the organization is always on the side of the developed countries. Suspicion and clear mistrust during the exercise clearly emanated from this issue.

The other factor that has always made the decisions made by W.T.O skewed and in favor of the major developed countries is the fact that the implementation of the resolutions its will always be dependent on the nations trading capabilities. The fact that the developed countries transact huge volumes of products implies that all the resolutions passed largely will be in their favor.  The United States is the world’s biggest trader hence it has the capabilities to implement most of the resolutions made by the trade organization. In fact, the country singlehandedly has been in charge of enforcing sanctions on those countries that fail to be up to standard as far as trading issues are concerned.  As such, the Doha rounds were largely under the control of the developed countries and not the developing countries in spite of the fact that they may have appeared as equal parties at the negotiation table. The negotiations therefore led by the developed countries who were in a campaign of fostering their own interest as attributed to their retreat on the realization that the developing countries will not yield to their demands. The developing countries generally not only contribute a small fraction of the trading activities transacted globally but also earn less because it deals in raw goods.

According to the Doha ministerial declaration, the convention aimed at alleviating poverty and improving the living standards of the developing countries having in mind the fact that most of the members of the trade organization are the developing countries.  This assertion by the council greatly hampered the involvement of the developed countries who developed a perception that the Doha round was something akin to a charity event. The United States and other developed nations took this as an implication that they were to open their doors for the products from the developing countries like India, South Africa, and Brazil without having to expect anything in return. All parties regard the issue of charity with much caution, as it is likely to subject them to financial draining with no financial gain. Moreover, the developed countries focused on initiatives, which would give them more advantage on global issues and not vice versa as portended by the objectives of Doha round. The passage of the agreements could have seen a substantial decrease in the influence wielded by the developed countries as trade is pegged on global leadership. The more trade a country transacts is directly proportional to the power it wields in global politics. As such, the dragging of feet witnessed throughout the process attributed to the mindset that they were not likely to benefit from it (Arndt, 381). The developed countries were not willing to see its powers wane under any circumstance. Doha round would have seen the coming into realization of this deeply rooted fears.

In practice, the Doha round was specifically looking at ways in which to tackle Dumping practices by looking at the antidumping legislations. The developing nations have been large beneficiaries of the anti-dumping measures since the dawn of the international trade organizations. This trend was also visible during the WTO regime whereby the US was responsible for 12% of all anti-dumping disputes raised followed by Australia and Canada at 5.7% and 4.2% respectively. From this, it is evident that the US has benefited greatly from the antidumping exercise; therefore, a threat to it was an upfront threat to its jurisdiction. A country that initiated the disputes stood to benefit financially as a payment for the financial losses caused by the adversary. This factor there can provide a probable explanation for the detour taken by the developing nations to derail and drag the process for a long time (Stone). The US government would not have been willing to undertake anything that would make it vulnerable to exploitation from the developing countries.

The developing nations who were the potential beneficiaries of the Doha round did not display enough commitment in the process. It is apparent that in such a case where they stood to gain a lot in terms of development they had to be more proactive as compared to the developed countries. On the contrary, the developing countries were not willing to compromise on their stands. They would rather expect a compromise from the developed countries but not on their own side. For instance, the West African countries with large cotton production rates eyed the U.S market. However, the US was not willing to lower the subsidies to its cotton industry thereby effectively curtailing the wishes of the developing nations. This aspect greatly undermined the pace of the talks as with no seriousness shown from the developing countries. On the other hand, the developed countries keen on gaining economically, could not accept a raw deal. It was, therefore, a push and pull endeavor with each not willing to make a compromise.

The other contributing factor to the standoff was the mindset that development could be witnessed even without the help of the Doha initiatives. The emerging nations are a testimony to this fact. In spite of the many challenges, which the global economy has been experiencing in the recent past the growth, the trajectory of these countries has been steep. Their resilience in the turbulent economic atmosphere largely informed their decision to be more adamant in their negotiation terms with the developed countries (Doha Development Round, 219). The other developing countries must have borrowed this credence as they came to a decision not to budge as demanded by the developed countries. Literally if they could manage to weather such challenges with a great ease then it was utterly possible that the underlying conditions and regulations were not as bad as portrayed. The need for other initiates, therefore, seemed out of place in such prevailing circumstances. As a result, they viewed themselves as not being desperately in need of the initiatives mooted. It was, therefore, imperative that if anything was to be changed, then it had to possess a high probability of impacting positive change and not the confusion marred Doha round. It was due to this that the developing countries were not willing to settle for anything short of developments. The underhand deals and give and take evident in the round were very different from what they expected from the developing countries.

No deal is better than a bad deal was another aspect, which informed the decision made by the developed countries. The US and its partners developed cold feet as far as the removal of subsidies on its agricultural products is concerned. It is clear that such a factor would have seen a huge influx of agricultural products to the US hence damaging the farmers’ hopes of making a living. Essentially no country would be willing to commit itself to agreements that would later come to jeopardize its economy (Bagwell). The political representations of the different countries, therefore, held to their guns demanding better treatment from the other members. In contrast, the developing countries stood to lose less in case the deal was signed as their products consist mostly of agricultural goods, which were the major beneficiaries of the convention. On the other hand, the developing countries would have stood to lose its markets as attributed to the low-cost products emanating from the emerging markets like china Brazil and South Africa where labor and raw materials are available in large quantities. The situation in these countries is directly opposite of that being witnessed in the developed countries where production of agricultural materials is driven be government subsidies. This, therefore, advised the manner in which the members approached the whole convention.

The fact that none of the parties was willing to initiate the talks greatly hampered its development from the beginning. The Doha round which began in 2001 stretched for almost a decade with no success in sight. The sluggish pace of adoption largely attributed to the unwillingness of the parties to present their demands. Nonetheless, the lack of leadership from the major world powers rendered the whole exercise a futility, as no one would be willing to ruffle feathers with such trade giants. Each time the rounds were scheduled, little progress was made, as the members were uncertain on what they wanted. The United States, in particular, hesitated in all the steps it took. The fact that the U.S is the global leader in all matters traded included meant that the other members were looking up to it for direction and guidance on the way forward. It, therefore, does not help that in contrast, it was the one, which rejected most of the resolutions passed by the other parties. For instance, it rejected the demands made by the developing countries concerning its cotton subsidy arrangement. In retaliation, the U.S demanded that China opens its markets for cotton products as a precursor for it to lift its subsidies on the same.

The developing countries, on the other hand, were not privy with what the Doha round aimed at fulfilling. These countries have generally regarded all the initiatives taken by the west with suspicion and this was one of that sort. From the living memory, it is evident that the developing countries are still reeling from the effects of colonialism, propagated by the West and specifically the countries forming the European Union. As such, the Doha round had a connotation of western agenda and the developing countries would take none of it. Probably, they had had enough suffering already during the 20th-century colonialism. This combined with the fact the trade organization conducts its activities under the prerogative of the developed countries meant that any issue suggested by it was seen as reflecting the demands of its creators.  It is from this that we see the developing countries not being in a hurry to give suggestions on the negotiation. The developing nations would rather wait to see what the developed countries would offer than give them their opinion on the issues. This, therefore, played a huge role towards ensuring that the whole process was subjected to postponements with no substantive steps being made.

As highlighted in the case above, it is evident that the parties in the Doha rounds were not willing to experience any change as per the terms proposed by the World Trade Organization (WTO). The organization indecisiveness and the failure to show impartiality largely contributed to its inability to arbitrate the talks. Moreover, the developed and the developing countries both had their own reserved doubts concerning the whole engagement. As such, they failed to initiate any meaningful deliberation on the matter. Personal interests as depicted by each of the members led to the stalling of the convention, as no one was willing to understand the propositions of the other. Therefore, the conventions failure is attributed to both the members’ acrimony and the organizations subjectivity.

 

 

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