Samuel C Park Jr. Professor of Economics

1
Saving Doha or Saving The WTO?
T.N. Srinivasan
Samuel C Park Jr. Professor of Economics Yale
University Presentation at the ITC-ICRIER
conference Fostering Trade Through
Private-Public Dialogue Shangrila Hotel, New
Delhi March 28, 2007
2

1. Introduction
2. Developing Countries in GATT/WTO and DOHA agenda
3. Non-Discriminatory Multilateral Versus
   Discriminatory Preferential and Regional Approach
   To Trade Liberalization
4. India in the GATT/WTO
5. Conclusions

3
1. Introduction

• LamyS address at the New Delhi Seminar on
  Saving Doha and delivering on development and at
  the Bangalore seminar multilateral trade
  Which way to go?
• Zedillos introduction to a volume of essays on
  poverty and trade
• Apparent divergence between the two
• Constraints on development mostly domestic
• Success in completing the DOHA agenda will help
  but not solve the complex and multidimensional
  problem of development

4
2. Developing Countries in GATT/WTO and the Doha
Agenda

• Of the original twenty three contracting parties
  of GATT eleven were developing countries (DgCs)
  including India Pakistan and Sri Lanka
• Some DgCs chose to stay out of GATT Negotiations
• Those who became contracting parties did not
  participate effectively in bargaining over the
  reduction in trade barriers took place until the
  Tokyo Round.
• Results of ineffective participation
• High tariffs against exports of DgCs in rich
  countries
• MFA an egregious violation of GATT
• agriculture out of GATT disciplines

to be continued .
5

• Tokyo round and its enabling clause which in fact
  hurt DgCs Baldwin describes DgCs as dont
  obey/dont object members because of the clause
• Uruguay round TRIPS, TRIMS,GATS
• Implementation Issues- Singapore Issues
• Failure of Seatle ministerial to launch another
  round
• Success at Doha Reasons for success Zoellicks
  remarks
• Doha development agenda and a set of deadlines
• Failure to meet the Doha deadlines and Cancun
  ministerial in 2003 followed by the adoption of
  July 2004 package with a new set of deadlines

to be continued .
6

• Failure again to meet the new deadlines Hong
  Kong ministerial of 2005 and yet another set of
  deadlines
• Lamy on the Doha Journey
• Are we back in full negotiation?
• US farm bill 2007 and EU reaction to it
• Lamy on development dimension of Doha

to be continued .
7

• Neither Lamy nor Zedillo embrace the extereme
  views of Stiglitz
• Trade and development
• Development constraints largely domestic as Lamy
  himself recognised
• Lamys list of domestic requirements Washington
  consensus
• Aid for trade is it realistic? Does it have a
  rationale?
• Coherence among global institutions

8
3. Non-Discriminatory Multilateral Versus
Discriminatory Preferential and Regional Approach
to trade Liberalization

• CUs and FTAs as an exception to MFN provisions of
  Article I of GATT
• Requirements for CUs and FTAs to be consistent
  with GATT defined in Article XXIV
• Failure of the working party mechanism of GATT
  and the CRTA mechanism of WTO to check
  consistency.
• Transparency Mechanism of 2006
• Lamy on reasons for the proliferation of RTAs not
  convincing

to be continued .
9

• The criteria of EU for choice of FTA partners
• US with its WTO-plus approach
• Lamy correctly rejects PTAs FTAs, and RTAS as
  substitutes for multilateral agreements
• Can a Pareto optimal customs union be designed?
• Yes, according to Kemp and Wan
• Can a country considering to enter an FTA with
  another achieve will achieve some of its
  objectives without an FTA?
• Yes, according to Evenett (2006)

to be continued .
10

• Can the spaghetti bowl of rules of origin, and
  procedures of cumulation be turned into becoming
  building blocks rather than being stumbling
  blocks as they are currently, towards global free
  trade
• Yes, according to Baldwin (2006)
• Potential Role of the WTO in defanging RTAs and
  turning them into building blocks
• In case of RTAs cannot be defanged, the best
  alteration is to repeal article XXIV of GATT/WTO
  and replace it with the requirement that all
  discriminatory and preferential features of PTA
  be exit ended on an MFN basis to all of the
  members of the WTO after five years of the PTA
  coming into force

11
4. India In the WTO/GATT

• Of the 23 original contracting parties of GATT
  were DgCs including India, Pakistan and Sri
  Lanka.
• India resisted Multilateral and reciprocal trade
  liberalization furthermore wanted DgCs to have
  complete freedom for choosing their trade polices
• Indias position dates back to the discussion of
  ITO charter at the Havana Conference
• India and Brazil as leaders of the group of
  twenty at Punta del Este ministerial meeting,
  resisted the launch of the

to be continued .
12

• Uruguay round with new items on the agenda until
  the last minute
• Both emerged once again, this time with China
  also as a member, of the G-20 group of DgCs at
  Cancun, to coordinate their negotiating positions
  on DOHA
• China has remained largely silent, while Brazil
  and India have been vocal
• In the increasingly unlikely event that EU, Japan
  and US reconcile their differences and offer a
  deal, whether Brazil and India will shift their
  positions sufficiently to reach an agreement
  remains to be seem Mr. Mukherjees and Mr. Kamal
  Naths disappointing remarks at the New Delhi
  seminar are not encouraging

to be continued .
13

• India like other member of the WTO is pursuing
  the FTA route
• SAPTA, SAFTA ineffectual
• Interests of India and DGCs better served by the
  multilateral process

14
5. Conclusions

• Doha at a critical stage
• The possibility of narrowing the widely divergent
  positions of WTO members particularly on
  agriculture, so as to reach an agreement by June
  2007 is remote
• An agreement with completion of Development
  Agenda also very unlikely, But a DOHA Light is
  possible and it would not be a disaster. It will
  save the WTO and give a chance to its members to
  cobble together a better future agreement
• Liberal global trading system is in the best
  interest of DgCs but it is not a solution for all
  development problems

to be continued .
15

• Problems of development lie in the domestic arena
• Trends towards PTAs will continue Efforts have
  to be made to defang them .

16
Thank You