The Fate of Doha Development Agenda

Areas of Disagreement

Though the Doha Agenda cover a wide range of subjects, the critical and controversial areas are agriculture, non-agricultural market access and services. The success of Negotiations hinges on the satisfactory resolution of outstanding issues in these areas.

Agriculture

Trade in agriculture was brought under the purview of the WTO with signing of the Agreement on Agriculture, along with Agreement on establishing WTO, in December, 1994. The Member states gave tariff binding commitments and agreed to initiate negotiations to further liberalizing agricultural trade and removing trade barriers. These negotiations began in 2000 and later subsumed by Doha Round. The long term objectives of negotiations were to establish a fair and market-oriented trading system through fundamental reforms encompassing strengthened rules and specific commitments on ‘support’ and ’protection’ in order to correct and prevent restrictions and distortions in world agricultural markets. The main issues to be addressed included enlargement of the ‘market access’, elimination of ‘export subsidies’ and reduction in ‘domestic support measures’.

Negotiations on agriculture hit the rough road early. Disagreement surfaced as the USA, European Union and other developed countries showed reluctance to give specific commitments on export subsidies and domestic support measures. Efforts made at the Cancun Ministerial Meeting in 2003 to resolve the issues failed. The situation was salvaged temporarily at the July 2004 meeting of the General Council when the framework for negotiating modalities was agreed. The process went a step forward at the Hong Kong Ministerial Meeting in December 2005 which agreed on timeframe of April/July 2006 for finalization of modalities, and elimination of export subsidies by 2013. These deadlines also passed without any progress as both the sides, i.e., developed and developing countries ‘stuck to their guns’.   

Technical discussions however narrowed down the areas of disagreement on which specific commitments have to be made. The main hurdle is the level to which the domestic support measures have to be brought down. At the informal mini-ministerial meeting in July 2008, the USA conditionally offered to reduce its domestic support to agriculture to $ 15 billion a year from $18.2 billion in 2006; India, China and the European Union insisted on more liberal level. (In the meanwhile the US Congress had passed a five-year farm subsidy bill which may block extension of any meaningful commitment by US during this period). Disagreement also remained on the Special Safeguard Mechanism (SSM) under which developing countries making tariff bindings will be allowed to revive or re-impose tariffs if import of the product increases beyond a certain threshold level of imports – points of disagreements are (i) threshold level and (ii) the rate to which the tariff can be revived. The US insisted that the threshold should be high and the tariff level low; the other party was not willing to it. Another area on which agreement has to be threshed out is the special treatment (e.g., exclusion from commitment) of sensitive products of developing countries on the basis of food security, livelihood security and rural development.