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The Doha Development Agenda: the stakes are high for Turkey

 

Pascal LAMY (*)

When a child is born in the city of Inegöl, in the Sea of Marmara region in Turkey, the family only gives it a name seven days after its birth. On the seventh day, the parents and the relatives, at a big party, collectively decide on the name of the child. Then the eldest man of the family holds the baby in his lap, turns his face to the South, recites the Azan and whispers the name into the ear of the baby three times. Thus a name has been given to the child.

Giving a name to a round of trade negotiations is also a complex business. Like in Turkey, there is a collective decision, a celebration and quite a lot of movement and whispering in the World Trade Organisation (WTO) family. What trade negotiators have not yet learnt from the wise people of the Marmara Sea is to wait some time before they agreed on a name. The current round of trade negotiations – the Doha Development Agenda, or DDA in our jargon bears the name of the city of Doha, the capital of Qatar, where the round was launched in a WTO Ministerial in 2001. It also has the word "Development" in it – meaning that this round should be aimed at making the rules of world trade more development-friendly.

The decision by WTO Members in 2001 to designate the Doha Round a development Round was a recognition that there remain imbalances in the trading system that need to be corrected, with an eye firmly fixed on development needs. The intention, therefore, was – and still is – to try to improve the multilateral disciplines and the commitments by all Members of the WTO in such a way that they provide developing countries with conditions to reap the benefits of opening trade. But the road is difficult and we have been through ups and downs.

In 2001, in Doha, the Members of the WTO celebrated joyful moments when they launched a new Round of negotiations. In 2003, WTO Members experienced difficult moments at Cancun, Mexico, when many feared that the multilateral trading system had lost its sense of direction. In July 2004, after many sleepless nights, Members agreed on the July Framework

– a set of principles to guide the remainder of the negotiations. In December 2005, a ray of hope again appeared, with the progress made at the WTO Ministerial Conference which took place in Hong Kong, China. In July 2006, Members had to face up to the "suspension" of the negotiations; again the negotiations were thrown to the bottom of the valley. In January 2007, after a few months of quiet diplomacy, and faced with the fearful possibility of a dangerous failure, WTO Members decided to resume formally the negotiations. Since February 2007, the negotiations have restarted in full mode in all negotiating areas. Members are also working bilaterally, touching base and checking the impact of possible compromise numbers on products of their major export interests and main import sensitivities. There is also renewed engagement and support at the highest political level. What is really at stake highlights the crucial importance of the DDA.

The prospect of a failure of the negotiations, brandished rhetorically before July, is now seen by many Members as a serious possibility, and the consequences of such a failure are now emerging more clearly – not as a major economic shock that would precipitate any particular market crisis, or a breakdown in trade or in the operating environment in the short-term, but rather as a slowly developing disease that would progressively sap the strength of the multilateral trading system built up over the past 50 years, damaging its economic lungs, its political heart, and its systemic bone structure.

In terms of market access or new disciplines, what is already on the table is worth two to three times the Uruguay Round which preceded the Doha Round. Negotiations have been difficult precisely because of the high level of ambition established at the outset. And this applies equally to the conventional North-South dimension as well as to the newer South-South dimension. Suffice it to recall that in the space of ten years, the proportion of developing countries in world trade has gone from one third to half the total.

There could be damage to the political heart as conceived in 2001, when priority was given to development and to the correction of imbalances that persisted in the international trading order. It is now an acknowledged fact that, should the negotiations fail, the main victims of the WTO's inability to correct the inequalities that the Uruguay Round had begun to narrow in the agricultural or textiles and clothing areas, would be the weakest and the poorest. In other words, the developing countries, and in particular the least developed countries, for whom a successful outcome represents a hope of dealing with the adverse effects of agricultural subsidies on cotton or sugar, or of gaining unhampered access to the markets of the rich countries. In other words, the DDA would not contribute to the Millennium Objectives as adopted by the UN! Failure would also mean a weakening of the systemic bone structure, which holds together the multilateral trading system that acts as an insurance policy against protectionist tendencies. Like any insurance policy, it has to be updated from time-to-time and its value is only evident when the accident takes place. Sometimes, it is too late. As for the bilateral insurance policies, however fashionable they appear to be, we know that they are of lesser value. They do not cover all trade, and they are worth nothing when it comes to disciplines on agricultural subsidies, fishery subsidies, or anti-dumping that are of considerable interest to the developing countries.

To take a few examples in the area of agriculture, the DDA would provide two to three times greater reductions on tariffs and subsidies than the Uruguay Round; export subsidies would be totally eliminated by 2013; there would be duty-free and quota-free treatment for the world’s poorest countries’ exports; and more ambitious treatment for cotton. In the area of tariffs on industrial products, higher tariffs would be subject to higher cuts. Moreover a DDA deal would address non-tariff barriers and would also offer duty-free and quota-free treatment for the world’s poorest countries’ exports. The negotiation also covers rules on trade facilitation that would improve efficiency of transactions by further expediting the movement, release and clearance of goods. In services, Members have already agreed to deeper opening of sectors such as financial services, telecommunications, environmental services and a broad range of business services. In the area of rules, the DDA would reform anti-dumping procedures to enhance transparency and predictability; rules would also limit subsidies on fisheries in addition to the mechanism already agreed to enhance the transparency of regional trade agreements.

In all these sectors, Turkey has a strong interest in ensuring a rapid and positive conclusion of the DDA. For example on industrial tariffs through the reduction formula in this Round, WTO Members can, for the first time, address the tariff peaks, high tariffs and tariff escalation particularly for access to rich markets but also to the major developing markets. Turkey is a very strong player in these industrial tariff negotiations as it is in its interest to ensure its trading partners reduce their import tariffs to a level equivalent to its own average applied tariff rate which is fairly low at 5.4%. If the negotiations fail this unique opportunity will be missed.

In the trade facilitation negotiations, Turkey has been a very active player and has tabled various proposals relating to publication and availability of information, including internet publication; advance rulings; and formalities connected with the importation and exportation of goods. These include automation, single-window, pre-arrival clearance, expedited procedures for express shipments and risk management and analysis. Turkey has also been quite active in the services negotiations. It seeks improved market access in a number of sectors, including construction and related engineering services, where its industries have flourished in markets in South Asia, North Africa, the Middle East or the Balkans. Turkey's active participation in the WTO generally and in the DDA in particular reflects the firm conviction that trade opening can help the Turkish people, provided that the adequate adjustment mechanisms are in place to ensure a smooth economic transition. Indeed, given the high proportion of trade to Turkey's GDP and the openness of the Turkish economy, an ambitious Doha Round would be in Turkey's best interests.

What have I learned from the past 5 years, from the ups and downs, from those joyous moments and bitter hours?

First, I have found that there has always been an underlying force that helps us get out of the most difficult situations and gives us hope at times of despair. It is our belief that a strong WTO reflects the widespread desire to operate in a fairer and more open multilateral trading system which provides a stable anchor to our economies as they become more intertwined. It is the acknowledgement that this system has contributed significantly to economic growth, development and employment throughout the past 50 years. It is the belief that international trade can play a major role in growth and poverty alleviation and all our people can benefit from the increased opportunities and welfare gains that the multilateral trading system generates.

Secondly, it is important to realize that the negotiation process has moved forward, bit by bit, layer by layer, to its present stage when negotiators showed understanding for each others' concerns, when negotiators not only thought about their own national interests, but also kept the value and good of the system in mind and made joint efforts towards compromise solutions. When all countries were ready to make their contribution, with richer countries making a bigger contribution than poorer countries. We witnessed this kind of cooperative atmosphere in the final stages at the Doha Ministerial, in Geneva in 2004 and in Hong Kong in 2005. I hope to see this happen again in the coming months, in order to open the way towards the conclusion of the Round. I count on Turkey to help move the DDA ship towards a safe harbour soon.

(*) Director-General of the World Trade Organisation