Doha Round of WTO: Optimism on trade talks by weaving in flexibility
Remy Rowhani, director general Qatar Chamber of Commerce and Industry (QCCI), spoke exclusively to The EDGE about what to expect from the forthcoming eighth World Chambers Congress that is set to take place in April, given the deadlock that has plagued the Doha Round of talks for 11 years.
If the Doha Round talks become a success, it could increase the global trade by US$130 billion (QR473.2 billion) annually. How is the figure geographically spread?
Actually, the figure of US$130 billion (QR473.2 billion) annual increase only applies to the trade facilitation component of the much larger Doha Round. Indeed, this annual increase would occur just by completing a standalone trade facilitation agreement, something the G20 Leaders recognised at their meeting in Los Cabos in June 2012. Further agreement on additional areas under negotiation would lead to even bigger increases of global trade volumes.
Geographically, the majority of gains would go to the developing countries, thus honouring the development aspect of the Doha Round. According to latest report prepared by the Peterson Institute for International Economics, entitled Payoff from the World Trade Agenda 2013, empirical studies show a parallel correlation between improvements in trade facilitation and increased trade volumes. According to the report’s conservative calculations, significant improvements in trade facilitation could increase exports of developing countries by approximately $570 billion (QR2.07 trillion) and exports of developed countries by $475 billion (QR1.7 trillion). Taken together, this would translate into more than $1 trillion (QR3.64 trillion) world export gains.
What policy changes do you advocate at a global level?
With rules that were mostly formulated in the mid-20th century, the rules governing trade negotiation are neither adapted to adequately address the trading realities of today, nor address emerging issues such as the interplay of trade and climate change, trade and currency exchange rates, etcetera. These are some of the changes that I would want to see in reality.
Lowering trade barriers is one of the agendas of the Doha Round. Where do the negotiations currently stand on this specific issue?
After 11 years of negotiations, the World Trade Organization (WTO) talks on lowering trade barriers – along with other issues – are still stalled. Progress was reached in the WTO’s Uruguay Round, with countries committing to cut tariffs and maintain their customs duty rates at levels that are difficult to raise. Negotiations under the Doha Round have set out to take this further, intensifying efforts to bind tariffs in both agriculture and non-agricultural market access. With a trade facilitation agreement, the cost of doing business would be reduced from 10 percent to five percent of a product’s overall cost.
What is your take on the single undertaking system that countries have?
One of the causes behind the deadlock in the Doha Round is the use of negotiating approaches developed in the last century, which are not always adapted to the 21st century realities of trade and multilateral negotiations. With the single undertaking approach, everything on the negotiating table has to be agreed by everyone or nothing is agreed. The WTO and G20 leaders have now been calling for new approaches. The International Chamber of Commerce (ICC) and QCCI answered this call by launching the ICC Business World Trade Agenda initiative in 2012 at the WTO in Geneva. Through this initiative, the ICC is proposing that governments and business work more closely together to get beyond the Doha Round stalemate to define a more flexible approach that will make it possible to achieve results that will help pull the global economy out of the current crisis.
Public-private partnership (PPP) is touted as one of the mantras for success of trade talks. What is your view on this? What specific measures in the realm of PPP does the Chamber advocate?
Here we need to distinguish trade talks from Aid for Trade, which are two separate issues. PPPs are not connected to the success of trade negotiations; the success of trade negotiations is contingent upon the political will of member countries of the WTO to agree on a balanced set of issues, that could form the basis of an agreement by the ninth WTO Ministerial Conference to take place from December 3 to 6, 2013 in Bali, Indonesia.
Rather, PPPs would be useful in facilitating the implementation of trade facilitation measures for Least Developed Countries through the WTO’s Aid for Trade, specifically those PPPs for infrastructure.
Tell us about the agenda of the forthcoming World Trade Agenda (WTA) meeting in Qatar?
Qatar Chamber is hosting the ICC World Business Trade Agenda Summit, to be held on the first day of the ICC World Chambers Federation eighth World Chambers Congress on April 22, 2013. We are mobilising ICC’s international business network to define a practical and forward-looking trade policy agenda that will contribute to economic growth and job creation, moving global trade beyond Doha. The ICC Business World Trade Agenda initiative seeks the input of small, medium and large enterprises that produce the goods and services traded daily throughout the world. We are developing and refining a set of business recommendations in consultation with global business in the lead up to the summit in Qatar in April. The final business priorities will be submitted to governments ahead of the next G20 summit in Russia in September 2013 and the WTO ministerial conference in Bali.
How serious, in your view, is the world community in engaging in the Doha Round?
Many are discouraged, but the business community strongly believes that many agreements can still be harvested from the Doha Round. We feel that this is particularly urgent as a means for helping to pull the global economy out of the current crisis.
A WTO agreement on trade facilitation is expected to deliver gains of at least US$130 billion (QR473.2 billion) annually, with most of the gains benefitting developing countries. Up until now, there has not been such a significant initiative from the private sector. We strongly believe that our Business World Trade Agenda initiative will help forward negotiations in time for the WTO ministerial talks in Bali.
With a stalemate of 11 years, what, in your view, needs to be prioritised so that the trade agenda can be taken forward?
As part of the Business World Trade Agenda priorities, we are calling on governments to: conclude a standalone trade facilitation agreement; advance the multilateral
process under the WTO framework; liberalise trade in services; lower barriers to trade in information technology products and services, and work towards a multilateral framework on international investment. These are effective elements of the Doha Round that, with further commitment, could be rapidly put into effect, building an effective rules-based multilateral trading system for the 21st century.