Global Policy Forum

By Supachai Panitchpakdi

When the Doha round of trade talks began in November 2001, World Trade Organization members aimed to establish by March 31, 2003, a framework for negotiations to reduce trade barriers and subsidies in agriculture. The failure to meet this deadline is disappointing. But it need not be disastrous, provided governments move beyond this setback and apply the political will necessary to reach compromise.

There can be no overstating the importance of these negotiations, particularly for developing countries. Rich countries' agricultural subsidies and import barriers pose a significant obstacle to development and poverty alleviation in the developing world, where more than 97 percent of the people are engaged in agriculture. The World Bank estimates that scrapping trade-distorting subsidies and import barriers could lift annual rural income in the developing world by $60 billion - more than the total development aid given globally each year.

The "modalities," or framework, for future reform of trade in agriculture are vital to the negotiations because they spell out how governments should address key issues like tariff reductions, curbing of export competition distortions, special and differential treatment for developing countries and cutting domestic subsidies to farmers. Without agreement on the modalities, the talks cannot proceed in earnest.

Now that this deadline has been missed it is essential that negotiators keep cool heads and work together to prepare for our September ministerial conference in Cancun, Mexico.

The difficulties in agriculture should be put into a proper context. During the previous trade round, the Uruguay Round, more than three years were required before a draft text on modalities was accepted even as the basis for negotiations. In the Doha round such a text was produced in less than 18 months.

We would have a crisis if deadlines had been missed because governments had walked out on the process. But that is not the case. On the contrary, there are widespread indications that delegations are committed to carry on with their work in agriculture and other areas as well. It is essential that they do so.

It is just as crucial that governments pursue a strategy of positive linkages among the issues that comprise the Doha negotiations. Agriculture is by no means the only element of these talks. Issues like the liberalization of trade in services, the reduction of tariffs on manufactured products, rules for dealing with unfair trade practices and the relationship between trade and environmental protection are also important. Good progress has been made in these areas. This work must continue if the Doha round is to succeed and the global trading system is to remain vibrant.

The Doha negotiations constitute what is known as a single undertaking. All areas of the talks are linked and there is no agreement in any one segment of the negotiations until there is agreement in all of them. This facilitates tradeoffs, so governments that are reluctant to break down import barriers in one sector may be more agreeable if they are presented with opportunities for exporters in another sector.

In other words, by inching closer to agreement to pare back barriers to trade in telecommunications or banking services, for example, it may become easier to find solutions to the problems we face in agriculture.

The Cancun meeting, which marks the mid-point in negotiations scheduled to conclude by Jan. 1, 2005, was originally envisaged as an opportunity for ministers to assess progress and make decisions on whether to expand the negotiating agenda to take on new topics like investment, competition and some environmental matters.

I recognize that we have now made the agenda for the Cancun ministerial conference more complicated by missing the agriculture deadline and three other important deadlines over the past year. Nevertheless, ministers must prepare themselves for the difficult political decisions that will confront them.

We can afford to give negotiators a bit more time, but we cannot wait forever. Failure to reach agreement on the Doha negotiations by the 2005 deadline would raise fears that governments are incapable of taking the decisions needed to address the global economic slowdown and to help alleviate poverty in the developing world.

All of this would send a very bad signal to a very nervous world.

The writer is director-general of the WTO.

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