Doha Round For All Intents And Purposes Is Dead

Following 10 days of intense negotiations, the major players in the Doha Round of trade
liberalization talks failed to reach agreements in key areas and gave up on July 29. The stalemate
means that further talks are off, certainly for the foreseeable future and maybe for good. US
textile manufacturers breathed a collective sign of relief because they were strongly opposed to a
tariff-cutting formula they say could have amounted to as much as 70 percent without assurance
there would be reciprocity in the form of lower overseas tariff reductions and greater market

The Doha Round, launched in November 2001, was aimed at promoting expanded world trade by
reducing agricultural and industrial tariffs, farm subsidies and non-tariff barriers to trade. In
the end, the breakdown came primarily over agriculture subsidies and safeguard mechanisms for
developing countries that would have permitted them to raise tariffs if confronted with import
surges or price declines. The United States pushed for a higher trigger level to limit use of the
trigger mechanism, but China and India wanted to make it easier to use the safety net.

The negotiators reportedly did reach agreement on 18 out of 20 of what they considered
essential elements, but things became bogged down over the remaining two. “It’s no use beating
around the bush,” said Pascal Lamy, head of the World Trade Organization (WTO), which sponsored the
negotiations. “This meeting has collapsed. Members have not been able to bridge their differences.”

Despite the breakdown, US Trade Representative Susan C. Schwab said the United States remains
“fully committed to the mission of the WTO as the foundation of the rules-based multilateral
trading system.” She said the WTO must continue to be the centerpiece in efforts to bring
developing countries increasingly into the global economy and help them benefit from opportunities
created by international trade.

While there may be a continuing dialogue, nothing substantive will get underway until after a
new administration takes over in Washington in January 2009.

August 5, 2008