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Bilateral trade deals, Doha in the spotlight at Davos

Bridges Weekly Trade News Digest • 1st February 2012

Bilateral trade deals, Doha in the spotlight at Davos

The annual meeting of the World Economic Forum, held in the Swiss ski resort of Davos, came to a close on Saturday 28 January, with many policymakers making a push for bilateral and regional trade pacts - including an EU-US agreement - in the absence of progress in the Doha Round. WTO members are also set to explore other negotiating approaches this year, in the hopes of eventually moving the ten-year trade talks forward.

Trade ministers meet on sidelines

Ministers from about 20 WTO members, hosted by Swiss economy minister Johann Schneider-Ammann, gathered on Saturday to discuss priorities for the global trade body in 2012.

These meetings have become a regular feature of Davos summits, serving as an opportunity for trade ministers to gather informally and assess the progress of the Doha Round of trade talks, and make plans for the negotiations’ next steps. Last year’s Davos forum saw trade ministers make a concerted push for finishing the Doha talks in 2011 - a goal that, like previous breakthrough efforts in 2006 and 2008, failed to bear fruit.

Going into Saturday’s meeting, few expected anything to have changed in the weeks since December’s WTO Ministerial Conference, where the Doha Round was declared at an impasse and members were urged to explore new negotiating approaches.

“It’s after Davos, perhaps, that things will move in a more significant way to establish some sort of work on some sort of process in the WTO,” one developing country official predicted prior to the informal gathering.

After Saturday’s discussion, US Trade Representative (USTR) Ron Kirk told reporters that there “wasn’t any backtracking from the decision that we reached at our ministerial in Geneva, that we really do need to turn the page and explore new ways of moving forward.”

South African trade minister Rob Davies added that “the idea that we’re going to make some massive breakthrough in a major [Doha] deal is remote, but we can work on some issues and those issues are worth working on.”

Doha: Political energy in ‘short supply’, says Lamy

Despite the impasse in the negotiations, “Doha is not dead,” Australian Trade Minister Craig Emerson told the audience at a panel discussion on the last day of the summit. Though the talks are “alive and unwell,” he continued, “I think there’s enough life in the Doha Round to persist with it,” so long as new approaches are pursued.

One option, Emerson stressed, would be to break the negotiations up into “more manageable parts” as a way to “build confidence” in the Round’s ability to deliver results.

Along similar lines, WTO Director-General Pascal Lamy commented that “you need a lot of political energy to do things multilaterally, and it’s just not available.”

“It’s in short supply, just as it is in climate change and currency arrangements,” Lamy told the audience.

In spite of this, the trade chief continued, “I’m quite convinced after having heard everybody - including ministers today [at the informal side meeting] - that if we leave aside the big battle, the big prize for the moment…there are areas where progress, in a multilateral context, can take place, and this is what we have to test in the coming months.”

However, he cautioned, “please do not expect trumpets and drums in the present macroeconomic circumstances.”

Cameron: “Let’s get some bilateral deals done”

In the absence of movement on the Doha talks, many participants at the high-level forum urged countries to continue pursuing bilateral deals in the meantime.

British Prime Minister David Cameron, in his speech at this year’s event, made a particularly strong push for countries to look beyond the WTO negotiations, which in his view seemed to show little hope - a year after insisting that concluding the talks was “a matter of urgency” and having called on countries to put more on the table to do so.

“Last year, at this very forum, world leaders called for an all out effort to conclude the Doha Round in 2011,” Cameron told the audience at this year’s forum. “We said it was the make or break year. It was. And we have to be frank about it. It didn’t work.”

While pushing for countries to pursue bilateral options, Cameron stressed that the importance of the WTO not be forgotten. “Far from turning our back on multilateralism, we need the continued work of the WTO to prevent any collapse back to protectionism, to ensure we take account of the interests of the poorest countries, and to ensure the WTO framework is fit for 21st century trade,” he said.

He added that this would mean moving forward, “perhaps with a coalition of the willing, so countries who want to…can forge ahead with more ambitious deals of their own, consistent with the WTO framework.”

EU-US deal urged by Cameron, Merkel

Along with urging the EU to finalise negotiations for free trade pacts with Canada, India, and Singapore by the year’s end, Cameron also referred to the possibility of an EU-US agreement.

Talks on possibly launching negotiations for an EU-US deal have been in works since November, when leaders from both sides agreed to explore options for increased co-operation between the two trading partners (see Bridges Weekly, 30 November 2011).

The possibility of a Brussels-Washington pact was also referred to by German Chancellor Angel Merkel and USTR Kirk, both of whom made arguments for countries to pursue bilateral deals during the lull in multilateral negotiations.

ICTSD reporting; “Ministers cautiously optimistic about future trade deals despite Doha deadlock,” ASSOCIATED PRESS, 28 January 2012.

 source: ICTSD