The World Trade Organization (WTO) does its best to improve the international trading system in order to benefit its members. To reach this purpose, it has developed negotiations aimed at the reduction of trade barriers and revision of associated rules. This program is currently known as the Doha Round, and it deals with approximately a couple dozen of trade areas. The trade-negotiation round was launched at the beginning of the 20th century and took place in Doha, Qatar, which affected its name. It was developed during the WTO’s Fourth Ministerial Conference. The program focused on the issues of agriculture, services, and intellectual property.
The members of WTO wanted to develop a trade agreement that would be accomplished in four years (by 2005); however, one more year was needed because the USA and the EU did not want to alter their agricultural subsidies making them less costly (Lee, 2016). The Round was an ambitious program because it included participants from almost the whole world. Negotiations presupposed the possibility to resolve all issues by consensus instead of following the idea of the majority, which appealed to WTO members. Agreements had to be accepted by all participants; otherwise, they were not considered. It was expected that those decisions that can enhance economic growth would be developed due to the Round. The reduction of subsidies would make it possible for developing countries to export those products they produced. Developed countries, in turn, would simplify access to their services, such as banking. As a result, both parties were expected to benefit because the size of markets would increase, and they would modernize.
The Doha Round included talks on the following topics:
- Agriculture. Reduce subsidies and tariffs on imports and eliminate them from exports of food.
- Non-agricultural market access. Minimize tariffs on imports of various products except for food.
- Services. Develop clear rules regarding the provision of services for other countries. Provide countries with an opportunity to identify if they permit foreign ownership and what kind of services they are willing to obtain from foreigners.
- Rules. Create clear anti-dumping rules, forbid launching subsidies. Pay attention to vessels, aircraft, cotton, and fishery.
- Intellectual property. Focus on wine and liquor producers. Create an appropriate register. Protect product names.
- Trade and environment. Ensure the safety of natural resources in developing countries.
- Trade facilitation. Identify and enhance custom fees, documentation, and regulations. Cope with bureaucracy and corruption.
- Special and differential treatment. Provide assistance to developing countries for them to improve infrastructure and meet those standards that developed countries have. Consider the necessity of financial aid and special treatment.
- Dispute statement. Recommendations should be developed to manage associated issues.
- E-commerce. Internet products and services should not be affected by any taxes.
The success of the Doha Round would have enhanced the economy of developing countries and minimize spending on subsidies in developed ones. As a result, the adverse outcomes of the financial crisis could have been lessened. However, the US and EU legislatures did not manage to deal with the political pressures and led to the closure of the Doha Round (Ismail, 2009). Nevertheless, the number of bilateral agreements that are not difficult to negotiate increased, which might be advantageous for developing countries.
Unfortunately, the failure of the Round presupposes that other international trade agreements of the same type are not likely to be successful. The USA and EU will not allow developing countries to offer their low-cost products because of the possibility to reduce their market share. At the same time, developing nations will be afraid to face those issues that affected Mexico because of NAFTA. Thus, the design of future trade agreements like those discussed in the framework of the Doha Round can be questioned (Rena, 2012). This fact can be supported by the observed outcomes of the Transatlantic Trade and Investment Partnership that was not supported by the US president.
The USA and EU do not want to negotiate regarding the reduction of trade subsidies and taxes because the price of their food products differs. The counties are afraid that governments will stop protecting their offerings. Much attention is also paid to the fact that the EU bans the use of modified and treated hormone products while the USA relies on them as they provide an opportunity to keep prices low. A similar situation was observed with the Trans-Pacific Partnership, as the USA was withdrawn from it because of the unwillingness to reduce trade barriers.
Thus, it can be stated that the Doha Round did not end up with success because of the USA and EU’s decision to keep their agricultural subsidies. However, there some other reasons that led to this outcome as well. For instance, China, India, and Brazil that participated in the negotiations, failed to take the leadership role in them and did not provide enough support. In addition to that, the USA, Japan, and China need to consider their influence on other countries. In particular, their willingness to make their currency the leading one tends to cause inflation in developing nations. In this way, it is vital for them to focus on their responsibility for the financial situation in countries. It would also be advantageous if Doha makes its export regulations friendlier to the needs and requirements of other countries for them to accept alterations.
References
Ismail, F. (2009). An assessment of the WTO Doha Round July-December 2008 collapse. World Trade Review, 8(4), 579-605.
Lee, Y. (2016). The long and winding road: Path towards facilitation of development in the WTO: Reflections on the Doha Round and beyond. Law and Development Review, 9(2), 437-465.
Rena, R. (2012). Impact of WTO policies on developing countries: Issues and perspectives. Transnational Corporations Review, 4(3), 77-88.