Claims of a breakthrough at India (WTO) Ministerial do not bear out

Claims of a breakthrough in the Doha round of global trade talks following last week’s ministerial in India appear to follow a familiar pattern for such meetings: namely, that such claims are a bit premature when you examine the details of what actually happened.

While the Indian government in the press hailed the meeting as having produced a breakthrough, the meeting in fact produced little more than a commitment to have senior officials meet starting next week to develop detailed work plans for Doha round negotiations in the coming months.

But there are no real signs that those work plans — if they can be devised by senior officials in coming weeks — will lead to new concessions. To more pessimistic observers, the only conclusion that emerged from the ministerial meeting is that the Doha round talks remain completely stuck.

One developing country source said that while ministers in New Delhi reiterated their commitment to conclude the Doha round deal by 2010, there is no sign at this point that this is even a remote possibility. He said if the U.S. were serious about that date, it would push for a quick conclusion of the modalities for agriculture and non-agricultural market access (NAMA) and focus on the other negotiating areas that are lagging.

So far, there is little indication that the U.S. will change its approach, at least in the near term, of insisting that bilateral negotiations with key trading partners such as China, India and Brazil must clarify what concessions are on the table in order to sell the deal domestically in the United States.

“What I would say to you is we believe that [bilateral talks] is the best for nations to move beyond public posturing into the real hardline negotiations that are necessary in order to bring Doha to a conclusion,” U.S. Trade Representative Ron Kirk said in a Sept. 4 press conference, according to a transcript of his remarks.

This despite an implicit acknowledgment from Kirk during that same press conference that key trading partners have shown little receptivity to the idea of bilateral talks thus far.

The U.S. approach to the Doha round and other trade initiatives is unlikely to change in the near future with the Obama administration focused on domestic priorities, particularly health care. The placement of trade on the back burner is not a change from previous administrations facing pressing national or international issues.

In addition, there are logistic issues that make U.S. involvement harder, such as the absence of a chief U.S. agriculture negotiator and no Deputy USTR in charge of the World Trade Organization.

Based on the preparatory work done so far for the G20 meeting in Pittsburgh, trade is unlikely to play a major role in the deliberations of world leaders either. Instead, they are likely to be focused on developing a framework for a global economy based on sustainable, balanced growth that will not depend solely on export-led growth.

In terms of trade, leaders are likely to reiterate their stance that they oppose trade restrictions and press for continuing trade liberalization, including through the Doha round talks, sources said.

If President Obama gives any speech on trade in advance of that meeting, sources speculated that it would likely highlight the importance of trade for economic growth in general terms. This would be a far cry from the long-awaited trade policy framework speech that would lay out an agenda for how to proceed on pending trade initiatives.

But so far there is no clear time line on a presidential trade speech and administration officials last week worked hard to squash any suggestion that Kirk in his press conference had signaled that the speech may be forthcoming before the G20 meeting.

At the India ministerial, Kirk signaled the U.S. is not ruling out additional concessions. In response to a question if the U.S. is willing to make further cuts on its farm subsidies, Kirk said that “whatever concessions” the U.S. might make in the Doha round talks “will be made in those sustained bilateral talks.”

But developing countries like Brazil, India and China are reluctant to engage with the U.S. in a bilateral context because the Doha round talks are stalled and they consider it foolish to offer any concessions at this point. In addition, one source said the U.S. has not signaled an actual readiness to offer any further concessions in bilateral talks that have occurred thus far.

China and Brazilian ministers both warned Kirk in New Delhi that the U.S. cannot look to greatly change the deal that is currently on the table. That deal, as embodied by draft modalities texts in agriculture and NAMA released in December 2008, has still not been accepted by the U.S. as the basis for future talks.

Brazil warned in New Delhi that the outlines of a deal can be “marginally adjusted” but not “significantly changed,” sources said. Similarly, the Chinese minister warned that attempts to go beyond the ambition contained in the revised texts could delay the talks for years, one source said.

Geneva sources also criticize the U.S. for not making more precise demands in the bilateral talks that have taken place thus far. For instance, one source said the U.S. pressed Brazil in a July bilateral meeting to refrain from using flexibilities to exempt a vast range of industrial goods from formula tariff cuts, without even committing that the list presented is exhaustive, and also pressed Brazil to participate in key tariff-cutting sectorals, such as the chemicals sectoral.

In addition, the U.S. also met with India last July but offered no real clarity on what it wants, other than stressing the need to participate in sectoral tariff-cutting initiatives and demanding that India offer more clarity on how it plans to use the flexibilities to exempt products from formula cuts, another source said.