Doha

What is the Doha round of trade talks?

Doha is the latest round of international trade talks led by the World Trade Organization. The name comes from the city where the WTO met in 2001 for its ninth round of talks and set its latest goals to open world markets. Since the start of the talks the WTO has met in Doha, Cancun, Geneva, Paris, and Hong Kong.

A brief WTO Timeline

1947 - 23 nations sign on to the General Agreement on Tariffs and Trade (Gatt), a framework to encourage free trade.

1995 - The eighth round of GATT talks, in Uruguay, concludes and establishes the World Trade Organization (WTO).

2001 - WTO meets in Doha, Qatar and creates the Doha Development Agenda. This is the ninth round of trade talks and is intended to open world markets to agricultural, manufactured goods, and services.

2003 - World trade talks in Cancun, Mexico collapse due to disagreement over farm subsidies and access to markets between rich and poor nations. Rich countries drop plans to include investment and competition policy in the talks.

2004 - Geneva talks make a framework agreement on opening up global trade. US and EU plan to reduce agricultural subsidies, while developing nations plan to cut tariffs on manufactured goods.

2005 - World trade talks start again in Hong Kong.

2006 - Emergency talks among the G6 (US, Japan, EU, Brazil, India, and Australia) collapse in Geneva.

2007 - US "fast track" authority runs out - on June 30. Under "fast track" Congress can't alter any trade deals negotiated by the president - it can only give trade deals a "yes" or "no" vote. Because fast track is seen as necessary for the US to approve a Doha deal and Congress may not vote to extend fast track authority, its expiration date is seen as a deadline for the Doha talks to succeed.

(BBC)

For a brief balanced background on the WTO and Doha talks check the Economist.

Free Markets and Level Playing Fields

The goal of the Doha talks - and pretty much all free trade talks - is to chip away at barriers to free trade and to do so in a way that's "fair" to all nations involved. ("Fair," of course, is loaded word; in the Doha round there's a big moral component with a lot of talk about rich nations' responsibilities to help out poor nations; at the same time each nation has its own idea of what's a fair deal for itself and won't sign on to a deal that gets it the short end of the stick.)

A note on barriers: To get a handle on what all the Doha haggling is about, it's useful to clarify the two kinds of trade barriers that are being discussed. Tariffs are taxes on imports; they hike up the prices of imports and so give homemade goods an advantage at the market place. Subsidies are government handouts (in the form of cash or tax incentives) for home industries - and so act like tariffs in reverse: they give home industries an advantage in competing against foreign companies at home and abroad.

Welfare Steaks

A primary focus of the Doha talks are farm subsidies - particularly in rich nations. Supporters of free trade argue that farm tariffs and subsidies in rich countries hit poor nations unfairly because agriculture is a much larger part of the economies of poor nations.

Agriculture as Percent of GDP

Country

Percentage

US

1

UK

1.5

EU

2.2

France

2.5

Brazil

10

Malawi

35.9

Somalia

6

(Congressional Budget Office)

Agricultural Export Subsidies:*

(Millions of US dollars)

Country

1998

2001

EU

5,977

2,305

US

147

55

Poland

14

22

S. Africa

3

0

Australia

1

0

Brazil

0

0

Bulgaria

0

0

Indonesia

0

---

Canada

0

---

*Countries that have a subsidy reduction commitment.

(Congressional Budget Office)

Although tariffs are stacked the other way - with richer nations having lower ag tariffs - poor nations still argue that, since agriculture is a larger part of their economies, it's fair for them to have higher tariffs.

Simple Tariff Rates for Agriculture and Manufacturing:

(Percent)

Country

Agriculture

Manufacturing

EU ('99)

19

4.2

US ('01)

9.5

4.6

Large Middle Income (a)

26.6

13.1

Lower-Income Countries (b)

16.6

13

a: Brazil ('01), China ('01), India ('00), Korea ('01), Mexico ('01), Russia ('01), South Africa ('01), Turkey ('01)

b: Bangladesh ('99), Guatemala ('99), Indonesia ('99), Kenya ('01), Malawi ('00), Togo ('01), Uganda ('01), Zimbabwe ('01)

Pocket Change

Governments in rich countries can afford to help out industries at home. And often they do. As with agriculture, free-traders argue that generous subsidies upset the global free-trade network and put poor countries at a disadvantage. Tariffs on manufactured goods show a similar imbalance as with agricultural tariffs.

Total Domestic Support Reported by Countries to the World Trade Organization:
(Millions of current U.S. dollars)

Country

1998

2001

EU

97,143

75,708

US

64,973

72,130

Brazil

3,285

2,769

S. Africa

607

351

Indonesia

131

---

Malawi

27

---

Guatemala

8

12

Uganda

0

---

El Salvador

0

0

(Congressional Budget Office)

Simple Tariff Rates for Agriculture and Manufacturing:

(Percent)

Country

Agriculture

Manufacturing

EU ('99)

19

4.2

US ('01)

9.5

4.6

Large Middle Income (a)

26.6

13.1

Lower-Income Countries (b)

16.6

13

a: Brazil ('01), China ('01), India ('00), Korea ('01), Mexico ('01), Russia ('01), South Africa ('01), Turkey ('01)

b: Bangladesh ('99), Guatemala ('99), Indonesia ('99), Kenya ('01), Malawi ('00), Togo ('01), Uganda ('01), Zimbabwe ('01)

(Congressional Budget Office)

Where the talks are now:

In July 2006 an emergency meeting of the six core nations in the Doha negotiations collapsed. Talks were revived again in 2007 only to hit a new wall in July 2008. With the world in an economically gloomy and protectionist mood, it's doubtful talks will make progress soon. (WP)

Where the facts are from:

CNN - mainstream news media
BBC - mainstream news media
The Economist - mainstream news media

For more information on the Doha round:

A Washington Post article summarizes the current situation.
Information on the G8 and G20 groups of nations.
The World Trade Organization home page, and statistics on all member nations.

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