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WORLD ECONOMIC FORUM: Starring Role for the Doha Round

Gustavo Capdevila

DAVOS, Switzerland, Jan 29 2005 (IPS) - The World Economic Forum’s 2005 meeting will be remembered more for having served as the scenario for the reinvigoration of the Doha Round of trade talks than for the statesmen and celebrities who visited this Swiss mountain resort this week.

The presence of the trade ministers of 24 countries went virtually unnoticed at a gathering whose guest list included presidents Luiz Inácio Lula da Silva of Brazil and Jacques Chirac of France, British Prime Minister Tony Blair and German Chancellor Gerhard Schroeder.

But in the Arabella Sheraton hotel, where U.S. actress Sharon Stone made a big splash on Saturday and Israeli Deputy Prime Minister Shimon Peres and Palestinian authorities held talks that will be crucial to the Middle East peace process, the ministers gave a boost to the lagging Doha Round of multilateral talks.

The agreement reached by the ministers in their meeting on the sidelines of the World Economic Forum paves the way for the sixth World Trade Organisation (WTO) ministerial conference slated for next December in Hong Kong, where the decisive phase of the multilateral trade negotiations is to begin.

Since it was launched at the fourth WTO ministerial conference in the capital of Qatar in December 2001, progress in the Doha Round has been held up, mainly by conflicts between rich and poor countries over the sensitive issue of agriculture.

On Jul. 31, the 148 WTO member states finally reached a framework agreement for setting the “modalities” of the trade talks.

But since then, the negotiations had virtually come to a halt, and the few talks that have taken place have been limited to technical aspects.

However, the informal ministerial meeting held Saturday in Davos gave a “political kick-start” to the process, said Indian Commerce Minister Kamal Nath, who told IPS that it was “a positive meeting” that sent out “positive signals.”

Before this, there was a “feeling that the momentum had been lost,” but “at a ministerial level…the right signals” have been given to the negotiators in Geneva in order for them to move forward, said Nath.

Other prominent participants in the Davos Forum agreed that Saturday’s meeting was a success. WTO Director-General Supachai Panitchpakdi said he was “very happy” because it was a “very good meeting.”

Brazilian Foreign Minister Celso Amorim, who coordinates the G20 bloc of developing nations pushing for the elimination of agricultural subsidies, also described Saturday’s meeting as “very positive” and “constructive”.

Amorim formed part of the retinue accompanying President Lula, who reiterated his call for a war on global hunger and underlined Brazil’s transformation into a major exporter.

According to the agreements reached by the ministers in Doha, prior to the Hong Kong conference the negotiators are to concentrate on coming up with solutions in five key areas: agriculture, market access for industrial goods, services, special and differential treatment of developing nations, and trade rules.

The question of trade rules includes trade facilitation – a new negotiation introduced last July that focuses on the removal of custom barriers.

The ministers agreed in Doha that the modalities for the negotiation of each issue are to be set by the time the Hong Kong meeting opens.

The modalities are the formulas for the concessions that will be made by each nation after the round of multilateral talks is completed.

Swiss Economy Minister Joseph Deiss, who hosted the ministerial meeting in Davos, said the ministers must go to Hong Kong with “concrete progress” on modalities in agriculture and industrial goods, as well as a “critical mass” of progress on services and trade facilitation.

The draft agreements should also include a “proper reflection of the development dimension” – a reference to the assymetries between nations that put developing countries at a disadvantage.

The key issues in the run-up to Hong Kong will be discussed in a new ministerial meeting to take place in Kenya in early March.

The ministers also stated that the draft texts of the agreements – the “approximation of the kind of modalities we will like to see”, in Supachai’s words – should be ready by August.

If there is no outline of the modalities by then, it will be very difficult to reach an agreement next December, said Alfredo Chiaradía, Argentina’s secretary of foreign trade.

Deiss said the negotiators must reduce their differences and that only a few major political questions should be left pending by the time the ministers meet in Hong Kong.