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TRADE: Will Obama Steer New Course in Delhi and Pittsburgh?

Eli Clifton

WASHINGTON, Sep 3 2009 (IPS) - A “mini-ministerial” meeting has been convened by the World Trade Organisation (WTO) in Delhi to help member countries draft a roadmap to conclude the troubled Doha round and set the stage for the G20 later this month and the WTO ministerial in Geneva in November.

The mini-ministerial session in Delhi – occurring Sep. 3 and 4 – and the upcoming G20 summit in Pittsburgh present a dual challenge for the Barack Obama administration

The White House must present a trade agenda that will help conclude the gruelling Doha round of trade negotiations, which have gone for eight years, while devising concrete trade agreements and policies to assist in the recovery from the global financial crisis and appease domestic interest groups.

WTO Director General Pascal Lamy has stated that he would like to see the Doha Round serve as more than a stock-taking exercise, but the recent financial crisis and the continued deadlock on agricultural subsidies in Europe and the U.S. and intellectual property agreements continue to be major roadblocks for concluding the Doha round with a substantive set of trade agreements.

Lamy has expressed hope that the ministerial in Delhi will provide an opportunity for ministers to begin mapping out a conclusion to the Doha round.

“I think this ministerial… can be a very important step for our goal for the successful completion of the Doha round of negotiations,” U.S. Trade Representative Ron Kirk told reporters on Tuesday.

The Obama administration has not yet fully defined what its trade agenda or proposed policies might look like, but this month will likely bring greater clarification from the administration at both the mini-ministerial in Delhi as well as the much higher profile G20 meeting in Pittsburgh later in the month.

The Doha round began in 2001 with the intention of removing trade barriers in both the developed and developing world, but recent ministerials – most recently Geneva in 2008 – have ended in deadlocks as the EU and U.S. have found it politically difficult to cut agricultural subsidies.

Developing countries have expressed concern with Trade-Related Aspects of Intellectual Property Rights (TRIPS) which force developing countries to honour the patents of pharmaceutical manufacturers and abstain from domestically producing generic drugs- widely seen as a trade-off between intellectual property rights or public health.

The U.S. is perceived as one of the biggest proponents of intellectual property agreements and has worked through multilateral as well as bilateral relationships to seek their enforcement.

“The U.S. is accused of granting patents on dubious grounds and then trying to enforce them through the bilateral free trade agreements and investment treaties,” senior policy analyst Dr. Steve Suppan at the Institute for Agriculture and Trade Policy told IPS.

Obama has called for a successful conclusion to the Doha talks, but his administration will face the difficult task of contributing to the Doha round negotiation without offending industry groups in the U.S. who will likely ask for greater protectionism.

The administration’s situation is further hampered by the fact that industry groups and trade unions have a long history with the Democratic Party and hold considerable influence.

“I do think the president will have more to say about the role trade will play in our overall economic recovery sometime between now and the G20 summit,” Kirk told reporters. “I think what may make this different is that with the change in the administration – in the United States and in India certainly, in South Africa, in other countries – you have a new cast of countries with new leadership that have a desire to try to make this happen.”

The financial crisis will hang heavy over the mini-ministerial, where many have expressed concern that the WTO may have failed to encourage appropriate regulatory measures in the financial markets.

“When you allow (the financial system’s) governance to deteriorate, when you have banks that are too big to fail, it means that you’ve abandoned regulatory supervision and you’ve also abandoned your antitrust enforcement. That’s something the Obama admin is looking pretty closely at,” said Suppan.

“The value of the WTO at this point is a venue where members can air their differences and explain what they’re doing domestically, but if the WTO is a negotiating machine where the terms of the negotiation aren’t working, then your ability to change course is very, very limited,” he said.

Food policy is another hot button issue and a group of 125 non-governmental organisations from 50 countries are calling on the governments participating in the trade talks in India over the next two days to reject the further liberalisation of food markets and promote policies that will achieve food security and rural development and safeguard farmers’ livelihoods.

The organisations, of which 13 are in Africa, argue in a letter to the 36 countries attending the mini-ministerial meeting that WTO policies have resulted in “a failed global agricultural system including extremely volatile commodities markets, a lack of global access to nutritious and affordable food, an increase in hunger, and the erosion of farmers’ incomes.”

WTO trade agreements require unanimous approval from member countries which has added to the difficulty in furthering multilateral trade agreements.

But during the Doha round, bilateral and regional trade agreements have flourished, going from 49 agreements at the beginning of the round to 167 as of last month.

This relatively new trend has been seen by some analysts as an expansion of trade agreements and trade enabling frameworks in the absence of substantive progress by the WTO at the multilateral level.

Others see the growing number of bilateral and multilateral trade agreements as prohibitive to the progress of multilateral diplomacy and helping to create a “spaghetti bowl” of trade agreements which make prospects for successful WTO trade agreements increasingly unlikely.