Peer reviewed analysis from world leading experts

Doha: Heading for failure?

Reading Time: 8 mins

In Brief

It looks like Doha is heading for its first ever round failure, unless there is a big rescue operation directed by presidents and prime ministers — above all, those of the United States and China — or a partial salvaging as former U.S. Trade Representative Susan Schwab recommends.

This would be the first abandoned Round since multilateral trade negotiations were invented in 1947. This raises three basic questions: why this stalemate? What does it mean for trade and the global economy? And can/should anything new be done?


  • A
  • A
  • A


  • A
  • A
  • A

To set the context, between 1948 and 1998 a steadily growing number of GATT/WTO participants concluded 12 multilateral trade agreements. The last of these were in the late 1990s — the Information Technology Agreement in 1996, the Basic Telecom and Financial Service Agreements in 1997, and duty-free cyberspace in 1998. Since then, three basic trends have emerged.

First, there have been few new agreements. The WTO agreements and the policies of the major countries have remained about the same for a decade or so. In the US, the last major changes in the domestic trade regime were the 2002 farm bill and the elimination of textile quotas at the end of 2004. Internationally the main changes since 2001 — when China and Taiwan joined, and the Doha Round got started — were negotiations of WTO membership for Vietnam, Saudi Arabia, Ukraine, a number of smaller developing countries, and perhaps soon Russia. Lots of FTAs have been concluded of course, but none of the four big economies, which together account for more than half of world exports — the US, China, Japan and the EU — have reached agreements with one another, so the effect remains modest.

Second, there have been few major new protective policies. The American trend in fact seems to have been the opposite, with Congress considering fewer protective bills, business’ use of trade remedy laws steadily declining, and perhaps a generally strengthening sense that the WTO agreements are part of the economic landscape and shouldn’t be breached. Trade thus continued to grow, as steady improvement in logistical industries and telecommunications reduced transactional costs and tariff systems steadily lost power over production and trade flows. There are some exceptions, such as the US tariffs on trucks and sugar and orange juice, but in most cases tariffs are evolving into sales taxes.

Finally, respect for the system seems to have strengthened. Late in the decade, the trading system went through a powerful test in the form of the financial crisis, and a collapse in trade during 2009 as severe as that of 1930. During this period, the US along with the other major WTO and G20 members were pretty successful in keeping markets open during financial disaster and rapidly rising unemployment, and trade has sharply rebounded.

So then why the stalemate? What might it bring? And what to do?

Regarding the Doha stalemate five possibilities, not mutually exclusive, occur to me.

First, it is possible that the trade ministers involved in Doha haven’t been as creative or tried as hard as their predecessors. But this explanation seem unlikely given the numerous changes of personnel in almost all the major participating countries since 2001 have failed to break stalemates evident since Cancun in 2003. The problem seems much more systemic than personal.

Second, it has become increasingly difficult to reach agreements as WTO membership grows. The current 153 members present greater difficulties compared to the 120 that concluded the Uruguay Round in 1994, the 90 doing the Tokyo Round in 1979, or 23 launching the GATT in 1948. But this explanation also doesn’t hold up since the stalemate is really among a few big members with lots of smaller members more or less looking on.

Third, due to global economic and political conditions, this may simply not be  a good decade to make big agreements. One obvious reason would be the stress of adjusting to China’s explosive trade growth. (In 2001, China counted US$266 billion in merchandise exports and US$243 billion in imports; by 2010 this rose to US$1.6 trillion in exports and US$1.4 trillion in imports. In a world of about US$12 trillion in goods exports this presents a lot of shifts for industries and workers to manage.) In this scenario, though the existing WTO agreements are on a rather strong and stable foundation, it’s very difficult for governments to summon up the political will to agree on going beyond them. If this is the major reason, patience and a bit of honesty about the reasons for the stalemate might be the best response.

Fourth, the Doha Round – or more technically “Doha Development Agenda” –  may have an unpopular negotiating agenda that most of the big members hope to avoid. In general, there has never been a definition of what ‘development round’ means, so the US, India, China and Brazil may approach the negotiations with fundamentally different premises and expectations. More specifically, Doha has always had agricultural reform at its centre.  The  experience of the last decade may suggest that nobody really wants agricultural reform except Brazil, Australia and a couple of smaller members — and even Brazil places more value on developing-country solidarity than on gains for its farm sector. With Japan, Korea, China, India and the EU all generally negative and the US seemingly ambivalent, agricultural reform appears to be a greater commitment than many governments want to take on (especially with demand growing and high prices raising export earnings for farmers anyway). This explanation seemed persuasive to me for a while. But the thrust of WTO Director-General Pascal Lamy’s statements is that manufacturing disagreements are at the centre of the current stalemate, so there’s got to be more to it.

Fifth, Doha could be considered a symptom of a larger problem. Namely, the negotiators’ deadlock reflects facts about the n international-system rather than about  the ‘WTO,’ ‘Doha,’ or even ‘trade.’ There are obvious parallels between the Doha stalemate and the blockage of the Copenhagen climate talks — rich countries don’t want to make commitments without China, India and Brazil, and feel in fact that in the current circumstances that would be an unfair and unproductive result. But while the governments of the three latter countries feel conscious of power and rights to shape the system, they don’t equate this with obligations to take on commitments and feel that’s the role of the established developed powers. Here, Doha is only one example of a general problem.

Whatever combination of explanations is right, the second question is whether a stalemate matters? Yes it certainly does to countries like Mali, Togo and Burkina Faso that hope for agricultural reform so they can sell more cotton or other farm products; or to countries like Cambodia, Pakistan and Bangladesh, that specialise in urban garment industries and face higher tariffs than others; or to the many developing countries, maybe especially in Africa, that would benefit from the trade-facilitation agreement. The stalemate is also bad news for conservationists hoping for fishery-subsidy reform to ease pressure on fish stocks, and for low-income American families with children, who pay for the clothing and shoe tariffs.  And of course to the exporting industries in all the members – the United States and Australia, China and India, and so on – hoping for new markets and growth,

The macro outlook seems less clear. It could be very bad economic news if stalemate is followed by breakdown, erosion of the existing agreements, and then a sharp global contraction through a revival of trade barriers. But if the pattern of the 2010s is like that of the last decade, this would be unlikely.  Instead shipping and telecom advances will presumably continue to substitute for trade policymaking as drivers of liberalisation, and tariff systems will remain on the books while growing less relevant to real-world production, employment and trade. So a continuation of the stalemate will be a foregone opportunity for growth through more exports, but the danger of a collapsing system is probably less.

And lastly, what should be done? In general, there is some systemic risk in letting this slip away, and at the very minimum a sad lost opportunity for low-income American families, poor countries and fish. So, a final try or at minimum a salvage operation are well worth the effort. But it seems pretty clear that the stalemate, if it can be solved, won’t be solved by trade ministers but by presidents and prime ministers — maybe in particular those of the United States and China, as the largest trading powers. And if the choice is between a partial salvage operation or abandonment, this will need to be managed at the top — either to achieve as much as is realistically possible, or to reduce the amount of shrapnel flying around if partial salvage won’t work. Either way the situation calls for some direct involvement and decisions from world leaders including the White House.

Ed Gresser is Director of the Progressive Economy project at the GlobalWorks Foundation.

Comments are closed.

Support Quality Analysis

The East Asia Forum office is based in Australia and EAF acknowledges the First Peoples of this land — in Canberra the Ngunnawal and Ngambri people — and recognises their continuous connection to culture, community and Country.

Article printed from East Asia Forum (

Copyright ©2024 East Asia Forum. All rights reserved.