Getting a Doha agreement: no time to lose

As governments around the world continue to look for the best way to stimulate sustainable economic recovery, we in the trade policy field offer a simple answer: trade is the biggest stimulus we can give right now. And thanks to the trade liberalisation we’ve witnessed since the last big, multilateral trade agreement was reached in 1990s, trade continues to be the biggest wealth creator we’ve ever known. This part, at least, seems simple enough. Unfortunately, reaching agreement on the next big trade deal, the Doha Development Agenda, has been anything but simple—the fact we’ve been at it for 10 years without agreement is testament to this. The question now is, how long is too long to reach an agreement? In a report issued at last week’s annual World Economic Forum in Davos, an eminent group of trade experts gave us a pretty convincing answer: we need to do this by the end of this year.

These experts know what they’re talking about. The Trade Experts Group which produced this independent report is chaired by Peter Sutherland (Global Agreement on Trade and Tariffs/WTO Director General from 1993-95, and who oversaw the conclusion of the last trade round) and Professor Jagdish Bhagwati (Columbia University). For Britain’s part, Prime Minister David Cameron  welcomed the report’s findings: "we cannot spend another 10 years going round in circles……we have one last chance to get this right", adding that "no-one should hold anything back for later.  There is no later".  

For anyone in need of convincing of the importance of Doha, here’s the argument: it is the biggest and most ambitious, liberalising, multilateral trade agreement ever attempted by the World Trade Organisation. Not only is it an insurance policy against protectionism, it would reform trade distorting farm subsidies in rich countries and eliminate agricultural export subsidies, and reinforce the WTO and multilateral framework.  In fact, the benefits from trade facilitation alone – simplifying international trade procedures –are huge. If you’re still in doubt, I suggest you take a look at The Peterson Institute’s “Figuring out the Doha Round”, which puts annual global GDP gains from this alone at over $117bn.

2011 isn’t an unrealistic timescale.  And it’s reasonable to aim for a binding deadline after having dragged it out for so long.  A few small steps by the key players are all that is needed to get us over the finishing line.  But if there hasn’t been progress, especially in services, industrial and environmental goods, cotton and duty-free quota-free goods for LDCs (by all the G20 countries) by the end of this year then we need a radical rethink of how trade deals are going to be negotiated in the future, how ambitious they can realistically be, and who’s going to be able to enforce them.

Last Friday, governments were given a clear deadline for making Doha work. There’s no time to lose.