By Taimur Ahmad
There was much backslapping in Geneva in the early hours of August 1 as trade diplomats emerged from five days of round-the-clock negotiations to declare a breakthrough deal in the World Trade Organization's Doha global trade round. But what all the ensuing self-congratulation glossed over was the fact that the real negotiations have yet to begin.
The WTO has conceded that it will not complete the talks by its year-end deadline for the round, and putting the remaining pieces together for the extended deadline of December 2005 still remains its biggest challenge.
The Geneva agreement's biggest success is to commit the European Union to cutting billions of dollars in trade-distorting farm subsidies. The US has also in principle agreed to cuts with similar effects. But the deal brings no immediate reductions in trade barriers. Instead, it simply sets out broad guidelines for the conduct of future negotiations for the trade round which began nearly three years ago.
Under the agreement, 147 members of the WTO agreed to a framework for liberalizing trade in agriculture, manufacturing and services, as well as updating customs procedures that have remained unchanged for decades. But no figures have yet been agreed upon.
The deal is almost universally applauded by trade negotiators as a long overdue vote of confidence in the World Trade Organization and the rules-based international system ? just when that system seemed to be hurtling towards gridlock and worse. In the wake of collapsed WTO meetings in Seattle and Cancun, another failure could have been the death knoll for the multilateral system. It might also have meant a flurry of bilateral and regional trade agreements, which could have undermined the global market.
New mix
Yet instead, according to Celso Amorim, Brazil's foreign minister and lead negotiator, the deal represents a ?new multipolarity? taking place within the WTO. Amorim, who also led negotiations for the group of 20 developing countries (G20), believes the Geneva agreement ?offers the precision required at this stage, while providing a solid basis for a true ?development round'?.
?The Doha mandate has provided developing countries with a platform for associating trade liberalization with social justice,? says Amorim, whose negotiating skills were a key part of Brazil's strategy for becoming a dominant player on the world stage.
The G20 ? which also includes India, China and South Africa and represents 22% of the world's agricultural production and 70% of rural workers ? first emerged at the WTO ministerial meeting last September in Cancun, Mexico, where ministers tried in vain to hammer out the Doha agreement. But those talks failed because rich and poor countries could not reach a consensus, particularly on agriculture.
Further work
But for the Doha Round to be completely successful, much more needs to be done. Specifically, provisions for cutting farm tariffs and liberalizing trade in industrial goods and services must be elaborated. Many observers think 2006 or 2007 is a more realistic date for its completion.
There are also questions about what spurred an eleventh-hour agreement in Geneva. Some cite the desire of Pascal Lamy, EU trade commissioner at the time, and Robert Zoellick, the chief US trade official, to clinch a deal shortly before they're both due to leave office. The question remains whether politicians have signed an agreement they have no intention of meeting.
The biggest threat comes from the vested interests of rich countries. No sooner had the ink on the Geneva draft dried than France's President Jacques Chirac proclaimed the text to be ?profoundly unbalanced and contrary to the interests of the European Union?.
?France wants to see the conclusion of the Doha Round, but it cannot give its agreement to negotiations on such a basis,? he said, calling on the European Commission to ?do everything possible to rebalance the text?.
Only political will from capitals of the industrialized world, it seems, can ensure any meaningful progress when talks resume after November's presidential
elections in the US.