Asia Program

Events

Punching Above Its Weight? The G20 and the Doha Trade Negotiations

May 21, 2007 // 3:30pm5:00pm

The current round of World Trade Organization (WTO) negotiations, known as the Doha Development Round, is gasping for air. Kamal Nath, India's minister of commerce and industry, declared last year that while the Doha Round "is not dead," it is nonetheless "definitely between intensive care and the crematorium." Javed Maswood, speaking at a May 21 Asia Program event cosponsored by STAGE, opined that these negotiations—which aim to produce outcomes beneficial for developing nations—are "pretty much dead." He argued, however, that thanks to the participation of one key grouping, the developing world's clout in global trade negotiations has grown considerably. According to Maswood, the Group of 20 nations (G20)—a forum comprised exclusively of developing world countries—has shattered the long-standing domination exerted by the United States and the European Union on the WTO's decision-making process.

In principle, each of the WTO's 150 members has an equal vote. Yet in reality, Europeans and Americans have historically concluded agreements on their own, after which the accords are ratified by the broader WTO membership—a dynamic Maswood referred to as "embedded bilateralism." However, the G20 now functions as a third actor to check this U.S./EU primacy, using an often "confrontational" approach that depicts international trade debates as a matter of North vs. South. The results have been encouraging for the developing world. The G20 recently obtained an agreement from the United States and the European Union to accord India and Brazil a more prominent role in agricultural trade negotiations. Because of this blow to bilateralism, the developing world can now better articulate its key concerns within the WTO. Maswood contrasted the G20's muscular strategy to the more cooperative approach of the Cairns Group, a body of both developed and developing farm-exporting nations that has often aligned itself with the United States. Yet this less confrontational position, in his view, has not yielded positive results for the developing world.

Maswood, even while trumpeting the G20's dislodging of the WTO's "embedded bilateralism," lamented the G20's inability to push for more agricultural trade liberalization within the WTO. The international trade regime, he argued, has long excluded agriculture from trade liberalization—a feature of the regime he referred to as "selective liberalization." The General Agreement on Tariffs and Trade (GATT, the WTO's precursor), lowered tariffs on commodities across many sectors, but those on agricultural goods (particularly finished goods) have remained high. Current sticking points of the Doha negotiations are rooted in the issue of how much agricultural trade liberalization is appropriate. For example, G20 countries frequently seek higher tariff cuts than the developed world is willing to offer. Additionally, the G20 often wants to classify fewer agricultural products as "sensitive" (exempt from trade liberalization) than does the developed world. Further, despite the agreement emerging from the Uruguay Round (which preceded Doha) to phase out textile quotas, countries such as the United States have often failed to do so to the extent anticipated or desired by developing countries.

Nevertheless, Maswood concluded that the G20 is far from being an "unmitigated failure." Despite its inability to promote more agricultural trade liberalization within the WTO, it has managed to erode the disproportionate decision-making power wielded by the United States and EU in the trade organization. The G20's challenge, he argued, lies in consolidating this "new democratization" in the WTO decision-making process.



Drafted by Michael Kugelman, Asia Program Assistant/Special Projects
Robert M. Hathaway, Director, Asia Program, Ph: (202) 691-4020

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