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Doha Produced no Winners

 Arvind Panagariya

IF VICTORY and defeat were judged by juxtaposing the initial objective and final outcome, India suffered an unequivocal defeat in Doha. But by that count, Doha produced no winners. The US wanted to include labour standards in the agenda, exclude anti-dumping and peak tariffs from it and retain the existing intellectual property rights regime. EU was vehemently opposed to the “phasing out of subsidies” in agriculture as a negotiating goal and desperately wanted the Singapore issues to be included in the negotiating agenda. Both failed to achieve their respective goals.

 But victory and defeat in negotiations must be judged differently. The questions we must ask are whether the outcome was in the negotiating party’s interest and whether it had a significant impact on the negotiations. Regarding the first question, I have already argued (ET, November 21, 2001) that the Doha outcome squarely promotes India’s interest. Therefore, I focus here on the second question.

 India played a key role in influencing the Doha outcome on three fronts. First, it pushed for and got concessions on several implementation issues. This is not a major achievement but worth acknowledgement. Second, along with Brazil and South Africa, India led the effort for the Declaration on the TRIPS Agreement aimed at weakening the intellectual property rights regime. Though the legal standing of WTO Declarations as opposed to “Agreements” is tenuous, this is a potentially major accomplishment. Finally and most significantly, India played a crucial role in keeping investment, competition policy, trade facilitation, and transparency in government procurement—the so-called Singapore issues—out of the negotiating agenda.

 India had to put up a fight on the last issue until the very end. The initial draft declaration admitted the inclusion of all Singapore issues into the negotiating agenda as a possibility.  This was revised on October 27 to state that the Fifth Ministerial in 2003 would decide the modalities of negotiations on the issues, assuming an implicit agreement on the launch of the negotiations.

 After much haggling in Doha, the November 13 draft backtracked considerably. It stated that the decision on whether to launch negotiations on these issues would be made in 2003. On the surface, this would seem consistent with India’s position.  But there was a catch.  India had consistently argued that as per the Singapore Declaration, the decision to launch negotiations on the Singapore issues required “explicit consensus.” The draft did not acknowledge this and India remained firm in its opposition.

 In the end, the impasse was broken by the creative ambiguity of language. The final declaration introduced the requirement of explicit consensus but left vague whether it applied to the decision to launch negotiations or modalities. India insisted on clarification, which was provided by the Qatar trade minister Kamal in his concluding statement. Though this statement carries no legal standing, it sufficed to bring India on board.

 While India’s fingerprints on the final document can, thus, be hardly denied, given its insignificant role in world trade, how was it able to exert any influence? Two factors, both unique to Doha, aided India. First, given its political stakes, the US had no intentions of returning home without an agreement. Therefore, even though it was opposed to the EU expansionist agenda, it would have gone along with the language in the November 13 draft had it been acceptable to all other countries. The US knew it would have a veto in 2003 with or without the requirement of consensus in the Doha declaration. This is where India’s opposition became important.

 Second, repeated claims that the round was a development round left developed countries boxed in their own rhetoric. They would not look good launching a development round without endorsement of a poor country accounting for one fifth of the world’s population. Bringing India on board was essential.

 Looking ahead, India needs to shed its persistent negative image among negotiators. Our negotiating position must be defined by what we want, not by what we do not want. With the entry of China, larger than us in population and much larger in the world market, the risk of our isolation is greater than ever.

 Economic Times, November 21 2001 (Tuesday Debates)