New Round Prospects Dim

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New Round Prospects Dim

Faced with firm resistance from the developing world, advanced industrial countries have continued to seek consensus for the launch of a new round during the 4th Ministerial Conference to be held in Doha, Qatar November 9 - 13 2001. This elusive consensus has become a source of growing concern to the US, Japan, and the EU.

The outcome of the G-7 Meeting of Finance Ministers and Central Bankers in Washington, D.C. last April saw the developed world reiterate the benefits of proceeding with a launch of a new round later this year.

Within two days of the issuance of the G-7 communiqué, the Indian Minister of Commerce publicly condemned a new round. He indicated that there were insufficient benefits on the table for there to be developing world participation.

This Indian statement came just as the G-24 was concluding its Washington, D.C. meeting, and offered yet a further signal that developing world concerns remain unaddressed. During the G-24, China took a higher profile role, calling for more developing country access to developed country markets. This is not proposed as an issue for negotiation in a new round, but rather as a call for a unilateral act of inclusion.

The June 25th informal General Council meeting to address the gap in views on a new round ended inconclusively. Though Moore moved the 'deadline' for consensus to late July, there is insufficient flexibility being shown among developed countries to advance new round preparations. Developing countries, including a number of Asian states, are determinedly opposed to proceeding without a transparent agenda that recognises their fundamental interests and concerns. This vital ingredient, as readers are well aware, has been disregarded even in the aftermath of December 1999.

Officials at USTR have acknowledged publicly that if President Bush fails to win Congressional approval for fast track trade negotiating authority this year, his next opportunity will not emerge until 2003. Clearly, the idea of pursuing fast track in the 2002 Congressional election year has little appeal among Bush Administration strategists. In other words, they are not about to trade off the neo-conservative agenda for an authority the Clinton Administration lacked but was able nonetheless to expand US market access internationally.

Based on the foregoing view, we now expect USTR Zoellick to begin high visibility messaging that a new round start does not depend upon fast track being in place this year. While true that such has been the case in the history of multilateral trade negotiations, the behaviour of USTR Zoellick and senior Administration officials makes it clear that they still believe in a fundamental way that fast track is an essential ingredient for leveraging the system toward comprehensive trade negotiations. There is as well the sense that negotiations will not mature in the absence of such authority.

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