WTO Shifts Meeting Goals Amid Doha Stalemate

The rainy, gray weather over Geneva matches the mood of the first ministerial meeting of the World Trade Organization since 2009, with ministers turning their attention to other areas amid little hope of resurrecting the stagnant Doha round of trade talks.

"This ministerial is like a Russian doll—the deeper you go, the less and less you get," says Simon Evenett, a professor at the University of St. Gallen in Switzerland. "In fact, the only part of the doll that looks like anything is Russia's accession."

Trade ministers and representatives from the 153 member countries will gather in the Swiss city for the ministerial meeting Thursday, with the closing session scheduled for Saturday evening.

The Russian Federation will officially join the international organization on Friday, the last of the Group of 20 leading and emerging nations to do so after it took 18 years to agree to concessions on tariffs and other trade policies. Samoa and Montenegro will also join, the only concrete events on an agenda where ministers will mull the future of the Doha Development Agenda, the trade talks started after the Sept. 11, 2001, attacks with the aim of making global trade rules fairer for poorer countries.

"Ministers deeply regret that, despite full engagement and intensified efforts...the negotiations are at an impasse," a note circulated ahead of the meeting said. "It is unlikely that all elements of the Doha Development Round could be concluded simultaneously in the near future."

They must now decide how to make progress on this thorny issue, with one option being an overhaul of the entire framework for making decisions. Currently, all 153 WTO members have to agree before new rules can come into force, but a change could mean faster progress in the future.

"We need to explore new negotiating approaches to end the stagnation on the Doha Round," said Ambassador Michael Punke, U.S. permanent representative to the WTO.

Another option would be to break talks down into areas where members can reach consensus and forge ahead with those, without waiting to agree on all elements at once—known as the "single undertaking"—as originally planned. Others suggest restarting talks from scratch with a different agenda, given fundamental changes in the global economy such as the emergence of Brazil, Russia, India and China over the last decade.

"There's a lot of baggage; maybe some fresh diplomatic eyes would be good," the University of St. Gallen's Mr. Evenett said. "Do we have to stick with existing agenda, which is defined by the legacy of 1990s?"

The deadlock is also costly. Completing Doha could generate a boost to the global economy of some $160 billion, Bernard Hoekman, director of the international trade department at the World Bank, wrote in a recent paper.

But there are still some glimmers of hope.

Ministers are expected to sign off on a new government procurement agreement, or GPA, under which members open up public procurement of goods, services and capital infrastructure. In most countries, government procurement accounts for 15% to 20% of gross domestic product, according to the WTO.

Ministers are meeting to discuss outstanding issues ahead of the main ministerial and hope to conclude a new agreement, which Nicholas Niggli, the Swiss diplomat chairing GPA negotiations, said could open up opportunities "representing tens of billions of dollars/euros annually."

There are 42 member countries of the GPA with another nine, including China, negotiating to join.

Some delegates may also want to discuss using the WTO to resolve disputes over currencies, a debate driven by Brazilian anger over China's policy of keeping the yuan pegged to the U.S. dollar. However, this isn't on the official agenda.

Brazilian Trade and Industry Minister Fernando Pimentel said last month that exchange-rate factors are devastating the productive structure of Latin American countries. At the same time, China is mulling where to invest its $3.2 trillion of foreign-exchange reserves, a senior civil servant said in Brussels.

Ministers will also discuss how to bring the world's least-developed countries into the organization, with the ministers set to agree on tools, such as trade-for-aid programs, and a subcommittee to coordinate special treatment and assistance in order to develop them.

Source: Wall Street Journal