UK Business Leaders Issue Doha Warning

Representatives of leading international businesses in the UK have published a letter expressing their concerns about the "precarious state" of the Doha Round Talks, eliciting a strong response from Business Secretary Vince Cable, who has agreed that 2011 is a "make or break year".

Eight leading businessmen, including the chairmen of the International Chamber of Commerce (UK), the BT Group, Rolls-Royce, and BP, have written to the Financial Times with the intent of impressing upon the government their belief that the Doha Round must not be permitted to fail. The Round aims to effect a change in worldwide trade barriers by seeking to cut trade-distorting agriculture subsidies, phase out tariffs on industrial goods, open trade in services, facilitate customs operations, open trade in clean technology, adjust anti-dumping rules, and offer duty free and quota free access to the exports of the world's poorest countries.

The Round is chaired by the World Trade Organization's Trade Negotiation Committee, and is scheduled to produce new or revised draft texts before the Easter recess, with the aim of agreeing upon these and other legal drafts by June/July, and concluding the Round by the end of the year. Negotiations have been consistently beset with difficulties, and director general Pascal Lamy frequently warns of the dangers of the failure of the negotiations, asking members to reflect upon the likely consequences, were this to happen.

It is clear from their letter that this group of eight businessmen have indeed reflected upon the corollaries of failure. The letter references recent "weary" stories, in particular, the doubt as to whether governments are capable of reaching a deal by the end of the year. Certainly, Lamy himself has stressed that the window for opportunity is slim. Nonetheless, despite the temptation to suggest the Round's termination in view of the raft of stumbling blocks it has faced, the letter argues that the easy way out ought not to be chosen.

Instead, the letter praises the "hard-won gains" of the Round, and states that: "Existing offers alone could render Doha the most ambitious global deal ever negotiated – providing the basis for deep tariff cuts in key areas, technical reforms to make doing business abroad easier, and simpler mechanisms to resolve trade disputes". Compromise is urged, for: "The downsides of a collapse in the talks are stark by comparison: a possible weakening of the multilateral trading system and, by extension, its capacity to keep in check protectionist pressures". According to the letter, there is a danger that, were a deal not completed within the agreed upon deadline, one may never be achieved.

Failure, therefore, is not an option in the opinion of these businessmen. The letter concludes with a plea to G20 leaders. They are asked "to recommit to a deal and to give their negotiators the necessary latitude to land it. They – and we – have a very final chance. We must all invest the time and effort to get a deal done".

Business Secretary Vince Cable clearly took note, and responded swiftly. He said: "2011 is the make or break year to finalize the Doha round of trade negotiations. A conclusion of these talks would deliver a GBP110bn (USD180bn) boost per year to the global economy; act as a safeguard against future protectionism, and allow substantial improvement of business transparency and security. Concluding Doha would ensure a reduction of the cost of inputs and moving goods across borders, allowing multinational firms to reorganize their international supply chain more efficiently, cut costs and increase profits". Cable stressed that the government is committed to the Round's conclusion within the year.

The full list of the letter's signatories is as follows:

            John Buchanan, Chairman, International Chamber of Commerce (UK) and Chairman, Smith &        Nephew;

            Richard Burrows, Chairman, British American Tobacco;

            Paul Polman, Chief Executive, Unilever;

            Sir Mike Rake, Chairman, BT Group;

            Sir Simon Robertson, Chairman, Rolls-Royce;

Carl-Henric Svanberg, Chairman, BP;

Peter Voser, Chief Executive, Shell; and

Paul Walsh, Chief Executive, Diageo.

London, Monday, April 18, 2011

By Robert Lee

Source: Tax-News.com