Dialogue on the Doha trade round

25 April 2006 | Minutes

Chandra Patel of trade advisory NGO SEATINI, described the state of negotiations in key areas for the World Trade Organisation’s Doha round of multilateral trade negotiations. He concluded that the most likely outcome was “ending with a whimper” – that ministers would agree to extend the deadline for negotiations beyond the end of the year. This decision must be taken by July.

Sandra Polaski of the Carnegie Endowment, summarised her recently published research on the likely impacts of different scenarios in the Doha negotations. Contrary to previous Bank research, Polaski’s analysis shows that gains will be much larger from manufacturing liberalisation than agriculture. In fact, in agriculture, almost all benefits will go to developed countries and a handful of globally competitive middle-income countries. Polaski also stressed the importance of allowing the poorest countries to protect special products, the costs of which will be minimal for competitive exporting countries.

Thomas Palley of the Open Societies Project criticised the Bank’s export orientation and support for neo-classical growth theory. The challenge, he said, for developing countries was to develop structures of income and demand generation.

Richard Newfarmer of the Bank’s trade department, insisted that those who cared about development should attempt to save the Doha round. He questioned the value of a proliferation of bilateral and regional trade agreements. Newfarmer also had doubts about Polaski’s study. He said that Bank research shows that losers will be less affected than Polaski’s study indicates, and that gains are understated due to the static nature of Polaski’s model.

Michael Hadjimichael of the IMF said that while some believed policy space was needed for development, “this is wrong and we disagree with that”. He insisted that the IMF is not important in coercing countries into particular trade strategies however, and said that developing countries need comprehensive trade strategies which are integrated into poverty reduction strategy plans.