Two tracks out of the Doha wasteland?

Pascal Lamy wants to stir up more action in the WTO's Doha negotiations —at least its appearance—by opening up a 'second front' for the exchanges. One group will battle on to refine the technical rules and one will start a 'show and tell' exploration of the implementation of the rules.

"My own sense is that there is scope to work on these two areas along two simultaneous tracks. One would see technical engagement in the negotiating groups move to a higher gear to cover a number of technical issues as mentioned previously. Simultaneously, Members would start some sort of ‘outcome testing’, through bilateral or plurilateral discussions, where they would provide each other with greater clarity on the use of flexibilities and through it, on the value of the deal." Extract from Lamy's address to the WTO General Council meeting

But if the problem is that a large number of countries are reluctant to engage at all, how will widening the front lead to an earlier outcome?

The Doha negotiations are moribund because they've been poisoned by their own intestines. The guts of the deal is in the so-called 'modalities': now a knotty mass of rules for cutting barriers, rules for compensating the barrier cuts, rules for making exceptions to the barrier cuts, and provisions adding exceptions to the exceptions. They add-up to hundreds of pages including gobbledy-gook so impenetrable that most governments have no idea what it will mean for actual imports and exports. That's a major reason the talks have ground to a halt.

Worse, it's not hard to see that in several ways this minutely-structured deal prolongs and consolidates the contagion of tailor-made protection that it was supposed to remedy.

A much more effective 'two track' solution would be to allow the WTO member countries to 'self select' into two groups. One group would bring together countries that wanted to open global markets open competition and higher growth with fewer government taxes and subsidies. They would try to negotiate a reciprocal deal to open markets on a non-discriminatory basis.

The other group, including many developing countries such as India that don't want to open their markets and see the WTO rules as a protection for their trade autonomy (they are that, too), would not negotiate. But neither would they have the right to impose unwieldy, complex, recidivist conditions on the deal made by the first group.

I have recently been working on the outlines of just such a two-track deal using a non-discriminatory form of a kind of trade deal known as a 'critical mass' agreement. I've been modeling the outcomes of some possible deals and comparing them to a representation of what could come out of Doha as it is presently structured. As part of the modeling, I have constructed some lists of the developing country groups that have extracted various additional exceptions and concessions—beyond the 'special and differential' concessions made to the entire developing country group—including the right to make no changes to their trade barriers.

As an example of the bizarre contortions that these exceptions processes have included, note that the second-biggest economy in Africa and the biggest oil-producer on the African continent, Nigeria, has been offered the 'small and vulnerable' designation (footnote 11 of the current Agriculture 'modalities').

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