European Affairs

Winter 2002

 

Trade Relations
The Success Stories Behind the Agreement in Doha
By Peter F. Allgeier

 

There were two important success stories behind the agreement to launch a new set of world trade negotiations at the World Trade Organization ministerial meeting in Doha last November.

They were not the only reasons the meeting succeeded, but they are particularly relevant to the trade and investment relationship between the United States and Europe, and to our work together on behalf of the global trading system. They also reflect the sorts of things that we will need to continue to do if we are to succeed in the completion of the negotiations, not just in the launch of them.

The first story was the intense cooperation that took place between the United States and the European Union in order to launch the new negotiations, particularly during the six months leading up to Doha. I do not think anyone would dispute the fact that the United States and the European Union were consistently imparting momentum to the preparations for the launch of the negotiations, not only in public relations terms, but also, more importantly, in substantive terms.

What that means is that we worked together to get as much convergence of our positions as possible so that we were pushing toward the same kind of negotiating agenda. We did not, of course, reach convergence on all issues. Where there were differences, we worked to accommodate each other's sensitivities, for example over trade remedy laws, which many Americans have been reluctant to place on the negotiating table.

There were also a number of environmental issues on which we could not reach complete agreement. But we were able to maneuver around these difficulties in setting the agenda for the negotiations. The result was that everybody felt that they had at least been given an opportunity to pursue their major interests in the negotiations, in ways that did not prejudice the sensitivities of other countries.

Robert Zoellick, the U.S. Trade Representative, and Pascal Lamy, the European Trade Commissioner, were very clear that, despite our differences, we shared the strategic objective of getting the round launched, and that that was extremely important for the world economy as well as our own economies.

There was a successful effort to manage and to address highly sensitive bilateral issues between the European Union and the United States in ways that did not spill over in a negative way onto our common objective of launching the round. The resolution of the long-running dispute over trade in bananas, for example, was an illustration of that effort.

Another important element was the way Europe and the United States worked together in complementary ways to reach out to the developing countries. Everybody understands that the membership of the WTO is very different from when we launched the Uruguay Round in the 1980s, let alone the Tokyo Round that preceded it.

Developing countries are now a major factor in WTO negotiations. And the European Union and the United States worked very hard in the months before Doha to meet with leaders and ministers in Asia, Latin America and Africa.

Among the most helpful developments, in a very practical way, were the two informal ministerial gatherings that preceded the formal ministerial meeting in Doha - one on Labor Day weekend in Mexico City, the other in October in Singapore. These meetings were attended by a representative group of about 20 to 24 ministers.

When those ministers got to Doha, they had already established relationships. They had already dealt with each other in substantive ways, and they shared a degree of trust as well as, to a certain extent, a common objective. This process was fostered very actively by the United States and by Europe.

So we saw an example of U.S. and EU leadership in the best sense of the word. We did not force people into corners, but led an inclusive process that brought people along to a beneficial result.

From the U.S. standpoint, one of the most important outcomes of Doha is the re-establishment of our leadership in the international trading system. It is extremely important for us to obtain trade promotion authority from Congress in order to solidify and maintain that re-established leadership position.

The second success story was the very different and more constructive role of the developing countries in Doha, at least compared to the ministerial meeting in Seattle that ended in failure two years ago. This new, more positive approach ranged right across the geographical spectrum.

The Latin American countries, for instance, were strongly interested in ambitious progress on agriculture. And they realized that in order to get that result, they would have to accept a broader agenda for the negotiations so as to accommodate the interests of the European Union, Japan and Korea. In that way, the Latin countries made a very positive contribution.

Mexico, Brazil, and Colombia also played major roles in bridge building, especially on very delicate issues. Mexico chaired the group that resolved the sensitive issue of the relationship between rules protecting intellectual property and wider access to medicine for developing countries confronting epidemics like HIV/AIDS.

Brazil was very constructive in finding middle ground on that issue, while Colombia played a very positive bridge-building role in resolving a last minute dispute over bananas. These were just three examples of developing countries from Latin America playing a constructive role in moving us toward agreement.

One of the most striking developments was the new role of the African countries. The amount of coordination, internal communication and pragmatism among the African delegations seemed to have dramatically improved since Seattle. They were determined to play an important role in the negotiations.

They did so in a very constructive way, pointing out the limitations they faced in taking on new negotiations, while looking for solutions that would be acceptable to all sides. Nigeria, Kenya, Tanzania and South Africa took leadership roles in making sure that the African countries would participate in the negotiations and that their interests would be protected. In Asia, Singapore and Hong Kong played leadership roles.

The result was a very different dynamic, which properly reflected the new composition of the WTO's membership. It is essential that this continue. We must move beyond promises to work on "capacity-building" in developing countries and get to the point where we actually do it, so that they can participate meaningfully in the negotiations.

This is particularly important for investment and competition policy, which figured prominently on the European agenda. Many of the African countries, in particular, felt that they did not yet have the capacity - in terms of institutional and personnel resources - to embark on negotiations in these new areas.

It was quite encouraging that when the European Union suggested offering an opt-out from negotiations on issues like investment and competition policy to countries that did not want to participate, the Africans immediately said: "No thanks."

The African countries said they did not want to be second-class citizens. They wanted to be full participants in the international trading system and in the WTO. And while that may be frustrating for those who want to move rapidly ahead in a particular area, it is a very, very positive response for the system as a whole.

These experiences point to two very important elements that we must maintain if we are to complete the negotiations in the very short time frame of three years. Those are continued U.S.-European leadership and cooperation, and continued constructive involvement by the developing countries.

Because we have agreed to this three-year period, we have to start the negotiations immediately. The limited time frame also makes it even more important for the United States to have trade promotion authority, so that we can exert the maximum possible influence on the direction, the pace and the form of the negotiations.

It will also be essential to engage in serious "capacity building" for developing countries, which feel they have signed onto a more ambitious agenda than they would have liked. We must fulfill our commitment to support them in building up their capacity, not just for negotiating trade agreements but, more importantly, for implementing the agreements within their own economies. o