WTO
As the worldwide economic crisis of 2008 demonstrated, the economies of governments the world over are highly interdependent. Within this context, the World Trade Organization is coming under closer scrutiny. Negotiations are repeatedly failing and governments continue to violate commitments under WTO agreements with a dispute resolution process many countries find unsatisfactory. This paper reviews both the theoretical and practical economic and political implications of the faltering -yet ongoing -DOHA Round trade liberalization negotiations.
Recent WTO Negotiations: Seattle, Cancun, and Doha
Difficulties during WTO negotiations over the last decade can be attributed to three primary factors: the sheer numbers of member countries who all want to actively participate, the divergent interests between developed and developing nations, and finally the bureaucratic and management complications which arise from the increasing scope of WTO regulations. The most recent round of trade negotiations in the WTO began in the winter of 2001 in Doha, Qatar. In Qatar, the Doha Development Agenda was lauded as the most comprehensive and ambitious undertaking by the WTO yet (Reiterer, 2009, p. 359). The Doha Development Agenda, as it is informally known, includes provisions which focus on agricultural subsidies, services, and the problems facing developing nations (Reiterer, 2009).
At the time, the negotiations begun in Qatar, neither China nor Russia had yet acceded to the WTO; currently members of the WTO involved in the negotiations number 154 countries with more countries in the process of applying. The WTO has a consensus-based model where every country has in effect a veto over every decision and which requires decisions to be unanimous in order to binding (Reiterer, p.366, 2009). The tools of negotiation and bargaining are faced with an impressive obstacle; that of forcing concessions and compromises from so many different countries (Reiterer, 2009). Though the consensus rule often operates to equalize bargaining power among small economies and large economies, it can also lead to negotiation deadlocks.
The ministerial meetings of the WTO have been an exercise in negotiation deadlocks. The last two ministerial meetings of the World Trade Organization in 2009 and 2011 were both held in Geneva, Switzerland (Scott & Wilkinson, 2011). The 2009 ministerial meeting was considered a success but delegates did not discuss any of the substantive proposed mandates placed on the Doha Development Agenda. They did not because negotiations collapsed in July of 2008 and discussion over the next year failed to produce the degree of progress which would have justified a serious undertaking of the agenda (Scott & Wilkinson, 2010, 142). Likewise another deadline for concluding the Doha Round negotiations in December of 2011 was also missed, bringing negotiations up to ten years. The only bright spot was the accession of Russia to the WTO and a renewed commitment by the member countries to identify new negotiating strategies (Associated Press, 2011). In the following pages, I attempt to identify the mechanisms which would allow one to measure the economic consequences and the implications of either protracted trade rounds or an outright failure of the Doha Round negotiations.
Economic Consequences of Failed Negotiations: Positive & Negative
Estimating the economic costs of failed negotiations to liberalize greater trade is a matter of emphasis. The economic costs will be determined, in large part, by focusing on the question of who benefits and who is harmed by either scenario. The two scenarios are one in which the Doha talks move forward and one in which they are indefinitely stalled. In this sense the economic casualties, so to speak, can be defined in a number of binary categories. There are the interests of the developed nations v. developing nations, the interests of importers v. exporters, and the interests of consumers v. those of industry, and finally the interests of WTO members v. those of nonmembers. These binary categories, are of course an over simplification. They, however, provide a framework which allows one to identify the true political economic costs of the WTOs recent struggles. Equally important, the binary framework also allows for a more in-depth look at the economic benefits that may accrue to some groups; in this instance, especially nations who are nonmembers of the WTO and nations who stand to lose if the talks move forward. The binary categories although not true analytical categories, nonetheless, identify the field of participants whose losses and benefits must be considered in the overall analysis. The categories help to answer the question: how can we identify and assess the costs and benefits of failed...
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