Understanding the GATT’s wins and the WTO’s woes
The WTO is said to be in a funk – unable to conclude the Doha Round even as its members liberalise unilaterally and regionally. CEPR's newest Policy Insight argues that tactics used to get consensus at the last Round pushed the organisation into decision-making’s “impossible trinity” (consensus, uniform rules, and strict enforcement). A Doha package with something for everyone may be found, thus defeating the impossible triangle. The big-package tactic, however, won’t help the WTO confront 21st century challenges in a timely manner; for that, at least one of the triangle’s corners must be modified.
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, Doha Round
, international trade
Is there any way to break the Doha Round impasse in agriculture negotiations?
Andrew L. Stoler 08 October 2014
No progress has been made on the agriculture talks of the Doha Round since 2008. This column argues that the reason for the impasse is the approach to negotiations – in which all members are expected to participate. The author proposes a critical-mass approach to negotiations as an alternative, in which a subset of member countries can conclude a deal among themselves. The projected welfare gains from such an approach are substantial. The only obstacle is that its implementation could be politically unfeasible.
For many countries, agricultural-trade reform is politically sensitive. But that sensitivity did not prevent a groundbreaking multilateral trade agreement in the Uruguay Round of multilateral trade negotiations. Why is it that in the current Doha Round of talks no progress has been made since 2008?
Doha Round, agriculture negotiations, critical mass, Bali package, agricultural trade reform
Three new leaders face the challenge of food and fuel subsidies: Sisi, Modi, and Jokowi
Jeffrey Frankel 09 September 2014
Subsidies for food and energy are economically inefficient, but can often be politically popular. This column discusses the efforts by new leaders in Egypt, Indonesia, and India to cut unaffordable subsidies. Cutting subsidies now may even be the politically savvy choice if the alternative is shortages and an even more painful rise in the retail price in future. Ironically, it is India’s new Prime Minister Modi – elected with a large electoral mandate and much hype about market reforms – who is already shrinking from the challenge.
In few policy areas does good economics conflict so dramatically with good politics as in the practice of subsidies to food and energy. Economics textbooks explain that these subsidies are lose-lose policies. In the political world, that can sound like an ivory tower abstraction. But the issue of unaffordable subsidies happens to be front and centre politically this summer, in a number of places around the world. Three major new leaders in particular are facing this challenge: Sisi in Egypt, Jokowi in Indonesia, and Modi in India.
Development Energy Politics and economics Poverty and income inequality
subsidies, fuel subsidies, food subsidies, Agriculture, energy, Egypt, Indonesia, India, Poverty, environment, trade, WTO, Doha Round, Bali
Awakening the WTO
Hector R. Torres 21 September 2013
'Special and differential treatment' was justified on the basis that developing countries lacked the fiscal resources to smooth the transition to free trade. However, despite improved fiscal circumstances, exceptions to WTO rules remain in place. Establishing an independent watchdog for the WTO could help it to address these issues.
Admitting that 'the present is just a snapshot in a journey' is disconcerting, so we feel better assuming that the current state of affairs will turn out to be permanent. Indulging in this mistake is common, and we also see it happening in multilateral institutions – particularly if they do not have a watchdog to keep them free from self-deception. The WTO does not have such a watchdog, and this may explain its resistance to acknowledging the obvious.
Institutions and economics International trade
WTO, Doha Round, developing countries, international trade
Looking back, moving forward
Pascal Lamy 29 July 2013
After heading the WTO for eight years, Pascal Lamy offers his farewell remarks. This column reproduces them in full. Despite global turmoil including the Great Trade Collapse and an historic shift of economic power towards emerging markets, the WTO is larger and stronger. Regional trade arrangements can contribute trade opening but they are not sufficient. There is no escape from achieving positive results in the Doha Round, but this requires adjusting the agenda to today's realities by adding new elements.
I came before the General Council in 2005 when I was a DG candidate and again in 2009 to share with you my views about the WTO. Today, I come to you one last time in my capacity as Director-General, as a sign of my strong commitment to being accountable to you, the members of this organisation, whom I have strived to serve since you appointed me eight years ago.
Thank you for affording me this opportunity.
Let me begin by saying that it has been an immense honour and privilege to serve this organisation.
WTO, Doha Round, Pascal Lamy
Payoff from the world trade agenda 2013
Gary Clyde Hufbauer, Jeffrey J. Schott , Cathleen Cimino 07 July 2013
In the wake of the Great Recession, world trade has faltered. Responsible officials turned a blind eye to fresh liberalisation and condoned a quiet resurgence of protectionist measures. This column argues that the global economy needs strong medicine to rebound, and that successful WTO trade talks are part of the elixir.
In the wake of the Great Recession, world trade and investment have faltered. Responsible officials turned a blind eye to fresh liberalisation, and instead condoned a quiet resurgence of protectionist measures.
WTO, Doha Round, Bali Meeting
Keeping the WTO busy while the Doha Round is stuck
Patrick A Messerlin 29 July 2012
Should we give up on the Doha Round and leave the WTO standing still? This column argues that such stalemate is dangerous – the WTO needs to be kept busy.
There are two reasons for a long coma of the Doha Round: international and domestic.
The international problem is that the American and Chinese views on what the WTO should be and on how its large members should behave are irreconcilable.
Why do trade negotiations take so long?
Christoph Moser, Andrew K Rose 08 June 2012
Why do trade negotiations take so long? The WTO’s Doha Round is into its 11th year and still far from completed. This column uses data on regional trade agreements to identify the determinants of how long it takes to conclude regional trade agreements. The findings are not good news for the chances of the Doha Round ending any time soon.
There is widespread agreement among economists that trade liberalisation is best conducted at the multilateral level. Indeed, facilitating multilateral negotiations is one of the primary objectives of the World Trade Organisation (WTO), as it was with its predecessor the General Agreement on Tariffs and Trade (GATT). By way of contrast, regional trade agreements (RTAs) may create some trade, but they also have the potential to harmfully divert it.
WTO, Doha Round, regional trade agreements
What next for the WTO: Challenges for the WTO's eighth ministerial conference
John Weekes 23 November 2011
Next month the World Trade Organisation holds its eighth ministerial conference. This column by a veteran of trade negotiations sets the scene – documenting the WTO’s achievements and the challenges ahead.
In thinking about preparations for the WTO's critical eighth Ministerial Conference in Geneva in mid-December, we should think about the nature of the WTO, how it has evolved, and take a careful look at the challenges that lie ahead.
WTO, Doha Round, trade negotiations
Unfinished business? The WTO’s Doha Development Agenda
Aaditya Mattoo, Will Martin 08 November 2011
A recent G20 communiqué on the Doha Development Agenda has got economists excited. According to a new book introduced in this column, negotiators now have an opportunity to critically assess what is on the table and to develop a more relevant agenda and more effective ways of achieving reforms. The book aims to provide empirical evidence to inform the choices ahead.
The recent G20 communiqué on the Doha Development Agenda (DDA) marks a significant departure from past endorsements and exhortations (Bhagwati and Sutherland 2011). The communiqué acknowledges that “…it is clear that we will not complete the DDA if we continue to conduct negotiations as we have in the past…we need to pursue in 2012 fresh, credible approaches to furthering negotiations, including the issues of concern for Least Developed Countries and, where they can bear fruit, the remaining elements of the DDA mandate.
WTO, Doha Round, Doha Development Agenda