Behind the crisis at the WTO talks

By Martin Khor

China Daily, May 18, 2011

Some major developing countries like India, Brazil and Indonesia have to cut their industrial tariffs by 50-70 percent, while developed countries have to cut only about 25 percent.

As if those were not enough, the advanced countries, led by the United States, are now demanding that major developing countries, especially China, undertake super-liberalization by cutting their tariffs to zero (or near zero) in at least three sectors - chemicals, industrial machinery and electronics.

This is an unreasonable demand, especially because it had been agreed that participation in this "sectoral tariff elimination" would be voluntary. China, which would be under the heaviest of pressures, has argued that it already reduced tariffs heavily when it joined the WTO.

Beijing has said that though it is willing to contribute more in the "sectoral tariff elimination", it could not be done on the extreme terms demanded by Washington, because its industries cannot take the strain of the already low tariffs being reduced further. Similarly, Brazil, India and South Africa have resisted these demands.

Besides, the US said at the April 29 meeting that it also wants China and other developing countries to open their agriculture and service markets further.

The developing countries resent being made the beasts of burden for the Doha Round, more so because it was originally meant to benefit them and they are already contributing more than the rich countries.

A frustrated Brazilian ambassador said that if the rich countries continued to put unreasonable pressures on their developing counterparts, then the Doha Round would not reach its "end-game" but "the end of the game".

There are doubts whether Washington can stand by its own obligations, because US President Barack Obama does not have "fast track" authority, and it is uncertain whether Congress will support a WTO agreement the administration enters into.

Thus, the impasse looks unbreakable. At the April meeting, the member states and WTO Director-General Pascal Lamy agreed to make yet another attempt to get political leaders to break the deadlock. The next meeting, at the end of this month, will assess whether the situation has improved.

The author is executive director of South Centre, a think tank of developing countries, based in Geneva.