Economics management assignment on: World trade organization
What could be done to bring the current Doha round to a successful conclusion?
Ans. The only body which is governing international trade between various nations is the World Trade Organization (WTO). The organization is engaged in formulating agreements and negotiating them between the various trading nations for mutual benefits. The purpose for this forum is to help exporter and importers of goods and services conduct business efficiently (WTO 2011).
The role of WTO is administrating and implementing WTO agreements by providing a place for negotiations and bargains with its conflict settlement mechanism (IISD 2000).
The objectives of WTO include raising living standards, increasing employment, constant growth of demand and income levels and expansion of trade (IISD 2000).
The current round of the WTO negotiations is the Doha Round which was launched in Doha, Qatar, in November 2011. The objectives of this round are reduction in trade barriers and thus expanding economic growth. The key focus areas of Doha Round are agriculture, service, trade facilitation and industrial goods market access (USTR 2011).
Doha Round has raised many issues and concerns relating to market access in agriculture and non-agriculture goods. Also uncertainty prevails over removing investment and competition policy from the forum. New threats like security concerns after the September 11, 2011 terrorist attack have not even addressed yet (Foreign 2011).
The Doha round which took place in Cancun saw a setback when negotiations fall as the group of developing countries which included India, Brazil and China (with other includes important WTO members like Thailand, South Africa and Mexico) stopped to agree on the latest Singapore issues which includes issues on trade facilitation, foreign investment, competition and government procurement in the absence of developed countries commitments to lower agricultural export subsidies and also lower import taxes on the farming products (Robert, 2005).
Developing countries complained and raised the issue of slow progress in reforms of agricultural sector and thus not able to reduce trade restrictions on imports of apparels and textiles which is there in many developed countries (Robert, 2005).
Difficulty was faced by exciting WTO affiliates in adjusting to the change in power shift from developed countries to developing countries at the ministerial meeting held in Cancun. Developing countries always find that the agreements reached in negotiations and bargains in the WTO multilateral talks never gave them enough weight to their bargaining power, thus these developed countries feels that they are not required to liberalize and remove trade barriers in there respected countries (Robert, 2005).
Successful negotiations now becomes very difficult to archive because of the greater priority is on the part of achieving “fairness” by the developing and developed countries in the negotiations which are coupled with the increasing differences between developed and developing countries in order to reach a “fair” agreement. Power shifts in bargaining power in negotiations and priority on reaching “fairness” has resulted into use of regional and bilateral way for liberalization against the multilateral liberalization approach (Robert, 2005).
Other problems among the WTO members are:-
No deal can be struck if bargains are not mutually beneficial. Conflicts are between the OECD and developing countries over the element of transfer into the WTO both groups must need to agree on a transfer to take place (Paul, 2005).
- The new small WTO members are having very less bargaining power and are marginalized from the world economy. These groups find them self having no strength to bargain for self advantage (Paul, 2005).
- Also the Developing countries which have now got significant power to bargain in negotiations find it hard to complete a deal as it should follow rules and must be cross-sectoral (Paul, 2005).
The steps and proposals which can be taken for successful completion of The Doha Development Round are:-
- 1. Finding solutions to reduce the tension between Sovereignty and Rule Promulgation.
Various standards and codes in the rule promulgation has now become an integral part of the financial system. These rules have been formed in many international organizations like ILO, BIS and IMF (Paul, 2005).
- 2. Providing temporary preferences to the Marginalized Countries and thus bringing success to WTO negotiations.
These small countries have been growing at a very slow or even negative growth with low income levels over a prolonged period. Providing temporary preferences which help both major countries and these marginalized countries in boasting the success of negotiations in the WTO. This will also help these marginalized countries to get better adjusted to the world financial system and in short term will help in successful conclusions of the trade rounds (Paul, 2005).
- 3. Facilitation of bargains between the integrating developing countries and OECD countries.
With facilitating bargains with developing and OECD countries will help these integrating developing countries in a bargain forum. With this huge psychological step from been reactive to be now pro-active especially for these developing countries will now be able to have easy access to OECD countries markets which will be achieved by taking reciprocity actions (Paul, 2005).
4. Expansion in Services. 
With huge potential of expansion in trade, mutual benefits can be achieved enormously. Trade in services which are intra-sectoral will find easy bargaining grounds compare to trade in goods. These bargains will provides the grounds for a grand bargains for the rest of the negotiations and bargains in the WTO rounds.
Deals like lifting of restrictions on outsourcing by OECD countries will give them excess to markets in integrating developing countries. These deals will be mutually benefited for both the groups (Paul, 2005).
- 5. Facilitating intra-developing country liberalization.
Facilitating agreements between developing countries for trades will help these developing countries to grow and develop their markets. This approach will also provide a link with the OECD markets and thus providing market access to intra-developing countries. Associations such as NAFTA which takes care of the north-south regional trade area and also the south regional trade area and REPAs which is formed by the European Union are based on similar concepts.
The promising player in the intra-developing country liberalization are strong players like India, China, Mexico, Brazil and Indonesia which can enhance trade liberations among themselves and than extend this to other countries (Paul , 2005).
- 6. Permitting reduction in trade tariff among developing countries which is applied among developing countries group but not to developed countries group.
Through the establishment of agreed goal by WTO, will help developing countries to get a transfer from OECD countries. Most countries join WTO not to participate in trade negotiations and regulations but to get the benefits of such transfers (Paul, 2005).
- 7. Creation of formal blocs of countries, each block will choose its representative which will be on supervisory WTO Board and will have special veto power enabling them to undertake new roles and functions for mutual benefits (Paul, 2005).
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