The Doha round of trade talks is in serious trouble

This week's flurry of talks in London and Geneva marks a belated recognition that the Doha round of trade talks is in serious trouble. With little over a month to go before the Hong Kong summit, negotiators remain deadlocked on agriculture and have barely begun serious negotiations on other fronts.

This must change quickly if there is to be any prospect of Hong Kong acting as a springboard to a deal next year before the expiry of "fast-track" US trade negotiation authority. Now is the time for those committed to Doha to put all hands to the pump.
Until now, negotiators from other countries, particularly in the developing world, have refused to move until the European Union improves its inadequate offer on agriculture. This offer, even as revised, is not compatible with a trade agreement of any ambition.

Sooner or later Peter Mandelson, the EU trade commissioner, will have to come back with a better proposal, with bigger tariff cuts across the board and far fewer exemptions for sensitive products, or stand accused of killing Doha.

Yet it is also true that others, particularly in the developing world, have been only too willing to hide behind the EU. These countries now need to show Europe, and the world, what we all stand to lose if the round fails or shrinks into insignificance.

The big emerging market countries should put on the table aggressive offers of liberalisation in industrial tariffs and services, conditional on further substantial concessions in agriculture.
This would help galvanise pro-free trade forces within the EU and allow its negotiators to make trade-offs across a broad set of objectives. Japan has already signalled welcome willingness to reconsider its position in agriculture if there is real progress elsewhere. The EU may still fail to deliver. But at least it would be obvious who was to blame.

The furore over agriculture has distracted attention from the fact that talks have barely moved on other issues. Industrial tariff cut offers are desultory, while so little progress has been made on services that the only way to move forward may be to change the negotiating framework.

Even with the best efforts, this catch-up process will not be complete by the December Hong Kong summit. Pascal Lamy, director-general of the World Trade Organisation, must know that there is no chance of achieving his goal of being two-thirds of the way to a full Doha deal by the end of that meeting.

It is vital not to be either too hasty or too cautious: racing ahead too swiftly risks provoking a Cancún-style debacle while unduly scaling back the ambitions of the overall round to secure clear progress in Hong Kong would sacrifice the long-term for the short. Negotiators should focus on agreeing frameworks and basic formulae for the final stage next year.
There is too much at stake to allow Doha to fail. An ambitious trade deal would underpin global growth and open new opportunities for developing countries to trade out of poverty.
Failure to complete Doha would not only surrender these gains, it would risk jeopardising the achievements of previous rounds, as countries turned to bilateral deals, creating a chaos of preferential tariffs and rules of origin.

What is needed above all is a strong political commitment to see the round succeed. But business should speak out too. This week's letter to the Financial Times by 62 senior executives should be only the start of a sustained effort to make the public case for Doha.