The green barrier to free trade
C. P. Chandrasekhar
As the March 31 deadline for completing the "modalities" stage of the proposed new round of negotiations on global agricultural trade nears, hopes of an agreement are increasingly waning. In this edition of Macro scan, C. P. Chandrasekhar and Jayati Ghosh examine the factors and the players constraining the realization of such an agreement.
AT THE END of the latest round of meetings of the agricultural negotiations committee of the WTO, the optimism that negotiators would meet the March 31 deadline for working out numerical targets, formulas and other "modalities" through which countries can frame their liberalization commitments in a new full-fledged round of trade negotiations has almost disappeared. That target was important for two reasons.
First, it is now becoming clear, that even more than was true during the Uruguay Round, forging an agreement in the agricultural area is bound to prove extremely difficult. Progress in the agricultural negotiations was the key to persuading the unconvinced that a new `Doha Round' of trade negotiations is useful and feasible.
Second, the Doha declaration made agricultural negotiations one part of a `single undertaking' to be completed by January 1, 2005. That is, in a take `all-or-nothing' scheme, countries had to arrive at, and be bound by, agreements in all areas in which negotiations were to be initiated in the new round. This means that if agreement is not worked out with regard to agriculture, there would be no change in the multilateral trade regime governing industry, services or related areas and no progress in new areas, such as competition policy, foreign investment and public procurement, all of which are crucial to the economic agenda of the developed countries.
The factors making agriculture the sticking point on this occasion are numerous. As in the last Round, there is little agreement among the developed countries themselves on the appropriate shape of the global agricultural trade regime.
There are substantial differences in the agenda of the US, the EU and the developed countries within the Cairns group of agricultural exporters. When the rich and the powerful disagree, a global consensus is not easy to come by.
But that is not all. Even if an agreement is stitched up between the rich nations, through maneuvers such as the Blair House accord, getting the rest of the world to go along would be more difficult this time.