MULTILATERAL TRADE NEGOTIATIONS

TOPIC: MULTILATERAL TRADE NEGOTIATIONS

Submitted to: - Submitted by:-

Mr. BISHWANAND DUBEY SHUBHANGI PANDEY

17GSOL101027

17101027

LLB HONS. 5TH SEM

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 MULTILATERAL TRADE NEGOTIATIONS

TABLE OF CONTENTS

ACKNOWLEDGEMENT

1. INTRODUCTION.....................................................................................................1
2. MULTILATERAL TRADE NEGOTIATIONS – NEED AND
IMPORTANCE........................................................................................................3
a. PURPOSE OF TRADE NEGOTIATIONS
3. URUGUAY ROUND OF TRADE
NEGOTIATIONS.......................................................5
a. HISTORY
b. ACHIEVEMENTS
c. CRITICISM
d. IMPLICATION ON DEVELOPING NATIONS

4. DOHA ROUND OF TRADE

NEGOTIATIONS.............................................................9
a. BEFORE DOHA
b. DOHA, 2001
c. CANCUN, 2003
d. GENEVA, 2004
e. PARIS, 2005
f. HONG KONG, 2005
g. GENEVA, 2006
h. GENEVA, 2006
i. ISSUES
i. AGRICULTURE
ii. PATENTED MEDICINES
iii. DIFFERENTIAL TREATMENT
iv. IMPLEMENTATION ISSUES
j. BENEFITS
5. CONCLUSION......................................................................................................16

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BIBLIOGRAPHY

INTRODUCTION

The World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs
and Trade (GATT), have been the pillars of the multilateral trading system for the last half
century. Based on liberal economic theories that assert a connection between open trade and
economic growth, the WTO has sought to promote the liberalization of world trade, has
enforced a set of commonly agreed trade rules and regulations and has served as a forum to
settle international trade disputes. In order to promote the dismantling of trade barriers, the
WTO has relied on successive rounds of multilateral trade negotiations and a set of firm
principles, like the “Most Favored Nation” principle, that outlaw discrimination between
trading partners. This system has allowed all WTO members to benefit from an across-the-
board reduction in trade barriers, has prevented great power competition for market shares,
and has sought to provide less developed countries with a fairer negotiation position.

However, with the seeming failure of the last round of trade negotiations and a move by its
largest members – the European Union and the United States – towards bilateral trade
negotiations, the multilateral trading system seem increasingly challenged. Today’s
multilateral trading system was originally conceived at the 1944 Bretton Woods Conference
as an antidote to the trade protectionism policies that contributed to the Great Depression of
the 1930s. Its first expression was the General Agreement on Tariffs and Trade (GATT),
which was adopted in 1947 by twenty-three founding members. The GATT’s stated aims
were to increase international trade by promoting lower trade barriers and providing a
framework for international trade negotiations. Between 1947 and 1994, the GATT initiated a
total of eight rounds of tariff reductions, leading to a substantial liberalization of world trade.
The last round of trade negotiations – the so- called Uruguay Round, which lasted from 1986-
94 – established the World Trade Organization (WTO), which now consists of 149 member
states and enforces a wide set of rules governing international trade relations. Successive
rounds of multilateral trade negotiations have led to the present trading system that combines
low global tariffs on manufactured goods with considerable tariff barriers on most
agricultural goods and services.

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In the course of the Uruguay Round, GATT member states made a first step to liberalize
trade in non-manufactured goods. This included agreements on trade in agricultural goods,
trade in services, special agreements on textile and clothing and agreements on several non-
tariff impediments to trade, such as trade-related aspects of international property rights
(TRIPS). In addition, a new dispute settlement mechanism was created to govern trade
disputes between WTO member states. For all its successes, the outcome of the Uruguay
Round proved unsatisfactory to many of the less developed countries (LDCs). Many LDCs
had hoped that the Uruguay Round would finally lead to greater tariff concessions on
agricultural products and a reduction of non-tariff barriers. During the Uruguay Round,
however, these countries were too divided amongst themselves to make their demands heard.
As a result, they failed to achieve their bargaining objectives and many primary commodities
and processed materials remained subject to tariff restrictions. The most they were able to
obtain was the promise of a future review of the current arrangements.

Opening a new round of multilateral trade negotiations after the success of the Uruguay
Round did not prove easy. The EU, the US, Japan, and agricultural exporters from the Cairns
Group1 were divided on issues of export subsidies and import restrictions on agricultural
products. The first attempt to open a new round of trade negotiations was made at the
November 1999 WTO Seattle Summit. In the end, the Seattle Summit failed amidst violent
street protests and the reluctance of developing countries to accept a US proposal that would
have made any further trade access conditional on the observation of international labour
standards. The failure of the WTO ministerial conference in Seattle indicated for the first
time a shift in the established balance away from an EU-US dominated trading system. After
Seattle, the divisions between WTO members continued to deepen. Nevertheless, the opening
of a new round of multilateral trade negotiations at Doha in November 2001 was made
possible by two new factors, both sparked by the terrorist attacks of 9/11. First, following the
September 11 attacks, the industrialized countries of the West became increasingly worried
about an emerging nexus of terrorism and underdevelopment, and sought a new
‘development round’ as a panacea. Second, developing countries feared a turn towards
protectionism and hoped that the new geopolitical climate would prove more fortuitous for
negotiations.

1
The Cairns Group is an interest group of 18 agricultural exporting countries, composed of Argentina, Australia
, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand,
Pakistan, Paraguay, the Philippines, South Africa, Thailand, and Uruguay

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MULTILATERAL TRADE NEGOTIATIONS

NEED AND IMPORTANCE

The Multilateral Trade Negotiations (MTNs) were launched under the auspices of the
General Agreement on Tariffs and Trade (GATT) in September 1973 at a ministerial meeting
held in Tokyo, where the well known Tokyo Declaration was adopted, setting out the
objectives and areas of the negotiations. The negotiations aimed at achieving the expansion
and ever greater liberalisation of world trade through the progressive dismantling of obstacles
to trade and the improvement of the international framework for the conduct of world trade.
One of the commitments of the Tokyo Declaration was to secure additional benefit for the
international trade of developing countries so as to achieve a substantial increase in their
foreign exchange earnings, the diversification of their exports, the acceleration of the rate of
growth of their trade, taking into account their development needs, an improvement in the
possibilities for these countries to participate in the expansion of world trade, and a better
balance as between developed and developing countries in the sharing of the advantage
resulting from this expansion. The Tokyo Declaration further embodied a recognition of the
importance of applying special and more favour able treatment to developing countries where
feasible and appropriate. The MTNs constitute a comprehensive and massive undertaking,
cover a multiplicity of extremely complex legal and technical issues, involve a large number
of governments with divergent interests, and have produced several codes, agreements and
exchanges of concessions in tariff and non-tariff fields.

Since the end of the Second World War, successive rounds of multilateral trade negotiations
have succeeded in reducing global tariff barriers and helped to establish the foundations of
today’s interconnected, global economy. Indeed, the rapid growth of trade and prosperity the
world has experienced over the last half century would have been unthinkable without broad
international support for the rules of this system. However, with the collapse of the latest
round of multilateral trade negotiations – the Doha Development Round – in July 2006, and
the turn of both the United States and the European Union towards bilateral rather than
multilateral trading arrangements, the future of the global trading systems appears to be
challenged. This brief will assess the underlying reasons for the collapse of the Doha

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Development Round and speculate on the future impact its collapse might have on the
multilateral trading system

PURPOSE OF TRADE NEGOTIATIONS

Some economists believe that it is difficult to make economic sense of trade negotiations.
Krugman, for example, writes:

“If economists ruled the world, there would be no need for a World Trade Organization. The
economist's case for free trade is essentially a unilateral case - that is, it says that a country
serves its own interests by pursuing free trade regardless of what other countries may do.”

Other economists, however, reject this view. One idea is that trade negotiations help countries
escape a terms-of-trade driven prisoner’s dilemma. Recall that the optimal import tariff of a
large country is positive, since the terms-of-trade gain dominates the deadweight loss for a
sufficiently small tariff. Recall also that one country’s terms-of-trade gain is the other
country’s terms-of-trade loss so that the optimal tariff is a beggar-thy-neighbour policy.
Consider now two symmetric countries and two symmetric industries. Trade flows in one
direction in one of the industries and in the other direction in the other industry.

Both countries have an incentive to impose an optimal tariff in their respective import-
competing industry in order to gain at the other country’s expense. Both countries are worse
off as a result of this since the terms-of-trade gains cancel across industries so that the
optimal tariffs only result in deadweight losses. Both countries could benefit from reciprocal
trade negotiations. This can be stated rigorously in terms of game theory. Imposing an
optimal tariff is a dominant strategy for each country so that both countries do so in the Nash
equilibrium. However, this Nash equilibrium is inefficient so that both countries are trapped
in a prisoner’s dilemma. This inefficiency then creates incentives for cooperative tariff
setting.

Harvard and Princeton economists Elhanan Helpman and Gene Grossman have shown that
this argument is robust to including political economy considerations: the non-cooperative
equilibrium remains inefficient since tariffs entail a terms-of-trade externality. Stanford
economists Kyle Bagwell and Robert Staiger have shown that it is also consistent with the
ATT’s institutional design: the principles of reciprocity and non discrimination help countries
internalize the terms of-trade externality.

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THE URUGUAY ROUND OF TRADE NEGOTIATIONS

The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted

within the framework of the General Agreement on Tariffs and Trade (GATT), spanning
from 1986 to 1994 and embracing 123 countries as ‘contracting parties’. The Round led to
the creation of the World Trade Organization, with GATT remaining as an integral part of the
WTO agreements. The broad mandate of the Round had been to extend GATT trade rules to
areas previously exempted as too difficult to liberalize (agriculture, textiles) and increasingly
important new areas previously not included (trade in services, intellectual
property, investment policy trade distortions)2. The Round came into effect in 1995 with
deadlines ending in 2000 (2004 in the case of developing country contracting parties) under
the administrative direction of the newly created World Trade Organization (WTO).
The Doha Development Round was the next trade round, beginning in 2001 and still
unresolved after missing its official deadline of 2005.

HISTORY

The round was launched in Punta del Este, Uruguay in September 1986, followed by
negotiations in Geneva, Brussels, Washington, D.C., and Tokyo, with the 20 agreements
finally being signed in Marrakesh—the Marrakesh Agreement—in April 1994.

The 1982 Ministerial Declaration identified problems including structural deficiencies, spill-

over impacts of certain countries' policies on world trade GATT could not manage. To
address these issues, the eighth GATT round (known as the Uruguay Round) was launched in
September 1986, in Punta del Este, Uruguay3. It was the biggest negotiating mandate on trade
ever agreed: the talks were going to extend the trading system into several new areas, notably
trade in services and intellectual property, and to reform trade in the sensitive sectors of
agriculture and textiles; all the original GATT articles were up for review4.
2
Cline, William (January 1995). "Evaluating the Uruguay Round". The World Economy 18
3
P. Gallagher, The First Ten Years of the WTO, 4
4
UNDERSTANDING THE WTO: THE DOHA AGENDA". World Trade Organization. Retrieved 8
April 2013

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The round was supposed to end in December 1990, but the US and EU disagreed on how to
reform agricultural trade and decided to extend the talks 5. Finally, In November 1992, the US
and EU settled most of their differences in a deal known informally as "the Blair House
accord", and on April 15, 1994, the deal was signed by ministers from most of the 123
participating governments at a meeting in Marrakesh, Morocco6. The agreement established
the World Trade Organization, which came into being upon its entry into force on January 1,
1995, to replace the GATT system. It is widely regarded as the most profound institutional
reform of the world trading system since the GATT's establishment7.

ACHIEVEMENTS

The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of
the Uruguay Round negotiations (a distinction is made between GATT 1994, the updated
parts of GATT, and GATT 1947, the original agreement which is still the heart of GATT
1994)8. The GATT 1994 is not, however, the only legally binding agreement included in the
Final Act; a long list of about 60 agreements, annexes, decisions and understandings was
adopted. In fact, the agreements fall into a simple structure with six main parts:

a. An umbrella agreement (the Agreement Establishing the WTO);

b. Goods and investment (the Multilateral Agreements on Trade in Goods including the
GATT 1994 and the Trade Related Investment Measures (TRIMS));
c. Services (General Agreement on Trade in Services (GATS));
d. Intellectual property (Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS));
e. Dispute settlement (DSU);
f. Reviews of governments' trade policies (TPRM).

The agreements for the two largest areas under the WTO, goods and services, share a three-
part outline:

5
A. Bredimas, International Economic Law, 16
6
Even after agreement was reached in December 1993, and the Final Act was signed, the effort almost
foundered in the US Congress, and the member states engaged in a quarrel for close to a year about who would
be the first Director General of the WTO (A.F. Lowenfeld, Preface, ix).
7
Kay, Adrian and Ackrill, Robert (2009) Institutional Change in the International Governance of Agriculture: A
Revised Account, Governance 22.3: 483–506
8
P. Gallagher, The First Ten Years of the WTO, 4
* The Uruguay Round, World Trade Organization

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a. Broad principles (such as the General Agreement on Tariffs and Trade and General

Agreement on Trade in Services);
b. Extra agreements and annexes;
c. Lengthy schedules (lists) of commitments made by individual countries.

One of the achievements of the Uruguay round would be the Uruguay Round Agreement on
Agriculture, administered by the WTO, which brings agricultural trade more fully under the
GATT. Prior to the Uruguay Round, conditions for agricultural trade were deteriorating with
increasing use of subsidies, build-up of stocks, declining world prices and escalating costs of
support9. It provides for converting quantitative restrictions to tariffs and for a phased
reduction of tariffs. The agreement also imposes rules and disciplines on agricultural export
subsidies, domestic subsidies, and sanitary and phytosanitary (SPS) measures through
the Agreement on the Application of Sanitary and Phytosanitary Measures

CRITICISM

Groups such as Oxfam have criticized the Uruguay Round for paying insufficient attention to
the special needs of developing countries. One aspect of this criticism is that figures very
close to rich country industries—such as former Cargill executive Dan Amstutz—had a major
role in the drafting of Uruguay Round language on agriculture and other matters. As with the
WTO in general, non-governmental organizations (NGOs) such as Health Gap and Global
Trade Watch also criticize what was negotiated in the Round onintellectual property and
industrial tariffs as setting up too many constraints on policy-making and human needs. An
article asserts that the developing countries’ lack of experience in WTO negotiations and lack
of knowledge of how the developing economies would be affected by what the industrial
countries wanted in the WTO new areas; the intensified mercantilist attitude of the
GATT/WTO’s major power, the US.; the structure of the WTO that made the GATT tradition
of decision by consensus ineffective, so that a country would not preserve the status quo,
were the reasons for this imbalance10.

9
Tanner, Carolyn (April 1996). "AGRICULTURAL TRADE LIBERALISATION AND THE URUGUAY
ROUND". Australian Journal of Agricultural and Resource Economics 40 (1): 1. doi:10.1111/j.1467-
8489.1996.tb00726.x. Retrieved 8 April 2013.
10
Finger, J. Michae; Julio J. Nogués (March 2002). "The Unbalanced Uruguay Round Outcome: The New
Areas in Future WTO Negotiations". The World Economy 25 (3): 321. doi:10.1111/1467-9701.00435.
Retrieved 8 April 2013.

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 MULTILATERAL TRADE NEGOTIATIONS

IMPLICATIONS ON DEVELOPING COUNTRIES

The Uruguay Round that preceded the present Doha Round was the eighth round of the trade
negotiations. This was one of the longest rounds of trade talks so far in the history of trading
regime. It was even suggested that this round would end all the rounds by bringing in even all
the original GATT articles to review. The Uruguay Round began in 1 986 at Punta del Este,
Uruguay, and ended in 1 994 at Marrakesh. Besides the traditional issues, this round for the
first time took up new issues- Services, TRIPS and TRIMS- for negotiations. Also, this round
witnessed one of the most comprehensive discussions on many important issues, which had
dogged the world community for quite long time - textiles and agriculture. These two issues
have been eluding the international community for quite long time due to various reasons;
and specifically because of the apathetic attitude of the developed countries. While
agriculture was dogged by protectionist measures, textiles trade was conducted under peculiar
arrangement called Multi Fibre Agreement, which was in contravention of the GATT
principle. In any case, a whole of series of these items came on the board for phasing out the
distortions in trade. Still important, this round gave the final legal sanction for the creation of
the World Trade Organization replacing the ad hoc body, GATT.

One important dimension of this round was that for the first time the developing countries
projected their position with more of aggression than in the previous rounds. The three
important actors like the U.S., EEC and Japan were no way calling the shots all the while, as
the developing countries worked in compact with respect to various issues. As Denton and
Laite suggested, " The way various groups, such as the Cairns Group11, and the Group of
Ten12, were forcing their perspectives into the negotiating process suggested that the
developing countries have graduated themselves from the status of bystanders to activists in
the trading regime. As this author mentioned elsewhere, "Specifically, at the agenda-setting
and rule-making stage, developing countries have played a very notable role in the Uruguay
Round of negotiations.13"

11
Cairns Group is a coalition of fourteen agricultural exporting countries from both developed and developing
countries. It consists of Argentina, Australia, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia,
Malaysia, New Zealand, the Philippines, Thailand, and Uruguay.
12
The Group of Ten was originally identified as "hard liner" countries. Argentina, Brazil, Cuba, Egypt, India,
Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia. However, Argentina withdrew from the group as
negotiations progressed; while Yugoslavia was facing a bloody civil war.
13
dia and the GATT, op. cit. P.1 16.

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DOHA ROUND OF TRADE NEGOTIATIONS

The Doha Development Round or Doha Development Agenda (DDA) is the latest trade-

negotiation round of the World Trade Organization (WTO) which commenced in November
2001 under then director-general Mike Moore. Its objective was to lower trade
barriers around the world, and thus facilitate increased global trade.

Progress in negotiations stalled after the breakdown of the July 2008 negotiations over

disagreements concerning agriculture, industrial tariffs and non-tariff barriers, services, and
trade remedies14. The most significant differences are between developed nations led by the
European Union (EU), the United States (USA), and Japan and the major developing
countries led and represented mainly by India, Brazil, China, and South Africa. There is also
considerable contention against and between the EU and the USA over their maintenance
of agricultural subsidies—seen to operate effectively as trade barriers15. Since the breakdown
of negotiations in 2008, there have been repeated attempts to revive the talks, so far without
success. Intense negotiations, mostly between the USA, China, and India, were held at the
end of 2008 seeking agreement on negotiation modalities, an impasse which was not
resolved. In April 2011, then director-general Pascal Lamy "asked members to think hard
about 'the consequences of throwing away ten years of solid multilateral work'." A report to
the WTO General Council by Lamy in May 2012 advocated "small steps, gradually moving
forward the parts of the Doha Round which were mature, and re-thinking those where greater
differences remained." Adoption of the Bali Ministerial Declaration on 7 December 2013 for
the first time successfully addressed bureaucratic barriers to commerce—a small part of the
Doha Round agenda. However, as of January 2014, the future of the Doha Round remains
uncertain.

BEFORE DOHA

Before the Doha ministerial, negotiations had already been under way on trade in agriculture
and trade in services. These ongoing negotiations had been required under the last round
of multilateral trade negotiations (the Uruguay Round, 1986–1994). However, some
14
Fergusson ps, Ian F. (18 January 2008). "World Trade Organization Negotiations: The Doha Development
Agenda" (PDF). Congressional Research Service. Retrieved 26 July 2008.
15
Hanrahan, Charles; Randy Schnepf (22 January 2007). "WTO Doha Round: The Agricultural
Negotiations" (PDF). Congressional Research Service. Retrieved 20 July2008.

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countries, including the United States, wanted to expand the agriculture and services talks to
allow trade-offs and thus achieve greater trade liberalization.

The first WTO ministerial conference, which was held in Singapore in 1996, established
permanent working groups on four issues: transparency in government procurement,trade
facilitation (customs issues), trade and investment, and trade and competition. These became
known as the Singapore issues. These issues were pushed at successive ministerials by the
European Union, Japan and Korea, and opposed by most developing countries. Since no
agreement was reached, the developed nations pushed that any new trade negotiations must
include the mentioned issues.

The negotiations were intended to start at the ministerial conference of 1999 in Seattle, USA,

and be called the Millennium Round but, due to several different events including protest
activity outside the conference (the so-called "Battle of Seattle"), the negotiations were never
started. Due to the failure of the Millennium Round, it was decided that negotiations would
not start again until the next ministerial conference in 2001 in Doha, Qatar.

DOHA, 2001

The Doha round officially began in November 2001, committing all countries to negotiations
opening agricultural and manufacturing markets, as well as trade-in-services (GATS)
negotiations and expanded intellectual property regulation (TRIPS). The intent of the round,
according to its proponents, was to make trade rules fairer for developing
countries. However, by 2008, critics were charging that the round would expand a system of
trade rules that were bad for development and interfered excessively with countries' domestic
"policy space"16.

CANCÚN, 2003

The Cancún ministerial collapsed for several reasons. First, differences over the Singapore
issues seemed incapable of resolution. The EU had retreated on some of its demands, but
several developing countries refused any consideration of these issues at all. Second, it was
questioned whether some countries had come to Cancún with a serious intention to negotiate.
In the view of some observers, a few countries showed no flexibility in their positions and
only repeated their demands rather than talk about trade-offs. Third, the wide difference

Statement By Civil Society Organisations on the WTO Negotiating Situation, and on Food And Financial
16

Crises Accra, 2008

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between developing and developed countries across virtually all topics was a major obstacle.
The U.S.-EU agricultural proposal and that of the G20 developing nations, for example, show
strikingly different approaches to special and differential treatment. Fourth, there was some
criticism of procedure. Some claimed the agenda was too complicated. Also, Cancún
ministerial chairman, Mexico’s Foreign Minister Luis Ernesto Derbez, was faulted for ending
the meeting when he did, instead of trying to move the talks into areas where some progress
could have been made.

The collapse seemed like a victory for the developing countries 17. The failure to advance the
round resulted in a serious loss of momentum and brought into question whether the 1
January 2005 deadline would be met. The North-South divide was most prominent on issues
of agriculture. Developed countries’ farm subsidies (both the EU’s Common Agricultural
Policy and the U.S. government agro-subsidies) became a major sticking point. The
developing countries were seen as finally having the confidence to reject a deal that they
viewed as unfavorable. This is reflected by the new trade bloc of developing and
industrialized nations: the G20. Since its creation, the G20 has had fluctuating membership,
but is spearheaded by the G4 (the People's Republic of China, India, Brazil, and South
Africa). While the G20 presumes to negotiate on behalf of all of the developing world, many
of the poorest nations continue to have little influence over the emerging WTO proposals.

GENEVA, 2004

The negotiators in Geneva were able to concentrate on moving forward with the Doha
Round. After intense negotiations in late July 2004, WTO members reached what has become
known as the Framework Agreement (sometimes called the July Package), which provides
broad guidelines for completing the Doha round negotiations. The agreement contains a 4-
page declaration, with four annexes (A-D) covering agriculture, non-agricultural market
access, services, and trade facilitation, respectively. In addition, the agreement acknowledges
the activities of other negotiating groups (such as those on rules, dispute settlement, and
intellectual property) and exhorts them to fulfill their Doha round negotiating objectives. The
agreement also abandoned the 1 January 2005 deadline for the negotiations and set December
2005 as the date for the 6th ministerial to be held in Hong Kong.

17
"The Cancún challenge". The Economist. 4 September 2003. Retrieved 3 August 2008.

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PARIS, 2005

Trade negotiators wanted to make tangible progress before the December 2005 WTO meeting
in Hong Kong, and held a session of negotiations in Paris in May 2005. Paris talks were
hanging over a few issues: France protested moves to cut subsidies to farmers, while the U.S.,
Australia, the EU, Brazil and India failed to agree on issues relating to chicken, beef and
rice. Most of the sticking points were small technical issues, making trade negotiators fear
that agreement on large politically risky issues will be substantially harder.

HONG KONG, 2005

The Hong Kong Convention Center, which was the site of the Sixth WTO Ministerial
Conference. The Sixth WTO Ministerial Conference took place in Hong Kong, 13 to 18
December 2005. Although a flurry of negotiations took place in the fall of 2005, WTO
director-general Pascal Lamy announced in November 2005 that a comprehensive agreement
on modalities would not be forthcoming in Hong Kong, and that the talks would “take stock”
of the negotiations and would try to reach agreements in negotiating sectors where
convergence was reported.

Trade ministers representing most of the world's governments reached a deal that sets a
deadline for eliminating subsidies of agricultural exports by 2013. The final declaration from
the talks, which resolved several issues that have stood in the way of a global trade
agreement, also requires industrialized countries to open their markets to goods from the
world's poorest nations, a goal of the United Nations for many years. The declaration gave
fresh impetus for negotiators to try to finish a comprehensive set of global free trade rules by
the end of 2006. Director-general Pascal Lamy said, "I now believe it is possible, which I did
not a month ago."

GENEVA, 2006

The July 2006 talks in Geneva failed to reach an agreement about reducing farming subsidies
and lowering import taxes, and negotiations took months to resume. A successful outcome of
the Doha round became increasingly unlikely, because the broad trade authority granted
under the Trade Act of 2002 to U.S. president George W. Bush was due to expire in 2007.
Any trade pact would then have to be approved by the U.S. Congress with the possibility of
amendments, which would hinder the U.S. negotiators and decrease the willingness of other

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countries to participate. Hong Kong offered to mediate the collapsed trade liberalisation talks.
Director-general of Trade and Industry, Raymond Young, says the territory, which hosted the
last round of Doha negotiations, has a "moral high-ground" on free trade that allows it to play
the role of "honest broker".

GENEVA, 2008

On 21 July 2008, negotiations started again at the WTO's HQ in Geneva on the Doha round
but stalled after nine days of negotiations over the refusal to compromise over the special
safeguard mechanism. "Developing country members receive special and differential
treatment with respect to other members' safeguard measures, in the form of a de
minimis import volume exemption. As users of safeguards, developing country members
receive special and differential treatment with respect to applying their own such measures,
with regard to permitted duration of extensions, and with respect to re-application of
measures.

The negotiations collapsed on 29 July over issues of agricultural trade between the United
States, India, and China18. In particular, there was insoluble disagreement between India and
the United States over the special safeguard mechanism (SSM), a measure designed to protect
poor farmers by allowing countries to impose a special tariff on certain agricultural goods in
the event of an import surge or price fall19.

ISSUES

Agriculture has become the lynchpin of the agenda for both developing and developed
countries. Three other issues have been important. The first, now resolved, pertained to
compulsory licensing of medicines and patent protection. A second deals with a review of
provisions giving special and differential treatment to developing countries; a third addresses
problems that developing countries are having in implementing current trade obligations.

a. AGRICULTURE

Agriculture has become the most important and controversial issue. Agriculture is
particularly important for developing countries, because around 75% of the population in
developing countries live in rural areas, and the vast majority are dependent on agriculture for

18
Dickson, David M. (30 July 2008). "Farm tariffs sink world trade talks". Washington Times.
19
Alan, Beattie; Frances William (29 July 2008). "Doha trade talks collapse".Financial Times. 

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their livelihoods. The first proposal in Qatar, in 2001, called for the end agreement to commit
to substantial improvements in market access; reductions (and ultimate elimination) of all
forms of export subsidies; and substantial reductions in trade-distorting support.”

b. ACCESS TO PATENTED MEDICINES

A major topic at the Doha ministerial regarded the WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS). The issue involves the balance of interests
between the pharmaceutical companies in developed countries that held patents on medicines
and the public health needs in developing countries. Another issue concerns the protection of
traditional medecinal knowledge and practices. Before the Doha meeting, the United States
claimed that the current language in TRIPS was flexible enough to address public health
emergencies, but other countries insisted on new language.

c. SPECIAL AND DIFFERENTIAL TREATMENT

In the Doha Ministerial Declaration, the trade ministers reaffirmed special and differential
(S&D) treatment for developing countries and agreed that all S&D treatment provisions “...be
reviewed with a view to strengthening them and making them more precise, effective and
operational.”

d. IMPLEMENTATION ISSUES

Developing countries claim that they have had problems with the implementation of the
agreements reached in the earlier Uruguay Round because of limited capacity or lack of
technical assistance. They also claim that they have not realized certain benefits that they
expected from the Round, such as increased access for their textiles and apparel in
developed-country markets. They seek a clarification of language relating to their interests in
existing agreements. Before the Doha ministerial, WTO members resolved a small number of
these implementation issues. At the Doha meeting, the Ministerial Declaration directed a two-
path approach for the large number of remaining issues:

a. where a specific negotiating mandate is provided, the relevant implementation

issues will be addressed under that mandate; and
b. the other outstanding implementation issues will be addressed as a matter of
priority by the relevant WTO bodies.

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Outstanding implementation issues are found in the area of market access, investment
measures, safeguards, rules of origin, and subsidies and countervailing measures, among
others.

BENEFITS

Most countries participating in the negotiations believe that there is some economic benefit in
adopting the agreement; however, there is considerable disagreement of how much benefit
the agreement would actually produce. A study by the University of Michigan found that if
all trade barriers in agriculture, services, and manufactures were reduced by 33% as a result
of the Doha Development Agenda, there would be an increase in global welfare of
$574.0 billion. A 2008 study by World Bank Lead Economist Kym Anderson found that
global income could increase by more than $3000 billion per year, $2500 billion of which
would go to the developing world20. Others had been predicting more modest outcomes, e.g.
world net welfare gains ranging from $84 billion to $287 billion by the year 2015. Pascal
Lamy has conservatively estimated that the deal will bring an increase of $130 billion.

Several think tanks and public organizations assess that the conclusion of the trade round will
result in a net gain . However, the restructuring and adjustment costs required to prevent the
collapse of local industries, particularly in developing countries, is a global concern. For
example, a late 2009 study by the Carnegie Endowment for International Peace, the United
Nations Economic Commission for Africa (UNECA), the United Nations Development
Programme and the Kenyan Institute for Research and Policy Analysis found that Kenya
would see gains in its exports of flowers, tea, coffee and oil seeds. It would concurrently lose
in the tobacco and grains markets, as well as manufacturing of textiles and footwear,
machinery and equipment.

20
World trade contracted 12 percent in 2009: WTO's Lamy". Reuters

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CONCLUSION

The Multilateral Trade Negotiations (MTNs) were launched under the auspices of the
General Agreement on Tariffs and Trade (GATT) in September 1973 at a ministerial meeting
held in Tokyo, where the well known Tokyo Declaration was adopted, setting out the
objectives and areas of the negotiations. The negotiations aimed at achieving the expansion
and ever greater liberalisation of world trade through the progressive dismantling of obstacles
to trade and the improvement of the international framework for the conduct of world trade.
One of the commitments of the Tokyo Declaration was to secure additional benefit for the
international trade of developing countries so as to achieve a substantial increase in their
foreign exchange earnings, the diversification of their exports, the acceleration of the rate of
growth of their trade, taking into account their development needs, an improvement in the
possibilities for these countries to participate in the expansion of world trade, and a better
balance as between developed and developing countries in the sharing of the advantage
resulting from this expansion. The Tokyo Declaration further embodied a recognition of the
importance of applying special and more favour able treatment to developing countries where
feasible and appropriate. The MTNs constitute a comprehensive and massive undertaking,
cover a multiplicity of extremely complex legal and technical issues, involve a large number
of governments with divergent interests, and have produced several codes, agreements and
exchanges of concessions in tariff and non-tariff fields.

The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted

within the framework of the General Agreement on Tariffs and Trade (GATT), spanning
from 1986 to 1994 and embracing 123 countries as ‘contracting parties’. The Round led to
the creation of the World Trade Organization, with GATT remaining as an integral part of the
WTO agreements. The broad mandate of the Round had been to extend GATT trade rules to
areas previously exempted as too difficult to liberalize (agriculture, textiles) and increasingly
important new areas previously not included (trade in services, intellectual
property, investment policy trade distortions). The Round came into effect in 1995 with
deadlines ending in 2000 (2004 in the case of developing country contracting parties) under
the administrative direction of the newly created World Trade Organization (WTO).
The Doha Development Round was the next trade round, beginning in 2001 and still

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unresolved after missing its official deadline of 2005. The Doha Development

Round or Doha Development Agenda (DDA) is the latest trade-negotiation round of
the World Trade Organization (WTO) which commenced in November 2001 under then
director-general Mike Moore. Its objective was to lower trade barriers around the world, and
thus facilitate increased global trade. Progress in negotiations stalled after the breakdown of
the July 2008.

The discussion on the topic ‘Multilateral Trade Negotiations’ drive home the point that the
multilateral trading system has come a long way. It has been evolving and keeping pace with
the changing needs of the time. Especially, the efforts of the developing countries to make it
broad- based and effective to cater to their needs seem to be gaining ground. There is no
doubt that in none of the rounds the developing country has upper hand in setting up the
rules. The developing country perspectives that have been evolving over the years, however,
seem to have its impact since the beginning. The rich countries may have gained out of the
multilateral system. The real gain for them has been even beyond this structure that has been
there since the Bretton Woods days. In fact, it is for the developing countries that are now
integrating their economies with the global economy, an effective trading regime is highly
important. It is another matter if some countries extract concessions from the rich countries
through bilateral arrangements. A multilateral trading regime, however, is an essential
element in the present multi-polar economic system. The Doha Round may have started with
a bang, with a lot of promise for the developing countries by adopting it as "Development
Round." Although since the beginning some developing countries have been exerting the
world body to incorporate the development dimension as one of the objectives of the trading
system. There were many half-hearted attempts to do so. This time, however, with the
increasing force of globalisation and liberalisation of almost all developing countries the
Doha Round seemed to be befittingly adopting development as the key element. The progress
of the talks, however, seems to move in the direction that is beyond the original mandate.
This supervenes the earlier positions of the contracting parties of the WTO. The outcome
does not seem to be too well for the developing countries.

As one study suggested,

"The round began with vows to enable poorer nations to develop their economies. The deal
taking shape now offers limited economic gains for the developing world, and many
countries end up worse off, according to recent economic projections. Hidden behind those

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modest benefits are costs that should give negotiations pause. Tariff losses and other
"adjustment costs" may be prohibitively high, some countries will experience a loss in
national production after opening their manufacturing and service sectors to rich-country
competition, and all face the loss of autonomy to pursue the kind of national development
policies that have proven effective in the past. "

The crux of the matter is that development as such has been undergoing a paradigm shift. The
development dimension has been changing. Now international trade has been accepted as an
engine of growth. There is also shift from assets based on commodity to assets based on
knowledge. With globalisation and liberalisation, the developing countries have been
adopting newer strategies for economic development. The earlier inward oriented strategy for
economic development has been bidden good-bye. Now the developing countries have been
keen to do international trade. There is decisive shift in the focus in the macro economic
policies. The new economic policies may be too daunting; but there is no other go but to
integrate with the world economy, which in other words, means to be part of the multilateral
trading arrangement. The initial costs may be higher. In the long run, these economies will
cope up with the loss and hopefully develop keeping pace with developments in the world
economy. In this context, the Doha Round is a pointer in the direction.

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REFERENCES
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Policies', to be published in Meinhard Hilf and Ernst-Ulrich Petersmann (ed): The
New GATT Round of Multilateral Trade Negotiations: Legal and Economic Aspects.
Kluwer, Deventer.
2. Chishti, Sumitra [1985]: 'World Economic Environment, Developing Countries and
the New Round of Multilateral Trade Negotiatioins', Foreign Trade Review, 20(3),
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Brian Brogan (ed): The Asia- Pacific Region in the Uruguay Round, Cambridge
University Press, Sydney. [1988a]: 'Foreign Direct Investment in India
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