Having killed a consensus-based process, the US will seek to assert itself in the twilight of its ascendancy
In the twilight language of international negotiations, a declaration of “success" at the end of a ministerial summit sometimes means just that and sometimes means exactly the opposite. The game gets really pro when important concepts, agreements and mechanisms are couched in three-letter acronyms or abbreviations, which only a few specialist negotiators and area experts understand—even there, one is sometimes doubtful—and which serve usefully to obfuscate, fudge or otherwise bamboozle the public, the pundits and (one fears) sometimes the politicians themselves who sign on the dotted line.
As for the 10th Ministerial Conference of the World Trade Organization (WTO), which just concluded in Nairobi over the weekend, the fog of spin and counter-spin is already so thick that even a digitally enhanced Star Wars lightsaber has little hope of penetrating it.
Scan the news headlines under a Google search, and you will read soothing headlines such as that “modest success" was achieved; that the final ministerial declaration vindicated the position of advanced economies such as the US; that it vindicated the position of emerging economies such as India; and that the event was an utter failure.
What’s the truth?
Cutting through the fog as he usually does, the sharpest and most succinct analysis of what actually went down came from Shawn Donnan of the Financial Times. In his final bulletin from Nairobi, he wrote: “Trade ministers from around the world have put what may be the final nail in the coffin of the long-stalled Doha round of negotiations, clearing the way for the World Trade Organization to start focusing on smaller agreements with a better chance of success." Boom.
The most important decision, or non-decision—in this world of Orwellian doublespeak one is never quite sure what to call it—was the failure of the final ministerial declaration to “reaffirm" a commitment to the Doha Development Agenda (DDA), which was affirmed at the end of the Doha Ministerial Conference of the WTO as far back as November 2001, when smoke was, as it were, still rising from the embers of the World Trade Center in New York.
The actual language agreed upon, as reported in this newspaper, reads, in part, that the signatories “recognize that many Members reaffirm the DDA, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other members do not reaffirm the Doha mandates, as they believe any approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organization."
In other words, the consensus—recall that the WTO operates on this principle, not on majority rule—was that no consensus was possible. But, given that the DDA has been reaffirmed at every ministerial conference since it was launched in 2001, what this means, in reality, is that the DDA is dead. (Of course, like Mary Shelley’s monster, it may yet be reborn, in an ever more gruesome form, but I’m betting it’s now finally dead.)
India’s commerce and industry minister, Nirmala Sitharaman, was forthright in expressing her disappointment at the outcome, tweeting: “Utterly disappointed a unanimous reaffirmation of DDA hasn’t happened." Quite; we all should be.
Also, be forewarned: In the coming days, you will read opinion pieces by learned trade experts, lodged in universities and think tanks in the US, and those shilling for the US from various perches in the emerging economies, including India, that India, and a few other recalcitrant holdouts, played spoiler and prevented the achievement of a fulsome agreement, thus forcing the hand of the US and other advanced economies to, in effect, pick up their marbles and play elsewhere, notably in mega-agreements such as the Trans-Pacific Partnership (TPP) and other preferential trade agreements that are on the anvil.
You will also read that India was at fault in holding out to protect our Public Distribution System (PDS) and that we would be better served in moving towards a more market-friendly system of agricultural pricing and distribution. But I bet you will likely not read, for example, that restauranteurs in Vancouver, Canada, routinely drive across the border to the US state of Washington and illegally bring back truckloads of milk and other dairy products—even with the Canadian dollar worth a paltry 70 US cents—because, even with the risk of detection, fines and confiscation, this is a better bet than paying the grossly inflated prices inflicted by the Canadian “supply management" system. The reason, of course, is that market-distorting policies are kosher in rich countries but not poor ones.
With the DDA now buried, you can bet your bottom dollar (even an undervalued Canadian one) that the rhetorical and diplomatic pressure on India to fold our hand on a range of non-trade related “beyond the border" issues will only intensify.
Having killed a development-oriented, genuinely multilateral, consensus-based process, a weakening but still powerful hegemon, the US, will seek to assert itself in the twilight of its ascendancy.
Every fortnight, In the Margins explores the intersection of economics, politics and public policy to help cast light on current affairs.