China is being urged to exert its efforts to get the stalled Doha Round of trade negotiations moving again
　　“We hope the developed WTO member countries will make substantial contributions in order to resume the talks as soon as possible.”---Chinese Commerce Minister Bo Xilai The Doha Round of global trade talks was suspended in July, but that is not the end of the story. While there have been a lot of fingers pointing over the causes of the breakdown, debates on different aspects of the World Trade Organization (WTO) talks have gained force.
　　At the same time, a flurry of diplomacy has taken place for the resumption of the Doha Round. Bilateral talks on this subject have been held around the globe. Multilateral meetings of stakeholders have occurred in Brazil and Singapore, and relevant nations are scheduled to meet again in Geneva soon.
　　Amid these efforts, the possibility of a resumption of the stalled talks is growing.
　　The Doha Round of negotiations is like a boat. It is stranded on the beach. But it is sure to set sail,” said Zhou Shijian, the Standing Councilor of the China Society for World Trade Organization Studies.His comments were echoed by Brazil’s Foreign Minister, Celso Amorim, on September 10 in Rio de Janeiro, when he said the Doha Round is like a patient who has been released from the intensive care unit but is still confined in the hospital for a while.
　　“The WTO and its members need a solid Doha outcome to remain an effective force in the global trading system.” ---U.S. Trade Representative Susan Schwab The Doha Round of trade talks, which began in 2001, was named after the Qatari capital where the talks were launched. With an avowed aim to lift millions out of poverty through fairer trading conditions, the round has been billed as the “development round” of WTO talks, as well as a once-in-a-generation chance to boost global economic growth.
　　However, on July 27, WTO Director General Pascal Lamy declared a halt to the five-year-old talks after the parties failed to achieve substantial progress. Lamy said he would consider resuming the talks after all participants showed sufficient sincerity.On September 9-10, international trade officials from the Group of 20 (G-20) developing nations met in Rio de Janeiro for the first time since the Doha Round was suspended, with the aim of developing a unified position.
　　What happened in July was “a serious accident,” said Lamy at a press conference at the close of the G-20 meeting, but “we have been able to move ahead in Rio de Janeiro.” He said all the parties at the Rio meeting agreed that negotiations should resume.“By mid-March of next year we have to get to know if there is a deal in the making or not,” Lamy said, though a definite date for formal negotiations was not set at the meeting.
　　Why Doha failed
　　“The Doha talks will be revived by the end of the year and last for one or two years, or even more,” Zhou predicted in an interview with Beijing Review. “Anyway, the [previous] Uruguay Round took seven years.”
　　Jeffrey J. Schott, Senior Fellow at the Institute for International Economics in Washington, D.C., explained the reason why the Doha Round failed. “Disagreements over agricultural reforms―in particular, how much the United States and the European Union (EU) should cut subsidies and tariffs protecting their farmers―have been a major cause of the impasse in the Doha Round,” he told Beijing Review.
　　“By mid-March of next year we have to know if there is a deal [on the Doha Round] in the making or not.”---WTO Director General Pascal Lamy Chinese experts on the WTO tend to attribute the collapse of the Doha Round to developed countries’ neglecting the interests of developing countries. “The developed world and the developing world failed to agree with each other, while in the developed world, different countries cannot reach a consensus,” said Zhou.
　　“For example, the EU just cannot compete with the United States in terms of cutting government subsidies.”That may partly explain why EU Trade Commissioner Peter Mandelson once had scathing criticism of the United States. “The United States has been asking too much from others in exchange for doing too little themselves,” he said in July. He said Washington was responsible for the failure of the WTO talks and warned of negative consequences in global trade, particularly for poor nations. But there are other views. Daniel Esty, Director of the Yale World Fellows Program, said the biggest obstacle to a successful conclusion of the Doha Round is the EU’s intransigence in reducing its trade-disruptive agricultural subsidies, which blocks access to the European market for many developing nations with potential agricultural export sectors.“The slow pace at which the EU is proposing to reduce these subsidies, which amount to tens of billions of euros each year, is the major stumbling block to progress. And within Europe, the finger of blame must be pointed directly at France for its refusal to make adequate concessions on farm subsidies.”Esty also criticized several Asian nations. “Japan and South Korea are also part of the foot-dragging group.”
　　“The developing countries were angry, as the developed ones always carry out a ‘double standard’ in world trade,” said Zhou. “Industrialized countries, which dominated the trade talks, are very selective about which sectors should be pro-free-trade. For products they are not good at [manufacturing], for example, textiles, they impose not only tariffs, but also quotas. For IT products, in which they have a competitive edge, there is no tariff at all.”
　　Getting the talks restarted “A failure of Doha would strengthen those who want to turn their backs on globalization and retreat into protectionism.”---EU Trade Commissioner Peter Mandelson Zhou said that mentality is not good for world trade. “The United States and the EU are both trade giants. If the Doha Round collapses eventually, where will the WTO head? Without the WTO, the globalization of the economy cannot be achieved,” he said.
　　On the relationship between the Doha talks and world trade, Morgan Stanley Chief Economist Stephen Roach has a different viewpoint. In his article titled “Doha Doesn’t Matter,” Roach writes that the Doha Round was “a sideshow to the main event in the global economy” from the very beginning.
　　“A successful completion of the Doha Round of trade liberalization would have been nice. But the benefits would have been fleeting, at best. There are much bigger fish to fry in an increasingly contentious era of globalization,” he said.However, Roach’s comment does not seem to be in the mainstream. As the third quarter of the year comes to a close, more voices are heard appealing for the resumption of the WTO negotiations, and stressing the importance of the Doha Round to the establishment of a stable and open global economic system.
　　“We are fired up as a group in wanting both a conclusion to the trade round and a successful outcome.”---British Chancellor of the Exchequer Gordon Brown “A failure of Doha would strengthen those who want to turn their backs on globalization and retreat into protectionism. It would undermine the WTO system, which has brought stability and predictability to the global economy,” Mandelson said.In Rio de Janeiro, U.S. Trade Representative Susan Schwab said the United States “is committed to finding a successful outcome for this round if there is one to be found.”
　　“The WTO and its members need a solid Doha outcome to remain an effective force in the global trading system,” she said.But it requires extra efforts on the part of developed and developing countries alike, she said, cautioning that expecting immediate results was not realistic.Mandelson said high-level talks to jumpstart the Doha Round could be possible at the end of this year or early next year.International Monetary Fund (IMF) Managing Director Rodrigo Rato and World Bank President Paul Wolfowitz, speaking at the annual meeting of the two international organizations in Singapore on September 19, said all countries should seize the opportunity and re-energize the Doha talks.Who will take the first step?
　　“There are much bigger fish [than the Doha Round] to fry in an increasingly contentious era of globalization.”---Morgan Stanley Chief Economist Stephen Roach Other finance officials expressed their optimism that a swift conclusion to the Doha Round talks could be reached soon.
　　Gordon Brown, British Chancellor of the Exchequer, gave the most positive statement, saying, “The aid-for-trade announcement, the determination of America, the statements made by European ministers, the communique that says we want a successful outcome by the end of the year show that we are fired up as a group in wanting both a conclusion to the trade round and a successful outcome, and I believe that is sending a message right across the world.”Despite the optimistic talk, the problem remains of who will take the first step. In her trip to Beijing in late August, Schwab used the “rock-paper-scissors” game to describe the importance of simultaneous action by all players. Otherwise, she warned, “One cannot play the game.”
　　“Therein lies the key challenge for WTO diplomats,” Schott told Beijing Review. “The United States, the EU, Japan and others will have to offer reforms of restrictions that have survived liberalization initiatives over the past 50 years.
　　“To get political support for changes in their long-standing trade barriers, trade officials from those countries will need to bring home agreements that offer substantial new trading opportunities in agriculture, manufacturing and services. Simply put, a big package of market access reforms is essential for a successful Doha Round deal.
　　“Thus, the leading developed and developing trading nations need to act in tandem to improve what is on offer in the Doha Round,” said Schott.China maintains that developed nations are expected to “take the lead in making substantial concessions” in terms of cutting farm tariffs and subsidies. In his meeting with Schwab, Chinese Commerce Minister Bo Xilai said, “We hope the developed WTO member countries will make substantial contributions in order to resume the talks as soon as possible and reach the objectives of the negotiations in a timely manner.”
　　These countries account for the lion’s share of world trade and represent a wide range of commercial interests. Consensus among them is considered crucial for a general agreement of all WTO members.
　　“The developed countries must act first,” said Zhou of the China Society for World Trade Organization Studies. “On the one hand, they must cut agricultural subsidies by a large margin. On the other hand, they must give a clear timetable. They can learn from what has been done in regard to textiles.”
　　He said it is difficult to reach a consensus among 149 members, but somehow a solution will finally be reached. “Nobody can shoulder the responsibility for the failure of the WTO talks.” (Wang Yanjuan and Chen Wen contributed reporting for this article from New York)China and DohaChina, as the biggest developing country and a trade giant in the world, plays an important role in the global trade system. Because of this dual identity, the country is under the global spotlight.
　　Both WTO Director General Pascal Lamy and U.S. Trade Representative Susan Schwab visited Beijing recently to exhort its leaders to strengthen their efforts toward a successful conclusion of the current Doha Round of trade negotiations and play a bigger role in reviving the world’s multilateral trade system. Many believe China can help to restart the talks, which were suspended in July.
　　Several experts give their views of the relationship between China and the Doha Round.Zhou Shijian, the Standing Councilor of the China Society for World Trade Organization Studies Why did Susan Schwab come to China? Why did Pascal Lamy come to China? They came for one purpose: to persuade China to exert its influence on the resumption of the Doha Round. Different from its peers among developing countries, China is not reliant on agriculture for its economic growth and export revenue. Therefore, it has a smaller stage in agricultural negotiations of the Doha Round.
　　Besides, China is both a developing country and a trade giant. It has a perfect understanding of how other developing countries and developed countries feel in the talks. Due to this unique status, China can work as a bridge and communicator between the developing and developed world.
　　If China plays this unique role in saving the Doha Round, it will have its status in the international community further proved.To revive the talks, China can press the United States and the EU to compromise, and in the meantime, it can coordinate the opinions of other developing countries, to finally achieve a balance of interests among all the participants.Jeffrey J. Schott, Senior Fellow of the Institute for International Economics, Washington, D.C.China has been a constructive but low-key participant in the Doha Round of multilateral trade negotiations in the WTO.
　　It has played a useful role in advancing the negotiating process through its membership in the G-20 coalition of developing countries.That said, China’s low profile in the WTO talks is not befitting its status as one of the world’s largest economies and trading nations. It has not offered additional reforms beyond the extensive commitments undertaken in its 2001 protocols of accession, and deserves blame―along with other major trading nations―for the current impasse in the talks.
　　China has an important stake in a well-functioning multilateral trading system―that’s why it spent so much effort to join the WTO and why it needs to take a more active leadership role in reviving the Doha Round.What needs to be done? First, China should work closely with other major trading nations to ensure that the WTO talks re-engage and progress.
　　To that end, China should offer improved access to its markets by cutting its tariffs on non-agricultural goods by a half from the current applied rates and liberalizing trade and investment in the financial and other service sectors. This is not as onerous as it sounds. China is in a position to contribute more than other developing countries to the final Doha Round accord. Because China’s trade barriers are already low compared with other developing countries such as India and Brazil, large percentage cuts in base tariff rates will translate into small changes in China’s applied tariffs. Such action could yield important dividends: It would allow China to respond positively to protectionist pressures in Europe and the United States, and would reinforce Chinese economic and political relations with other developing countries in the WTO.
　　Supachai Panitchpakdi, Secretary General of the United Nations Conference on Trade and DevelopmentChina alone may not [be able to revive the Doha Round of negotiations]. I think the solution should be the collective [efforts] of [many] countries.In the past, you could have some key countries pushing for the end of the round, but not these days.
　　You need a collective push and collective [sharing] of responsibility.Daniel Esty, Director of the Yale World Fellows ProgramChina has a potentially critical role to play in making the international trading system work to the advantage of all nations―and no country benefits more from open markets than China. China needs to step up to the leadership position that it aspires to fill in many respects. In the context of the Doha Round, China could emerge as a critical mediator, helping to bridge the gaps between the United States and Europe and the developed and developing worlds.
　　But China also needs to accept that those who receive benefits from global cooperation must share in the burdens of providing “global public goods.”
　　In this regard, China’s role as a bystander in the worldwide effort to reduce greenhouse gas emissions and address other global scale environmental [problems] is increasingly untenable. If China is to be seen as a leader, it must be prepared to pay its fair share (which, indeed, will be substantial) of the costs of addressing climate change and other issues involving trans-boundary harm.
　　While China has many poor people and must prioritize addressing their plight, poverty can no longer be accepted as an excuse.
　　China has great wealth today and must therefore be prepared to contribute financially and otherwise as a middle-income country (of great size) to global problem solving.China, more than any other country, will gain from the ongoing trade liberalization and risk a serious economic slowdown from its failure. So China should use all of its diplomatic and economic strength to lean on the European nations to make compromises sufficient to restart the stalled talks.

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