The failure of the Doha Round – How great is the damage?

At the G8 summit on 16/17 July in St. Petersburg, the heads of state and government decided to try to salvage a deal on the main points of market opening in agricultural and industrial goods trade before the middle of August. Nonetheless, at the end of July the negotiations within the framework of the Doha Development Agenda were indefinitely postponed. Stefan Tangermann, Director for Food and Agriculture at the OECD, argues that “a total failure of the Doha Round cannot be entirely ruled out if no agreement in agriculture is reached”. In such a difficult crisis as the one in Geneva it does not suffice to hold on to positions of yesterday just in order so save face before domestic lobbies and negotiation partners in the WTO. What is needed is a “politically and objectively convincing reason for that which is to be achieved in the negotiations. Bernhard Brümmer, University of Göttinger, warns of the increasing importance of regionalism. A far superior alternative for him is “a swift return to the Geneva negotiation tables and a more cautious application of bilateral and regional free-trade agreements than in recent years”. Jürgen Matthes, Institute of the German Economy, also points to the danger that the WTO will be weakened by more and more regional and above all bilateral trade agreements. However, there are sufficient indications that bilateralism will itself prove to be the wrong course. In the opinion of Michael Pfeiffer, German Federation of Industry and Commerce, for German small and medium-sized enterprises “there is no sensible alternative to multilateral trade agreements”. Andreas Schneider, Centre for European Policy Studies, fears that the breakdown of talks will prevent a reform of the global commercial system in the interest of the developing countries but also points out that the WTO is no development assistance institution.