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WTO Forecast for 2009

WTO Forecast for 2009

 Please note that the following is our forecast, not our preferred outcome!

Officials at the World Trade Organization (WTO) are planning an active agenda for 2009, which is likely to include broadening the scope of Doha Round negotiations and efforts to make the organization relevant beyond the Round.

President-elect Barack Obama is likely to face a new push to conclude the Doha Round at the next meeting of the G-20 ministers, which will be hosted by British Prime Minister Gordon Brown beginning April 2.  We expect that, much like the recent G-20 meeting in November, the next session will spur new calls at the ministerial level for concluding talks.  However, such calls are unlikely to have much of an impact on trade negotiators, particularly in advance of elections in India this spring.  (Doha is also likely to be on the agenda of the World Economic Forum in January, though President-elect Obama is not expected to attend.)  Rather we expect more attention at the next G-20 to focus on the “trade pledge” – the commitment by participants not to take new protectionist actions, which is already being ignored by a number of countries.

WTO Director-General Pascal Lamy intends to broaden the negotiations next year instead of focusing only on a framework for agriculture and non-agricultural market access (NAMA).  It has become clear that the strategy of focusing on the agriculture portfolio and then expecting that NAMA negotiations would proceed more easily has not been successful.  Lamy is expected to engage senior officials on NAMA and services in a more serious and strategic way next year and will also begin to address other issues, like rules and nontariff barriers, simultaneously.

Given comments from some developing countries in recent weeks, we believe that there will be pressure for Lamy to flesh out proposals on sectoral negotiations -- perhaps seeking to exchange some flexibility on tariff elimination within certain sectors for commitments by developing countries that they will participate as part of a comprehensive package.  Recent comments from Lamy also suggest that negotiators may seek to move forward separately on issues where there is substantial agreement – such as trade facilitation – if a comprehensive agreement cannot be reached soon. 

There are also efforts underway in Geneva to give life to the WTO beyond the Doha Round.  Next year, for instance, the WTO will monitor members’ trade actions in light of the economic crisis.  This work will likely reveal a serious deterioration in the trading environment.  Highlighting these trends could help generate momentum at the G-20 to do something about it.

Lamy has also indicated that he will facilitate broader discussions of issues outside the Doha mandate.  Climate change is likely to at the top of the agenda, particularly as a post-Kyoto agreement under the United Nations framework becomes clearer in the second half of the year.  This could provide an opportunity for the Obama Administration to introduce new items to the post-Doha work program at the WTO, including climate change and workers rights.

A WTO ministerial is likely in 2009, though the focus may not be exclusively on the Doha Round.  Officials in Geneva are considering a broader discussion, which is likely to include climate change as well as topics related to the future of the organization such as institutional reform and a two-track approach to trade liberalization.  (Lamy said recently that, “this need not be the big jamboree we have seen in the past, but rather a venue where Members take a strategic look at the future and steps to advance the goals of the organisation.”)

A Doha Round deal is unlikely in the first half of the year, though countries like the UK, Australia and Brazil will continue to use the global economic crisis as a way of generating momentum for further negotiations.  In the wake of elections in India, and as the Obama administration ramps up its international economics operations, some sort of an agreement within the Doha framework is possible towards the end of the year, either on a comprehensive package or – more likely – on pieces of a deal that could move separately.

NFTC would like to acknowledge the advice of John Weekes, a Senior Policy Advisor to Sidley Austin LLP and a former Canadian Ambassador to the WTO, in the preparation of this forecast.