JOINT EFFORTS: China's Minister of Commerce Chen Deming, Brazilian Minister of External Relations Antonio Patriota, Indian Minister of Commerce and Industry Anand Sharma and South Africa's Minister of Trade and Industry Rob Davies (left to right) pose after a meeting regarding the Doha Round trade negotiations in Davos, Switzerland, on January 28, 2011 (XINHUA)
The Doha Round of global trade talks, which kicked off in 2001, has lasted for quite some time. Despite huge differences among parties involved in the talks, it is now highly essential to complete them as soon as possible. Otherwise, world trade development and economic growth will suffer significant negative effects.
An agreement in the Doha Round can promote global economic recovery, which is still unstable. Through the process of lowering tariffs and cutting subsidies on agricultural production, the agreement can help increase market access. This means a surge in new trade opportunities as well as new job opportunities.
While the agreement has yet to be finalized, it represents the most ambitious trade liberalization deal ever negotiated multilaterally. New market access will bring economic benefits of $360 billion annually. If we take into account new market access created by the service sector and trade facilitation, the number could reach $500 billion.
Further, the agreement will strengthen the WTO's leading role in international trade governance. International trade today is quite different from three decades ago. Thanks to deepening economic globalization and expanding supply chains, international trade has changed greatly in its content, form and means.
The most recent modification of the WTO's governance structure was based on an agenda set by the Uruguay Round negotiations launched in 1986. The outdated governance structure has proven inconsistent with the new trade environment of the 21st century.
If the Doha Round talks remain in a deadlock, more and more countries will turn to signing bilateral or multilateral regional free trade agreements and investment protection agreements to make up for the shortcomings of the WTO. This will not only severely weaken the multilateral trading system, but also undermine the WTO's position as a leader in maintaining and supervising world trade.
Since the Uruguay Round talks were completed in 1994, many countries have unilaterally adopted a series of trade liberalization measures. The Doha Round talks are obligated to consolidate these measures with a multilateral agreement. Therefore, a successful completion of the Doha Round talks will boost confidence in the world economy and the multilateral trading system, increase the stability and predictability of the trade policies of various countries, and quell the rise of trade protectionism.
The Doha agreement will call for agricultural product trade reforms in developed countries. Currently, major developed countries maintain high agricultural subsidies as well as high tariffs on agricultural imports. The agreement will determine the upper limit of their agricultural subsidies and cancel all agricultural product export subsidies. This will force developed countries such as the United States, European countries and Japan to carry out reforms regarding agriculture and agricultural product trade.
This year holds many important opportunities for the completion of the Doha Round talks. After the outbreak of the global financial crisis in 2008, the U.S. economy fell into a severe recession. Other developed economies such as those in the euro zone and Japan, as well as a number of emerging markets, were also hit hard. How to cope effectively with economic difficulties and emerge from the crisis quickly became the top priority of governments around the world. Today, the world economy has essentially made its way through this crisis and started on the road to recovery. This makes it possible to end the Doha Round talks.
The Group of 20 (G20) Summit in Seoul and the APEC Economic Leaders' Meeting in Yokohama in November 2010 both sent a clear message that the Doha Round talks should come to fruition in 2011. Leaders attending the summits reaffirmed their commitment to ending the negotiations as soon as possible, showing greater determination than ever before. G20 members account for 85 percent of the world's GDP, 80 percent of the world's trade volume, and two thirds of the world's population. These figures will be even larger if APEC is included. Therefore, the declarations issued at the two summits signified world leaders' strong political will to complete the Doha Round negotiations.