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At the World Economic Forum in Davos, Switzerland, trade ministers from the several countries met to renew interest in the current round of multilateral negotiations under the World Trade Organization (WTO). The Doha Round of negotiations began nearly 10 years ago and discussions have been stalled for several years. The governments nearly reached an agreement in 2008 when developed nations agreed to cut their farm subsidies and industrial import tariffs in return for developing nations lowering their tariffs on industrial goods. The perception of some developed economies is that the poorer countries interpreted the deal to mean that they would have to do nothing to reap the benefits of the concessions by the developed economies. The level of concessions offered by developing nations is considered minimal. The proposed deal in 2008 collapsed over disagreements between the United States, China and India over agricultural subsidies and special safeguard mechanisms for developing economies. Now there is increasing pressure being placed on fast-growing economies like China, India and Brazil to take greater responsibility in world economic affairs and for them to make greater concessions to reach a global trade deal. Peter Sutherland, the first director of the World Trade Organization, co-wrote a report that contends that if agreement is not reached this year the Doha Round may never be completed. This is a sentiment that appears to be shared by British Prime Minister David Cameron.

QUESTIONS FOR DISCUSSION:

  1. Global trade has continued to proliferate despite the lack of progress in the Doha Round. Is it necessary to continue to seek multilateral consensus on this trade agreement?
  2. Bilateral trade agreements such as the proposed free trade agreement between the United States and South Korea have dramatically increased since the Doha Round stalled. Is this trend toward regional economic integration through smaller agreements a positive trend or not? Is regional economic integration our friend or foe?
  3. A lot has changed in the 10 years since the Doha Round of negotiations began. Some countries considered poor when the talks began such as China and India now are the world’s fastest-growing large economies and have already recovered from the global economic downturn. Do the terms of the proposed trade agreement need to be changed to reflect the fact that countries like China and India should be asked to make greater concession to reach a global trade deal?
  4. Multilateral trade negotiations often take several years to complete and the last successful round, the Uruguay Round, took eight years to complete. Is the Doha Round doomed if agreement is not reached this year? Why do you think Peter Sutherland and Prime Minister Cameron believe this year is critical for progress with the Doha Round?

SOURCE: Dalton, M., & Fidler, S. (2011, January 29). Envoys pushing for global trade deal. Wall Street Journal, p. A7. (Retrievable online at: http://online.wsj.com/article/SB10001424052748704680604576110220421851148.html)

RELATED ARTICLE: Miller, J. (2011, January 31). Trade keeps growing, despite stalled global talks. Wall Street Journal Online. (Retrievable online at: http://online.wsj.com/article/SB10001424052748703833204576113750354401530.html)

Related video clip: Davos Talks Doha Trade Agreement. (Retrievable online at: www.reuters.com/news/video?videoId=181684614)

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