G20 backs Doha, but more flexibility needed to break impasse

Even after eight years of delays, Doha round of negotiations remain alive with the leaders at the G20 summit in Pittsuburgh reaffirming the importance of the multilateral trade settlement and vowing to conclude an agreement within 2010. However, contentious issues continue to mar practical negotiations and little movement in the stand of key trading members is seen.

After a successful meeting in India early this month, trading members had agreed to move on from the last year’s stalemate, but the direction clearly remain probabilistic. Indian trade minister had said after the Delhi meet that a breakthrough in the talks had been achieved. Ground realities though seem to have changed little. Negotiators from member countries met last week in Geneva but little progress was achieved as all parties struck to their older stands.

In order to move things faster, the Director-General of WTO Pascal Lamy has now urged the G20 leaders to give their negotiators more flexibility that would help ensure that political consensus on completing the deal may turn into actual progress in negotiations. Lamy said that the G20 leaders had backed an intensive work schedule over the next three months to close the remaining gaps in order to conclude the negotiations next year.

However, key challenges like farm subsidies by the US and European Union and high protection for farm products demanded by developing countries led by India is likely to prove the most tricky points in concluding the talks.

The negotiations ended in a failure last year after the US and developing countries led by India could not found a common ground on the issue of safeguards mechanism, meant to protect the local producers of developing countries in case of a surge in imports. However, in wake of the ongoing global economic crisis and the resulting increase in protectionist tendencies, all the parties as well as the WTO want the negotiations to restart quickly so as to reach a final understanding.