POLICY BRIEF 12-11

Will the World Trade Organization Enjoy a Bright Future?

by Gary Clyde Hufbauer, Peterson Institute for International Economics
and Jeffrey J. Schott, Peterson Institute for International Economics

May 2012

The Doha Round is not the first multilateral negotiation to collapse under the weight of substantive disputes and tactical blunders, but revival this time requires a greater miracle than in the darkest days of the Tokyo or Uruguay Rounds. After near-death moments, those talks concluded with a big red bow tied around a comprehensive package. Ministers went home comforted that the next big negotiation would commence well after they left office. This time is different. There will be no red bow unless the Doha package is firmly joined to an immediate follow up round of talks—conducted under entirely different rules—both on old subjects that were badly neglected in the round and urgent new subjects that have surfaced since the round was launched in 2001.

Hufbauer and Schott propose a "grand bargain" that couples a significant harvest from the Doha agenda with the future negotiation of plurilateral agreements among WTO members willing to take rewarding, yet challenging, steps forward. The harvest should start—but not stop—with agreements that create minimal commercial pain for any member but deliver widespread gains: trade facilitation, duty-free, quota-free treatment of imports from least developed countries, phaseout of agricultural export subsidies, discipline of farm export controls, and reforms to dispute settlement. The harvest should then move to harder parts of the Doha Round—agreements that deliver significant benefits to some members but cause noticeable pain in others. The other side of the grand bargain is approval from the WTO membership for like-minded countries to negotiate deals between themselves. Five topics should be served up for plurilateral talks, as part of a grand bargain commencing in 2013: services liberalization, currency undervaluation, climate and energy, zero-for-zero tariffs coupled with disciplines on nontariff barriers, and state-owned enterprises.

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RELATED LINKS

Op-ed: Too Much Legitimacy Can Hurt Global Trade January 13, 2013

Op-ed: The G-20 Is Failing April 12, 2012

Paper: The Doha Dilemma: Implications for Korea and the Multilateral Trading System September 26, 2011

Policy Brief 11-8: What Should the United States Do about Doha? June 2011

Op-ed: US Trade Policy and the Doha Round: An Alternative View May 18, 2011

Book: Figuring Out the Doha Round June 2010

Policy Brief 10-11: A Trade Agenda for the G-20 May 2010

Working Paper 09-6: What's on the Table? The Doha Round as of August 2009 August 2009

Article: A Crisis Round of Trade Negotiations? March 30, 2009

Op-ed: A 5-Step Program for Doha Rehabilitation: Rational Expectations about the Doha Round Negotiations July 18, 2008

Working Paper 08-2: Currency Undervaluation and Sovereign Wealth Funds: A New Role for the World Trade Organization January 2008

Book: Global Warming and the World Trading System March 2009

Book: Delivering on Doha: Farm Trade and the Poor July 2006



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