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The Doha Round impasseWhy can’t the limited negotiating mandates be overcome?Arguing that interests opposed to foreign competition have limited the mandates oftrade negotiators is, at best, only part of the explanation for the Doha Round impasse.What must also be explained is why the potential beneficiaries of Doha Round accordswere not able or willing to counter the opponents. Several structural explanations followand all but the final two can be found in Evenett (2007a, b).• First, an important source of commercial support for the Doha Round never cameabout because negotiations over stronger rules and greater market openness in servicesectors did not take off.Here, a less appreciated factor is that the service sector negotiating mandates of manycountries’ trade officials are influenced—if not outright determined—not just byincumbent firms, but also by independent national service sector regulators, many ofwhom resist the restriction on their freedom often implied by binding multilateral tradeaccords.It may be the case that “national politics” was taken out of national regulation throughthe creation of independent regulators, but it does not imply that these regulatorsare cosmopolitan in outlook. With service sector reform effectively taken out of thenegotiating set, along with the removal of almost all of the Singapore issues in 2004, theprincipal remaining negotiating trade-off was agricultural trade reform (in industrialisedcountries) in return for greater access to manufactured goods markets (in developingcountries). This was the basis upon which any deal had to be based.• Second, several factors diminished the value that representatives from industrialisedcountries attached to offers to open up manufacturing goods markets in developingcountries.Before the global financial crisis, with the exception of the United States and Japan,industrialised countries experienced export growth rates faster than those seen duringthe Uruguay Round negotiation. The incremental export growth expected from the115
Rethinking Global Economic Governance in Light of the Crisisoffers made in Doha Round were perceived as relatively small and, in the eyes of someleading exporters, not worth fighting for.• Third, with the exception of China, all the developing countries with large marketshave engaged in enough unilateral tariff reform since the conclusion of the UruguayRound that their maximum allowed tariffs (bound tariffs) exceed their applied tariffrates, on average (Evenett 2007a).Contrary to much economic thinking about the uncertainty-reducing benefits of tariffbindings, leading European and American associations of manufacturers and exportersargued that the unilateral tariff reductions in developing countries were irreversible andthat “binding” tariffs at existing applied levels would generate no additional commercialbenefits.Only if large developing countries agreed to accept bindings on their tariffs belowexisting applied rates would enough market opportunities for industrialised countryexporters be created, it was argued. For the largest developing countries, the latterwould typically amount to a 60–70% cut in the bound rate, a percentage cut nearlydouble the rate seen in previous multilateral trade rounds. Developing countries insistedthat the demands made of them were excessive and pointed out that the same logic wasnot accepted by industrialised countries in agricultural negotiations where, for manycommodities, applied subsidy levels currently stand well below bound subsidy levels.• Fourth, the impressive expansion in the share of world exports supplied by the Chineseduring the past decade fuelled fears in many countries—both developing andindustrialised—that any tariff cuts on manufacturers would predominately benefitChinese exporters.The fear was that this would intensify import competition even further, and threatenjobs.The sustained Chinese export surge also led to pessimism among other nations’exporters about the prospects of holding on to their overseas market shares. Together,116
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