INSIGHT: Industry fears loss of Doha sectoral push

27 May 2008 16:50  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--When the world talks about trade, time grinds exceedingly slow.

Seven years since the Doha round of world trade talks began, another seemingly critical period looms.

This time, World Trade Organisation (WTO) ministers are due to meet in Geneva to try to thrash out agreements ahead of the change of presidency in the US.

Many believe that this latest round of talks, which have pitched the interests of the developing nations against those of the world’s big trade blocs, cannot survive a change in the White House.

The cracks in that argument, however, are beginning to show, suggesting that attempts will be made to continue try to salvage some global pact if agreement is not reached before November.

The very real danger, though, is that the current round will disintegrate into a series of multinational agreements and that the drive to include sectoral agreements, which has been spearheaded by chemicals, will be lost.

The industry had an unprecedented opportunity last Friday to put forward its arguments for sectoral agreements under the Doha round of trade negotiations to EU trade representatives.

It and the corresponding-trade unions from five major European manufacturing sectors, representing more than 70% of the region’s external trade, met with member states in Brussels.

The event followed publication of new draft modalities, or frameworks, for non-agricultural market access.

Globally, chemicals makers want freer trade and easier access to new markets.

More than 35% of annual global chemical industry production, including pharmaceuticals, of $3.2trn, is traded internationally.

And as the industry globalises it sees a need for a global approach to the elimination of tariffs. This is not special interest talking but good business.

The industry is concerned, however, that the sectoral approach is being lost in the rush to conclude the latest round of NAMA (non-agricultural market access) negotiations.

A less ambitious tariff formula is currently being considered by trade negotiators. And the sector trade associations from Canada, the EU, Japan and the US said this month that they believed this will not result in “effective new market access improvements in key growth markets of the world”.

There are fears that, as the working frameworks for tariff reduction are set; the leeway to make progress on specific sectoral agreements will be lost.

The national and regional trade associations called in their latest statement on their respective governments to integrate and agree on the modalities of a chemicals tariff elimination agreement at the same time as the broader NAMA modalities.

A still greater threat, however, is that sectoral agreements could be pushed to one side completely as Doha fatigue sets in and politicians push for the wide-reaching global pact.

Push this round of trade negotiations past November and a new incumbent in the White House might be expected to add further delays.

In the drive to deliver a global agreement, the chemicals sector, particularly, runs the risk of losing lucrative access to fast-growing markets.

Trade has lifted sectoral growth and can continue to do so so long as barriers continue to be removed.

The ministerial meeting in Geneva is another vital step in current global trade round and one in which chemicals can win, or lose, a great deal.

By: Nigel Davis
+44 20 8652 3214

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