The Round, often derailed and defying a series of deadlines, remains as stymied as ever and looks headed for an inglorious end this year. All the more so with new challenges in post-recession recovery in advanced economies weighing heavily with them in shaping trade policies in the dramatically altered global situation. This is happening especially with the Obama Administration as it manages economic recovery, trying to create jobs for millions left unemployed by the recession, and tackles huge fiscal deficits.

USA concerns are to bring down its unsustainable trade imbalances with a plan to double its exports over five years and build stronger trade tie-ups with key Asian nations though a Trans-Pacific Partnership which would include Indonesia and Australia. Being at present out of the East Asian Community, the United States is determined to retain a dominant economic presence in the Asia-Pacific region.

As of now the Doha Round remains on track without any breakthroughs on the hard core issues for multilateral trade expansion centred on agriculture through elimination or significant reductions in farm subsidies by richer countries and on the level of market access for industrial country goods in the developing world, which in turn has been over the years seeking preferential treatment for its own competitively priced manufactures in areas like textiles or leather goods. The Round has made no significant progress on other issues, notably trade in services, despite India's efforts to move negotiations in this area forward.

After the latest essay in semantics in negotiating groups, WTO Direct-General Pascal Lamy would not countenance any suggestion of another breakdown.. He told the Trade Negotiations Committee on March 26 that though there was disappointment that “we are not closer to our goal”, he had not detected any defeatism. He set the challenge as one of making another start “towards weaving all strings of the negotiations into an overall package”. It needed both technical and political work to close gaps and move towards convergence, he said.

Mr Lamy has emphasised the centrality of the multilateral trading system which, he points out, prevented a descent into full-scale protectionism by countries though some had raised tariffs and new tariff barriers without directly impinging on WTO rules and disciplines. He acknowledges that the development dimension remains central to the Doha Round and should form part of the final package, as a single undertaking covering all the issues on the agenda.

Mr Lamy now looks for a further political push to the Doha process at the forthcoming l Ministerial meetings of OECD, the Cairns Group and APEC as well as G-8 and G-20 Summits in June with hopes of a breakthrough and trade-offs even as the negotiating groups continue with their calendar of meetings over the coming months. “We should make productive use of the numerous up-coming gatherings“ and if more engagement of Trade Ministers is needed, “we will evaluate this if and when the time is ripe”.

In a joint report, WTO, OECD and UNCTAD called on leaders of G-20 to resist protectionism which would jeopardise the nascent recovery in the world economy. While noting that these nations were holding on to their commitments on an open regime for trade and investment, the report cautioned against protectionist forces gaining ground in the face of high unemployment in advanced economies.

For the record, no nation is striking a discordant note on the eventual outcome of the Doha Round though each is doing little to move the process forward. India's peripatetic Trade Minister Mr Anand Sharma claims “the entire developing world is looking towards India, which is showing leadership and will take care of their interests in the Geneva negotiations”. Not all developing countries are on the same page on all issues, barring food security and farmer livelihood, as each relates its expectations to its domestic needs and endowments. The LDCs might feel that the promised concessions for them on duty-free imports without quotas for their products are held hostage to trade-offs between leading developing countries and USA/EU.

Meanwhile, WTO reports signs of recovery in trade flows in the last quarter of 2009 which hold promise of a rebound in world exports in 2010. According to WTO estimates, exports are likely to grow by 9.5 per cent after the 12 per cent contraction, the worst in 70 years. Global output fell by 2.3 per cent in 2009 but extraordinary measures, fiscal and monetary, have succeeded in preventing a downward spiral in the new year, it said.

Without any further upheavals in the global economy, WTO said in its latest trade review, global merchandise trade should resume its normal upward trajectory through the end of 2010, although some deviation from its previous trend would persist indefinitely. Developing economies would lead the trade recovery with their exports expected to expand 11 per cent in volume while developed economies' exports would grow 7.5%. This projection is based on the consensus estimates of global GDP rising by 2.9 per cent in 2010. But a return to pre-crisis pace of trade growth, WTO said, would take two years for developing countries and three or more years for developed economies. Its estimates are also subject to risks of oil price increases and two-way changes in major currencies besides risks of instability in financial markets.

The value of world merchandise exports fell by 23 per cent in 2009 to 12.15 trillion dollars while commercial services also recorded a decline since l983 at 3.31 trillion dollars.

USA and EU (27 countries) suffered export declines of 13.9 and 14.8 per cent respectively while China and India suffered reductions by 10,5 and 6.2 per cent respectively for the calendar year.. But the year saw China overtaking Germany as the world's largest exporter with a 10 per cent share and became the second largest importer after USA. India took the 22nd place among leading exporters and 15th in imports.

India's exports and imports in 2009 were 155 billion dollars and 244 billion respectively while those of China were 1202 and 1006 billion dollars in exports and imports.

According to latest reports, China is making a strong recovery in manufacturing and exports though in March, for the first time in over a decade, it had a trade deficit but it would be made up as 2010 is set to record a robust growth in exports. India's exports in the first 11 months of fiscal year ending March 2010 were far short of its original 200 billion dollar target while imports totalled 248 billion with declines of 11.3 and 13.5 per cent respectively over the previous year.

Global trade contraction reflected fall in demand for all types of goods, consumer and investment, and in services, transport took the hit. Slump in construction activity reduced demand for iron and steel and 2009 saw synchronisation of fall in exports and imports across the board at the same time, the trade review noted. (IPA Service)