WTO to focus on dispute role after Doha blow

The World Trade Organisation (WTO) will focus on its role resolving disputes after the latest efforts to strike a new global trade pact collapsed on Tuesday.

Ministers leaving nine days of abortive talks seeking a breakthrough in the WTO's Doha round reaffirmed their commitment to the multilateral trading system umpired by the WTO.

But many admitted that for the time being it will be easier to seek bilateral or regional arrangements and many acknowledged it would be some time before the Doha negotiations - already in their seventh year - could be revived, even though their current offers remain on the table.

"The WTO doesn't become less relevant or important because the Doha round goes down - the Doha round is not the WTO," said David Hartridge, a senior counsellor at GLOBAL law firm White and Case.

Besides its role in trade liberalisation, the WTO also helps settle trade disputes by helping governments adjust to trade tensions within an agreed legal system, said Mr Hartridge, a former acting director-general of the WTO.

He pointed to the long-running dispute between the US and the EU over passenger jets made by Boeing and Airbus as an example of the success of the WTO in preventing trade disputes degenerating into sanctions and damaging retaliation.

"I see it as the great success of the system in keeping what could be a very damaging conflict between two great trading powers within the bounds of law and good sense," he said.

The collapse of the Doha talks must not be allowed to weaken the trading system represented by the WTO, said the National Association of Manufacturers, one of the most influential US business lobbies.

"We must prepare ourselves for the onslaught of those pronouncing this to be the end of the WTO. That is nonsense. The WTO is the arbiter of the rules-based trading system and will continue to be the venue for future broad or specific negotiations," it said in a statement.

While the WTO continues to guide the multilateral trading system, efforts to expand that system have suffered a setback with the collapse of the Doha talks after nine days.

Countries are now likely to pursue bilateral or regional deals, easier to agree politically but with fewer economic benefits than global pacts.

And such negotiations put smaller developing countries - the big losers from Tuesday's Doha debacle - at a disadvantage. South Africa will focus on bilateral and regional pacts now to promote its exports, deputy trade and industry minister Rob Davies told reporters as the Doha negotiations broke up.

"There are other options. And at some stage this multilateral process will probably be picked up again," he said.

When that will happen is not clear. WTO Director-General Pascal Lamy said several ministers had asked him to revive the talks shortly. He said he was not about to "throw in the towel" but needed to let the dust settle and consult with members.

However, Brazilian Foreign Minister Celso Amorim, expressing disbelief that the talks had collapsed after coming so far, said it could be three or four years before they were revived.

EU trade chief Peter Mandelson said there was no prospect of agreeing the outlines of a Doha deal in the core areas of agriculture and industry - the focus of the latest talks - in the foreseeable future.

And Indonesian trade minister Mari Pangestu recalled that the previous Uruguay round of trade liberalisation had taken a two-year break at one point. Ms Pangestu speaks for the G-33 group of developing countries that promoted the special measure to protect poor farmers from import surges that proved a stumbling block in the talks.

"This is a significant setback for the international trading system," Mr Mandelson said. "We would all have been winners from a Doha deal. Without one, we all lose."

For Mr Lamy, the opening offered by Doha would have strengthened the world's insurance policy against protectionism.

"My hope is that given the resilience of the system, it will be able to resist the bumpy road ahead of us," he said.

That bumpy road, many trade experts believe, could express itself in one way in an increase in litigation, as rows over bananas, cotton and import pricing that would have been dealt with in a Doha deal continue to fester.

But that is where the WTO comes in.