The year gone by might not have been a good one for multi-lateral agreements but 2007 promises to be a landmark year for WTO. Post Doha round failure in mid-2006, the stakes for all parties have risen and the realisation that time is running out and a final decision on the fate of WTO is imminent.The outcome just might be a re-birth of an organisation that has been so instrumental in breaking down tariff barriers and furthering the cause of globalisation in the past. If the 2006 failure was disappointing, it had a few positive spin offs as well, which in 2007 and in the long run may prove to be highly significant.To start with, the failure to arrive at a conclusion on agricultural subsidies last year was as much because of the developed nation’s (read US-EU) rigidity as the developing nations’ refusal to be taken for a ride. The latter was spearheaded by countries like India and Brazil which in a way signifies a subtle change in power centre.“We are willing to move ahead on NAMA (non agricultural market access) and services but the US has to move first and present a better offer on agriculture,” said Indian Commerce and Industries minister Kamal Nath. This is not mere rhetoric and US has a real chance of putting things back on track and emerge a hero or play spoilsport and destroy everything that has been achieved under WTO so far.The failure has made US shed its rigid stance to some extent and go back to its policy drawing board to sketch a better proposal. There are indications that the past six months have not been futile and US may bring some cheer to the tables at Geneva in WTO later this month. To cut a long story short WTO may reap dividends of the developing nations’ determination in 2007.What is to be expected in WTO this year is that US, and to a lesser extent EU, will come up with a much better offer on reducing trade distorting subsidies on the domestic front. The US knows, as does everybody else, even a slight movement on cutting domestic subsidies will put WTO and with it multi-lateral agreements back on track.But there is another possibility that stares us in 2007. Though unlikely, a continuation of US’ unrelenting stance on agriculture may mean the death of WTO once and for all. Already the restart of talks on January 29 presents only a narrow window of progress since any deal must be agreed to before the expiry of the broad trade authority granted under the trade act of 2002 to President Bush which expires in July. Once that happens all decisions at WTO would have to be ratified by a newly constituted Senate. The complexities will be immense.If Geneva resembles a trade-morgue by the end of this month, the world economy will be changed forever. Every country will look at signing FTA/RTA with every other country and bilateral trade will get a new definition. While bilateral agreements of today compliment the decisions reached in WTO, the failure of the latter will see the focus shift to the former completely. A rush for signing bilateral trade agreements would help none.
