Raj Bhala† Table of Contents I. the Schismatic Environment

DOHA ROUND SCHISMS: NUMEROUS, TECHNICAL, AND DEEP Raj Bhala† Table of Contents I. The Schismatic Environment ................................... 6 II. Fall 2007 Negotiations on Agriculture .......................... 8 A. The Familiar Agriculture – Industry Trade-Off and Sequencing Problem ....................................... 8 B. Special Treatment for Customs Unions? .................... 8 C. American Agreement to Deeper Farmer Subsidy Cuts ....... 10 D. Green Box and Export Competition ........................ 11 E. Special Products .......................................... 12 III. Fall 2007 Negotiations on NAMA and Services ................. 13 A. The Indian NAMA Discussion Paper ....................... 13 B. Developing Countries, RAMs, and NAMA ................. 15 C. Environmental Goods ..................................... 17 D. Services .................................................. 19 IV. The November 2007 Draft Text on Trade Remedy Rules ........ 23 A. Antidumping and Countervailing Duties .................... 23 B. Proposed AD Rule Changes ............................... 24 C. Proposed CVD Rule Changes .............................. 30 D. More Hard Bargaining..................................... 32 E. Fishing Subsidy Disciplines ................................ 37 V. The Winter Working Papers on Agriculture ..................... 39 † Rice Distinguished Professor, The University of Kansas, School of Law, Green Hall, 1535 West 15th Street, Lawrence, Kansas, U.S.A. 66045. Telephone: (785) 864-9224; Fax: (785) 864-5054. Email: [email protected]. Foreign Legal Consultant, Heenan Blaikie, L.L.P., Canada; J.D., Harvard (1989); M.Sc., Oxford (1986); M.Sc., London School of Economics (1985); A.B., Duke (1984). Marshall Scholar (1984-86). Member, Council on Foreign Relations, Royal Society for Asian Affairs, and Fellowship of Catholic Scholars. Author, TRADE, DEVELOPMENT, AND SOCIAL JUSTICE (2003); MODERN GATT LAW (2005); INTERNATIONAL TRADE LAW: INTERDISCIPLINARY THEORY AND PRACTICE (3d ed. 2008); DIC- TIONARY OF INTERNATIONAL TRADE LAW (LexisNexis 2008). The author is grateful to his Research As- sistant, Mr. Beau Jackson (Wichita, Kansas), University of Kansas School of Law Class of 2009, for his thorough review of this article. The author is indebted to Donald Cole, Editor in Chief of the Loyola University Chicago Interna- tional Law Review, Ms. Beata Guzik and Ms. Ashley Orler, Co-Symposium Editors of the Review, and their colleagues on the Review, and to Associate Dean and Professor Spencer Weber Waller, Loyola University Chicago School of Law, and Professor Greg Shaffer, former Wing-Tat Lee Chair of Interna- tional and Comparative Law, Loyola University Chicago School of Law. They kindly invited the author to participate in the 15 February 2008 Symposium on “WTO Law and Practice: The State of the Disci- pline,” and provided marvelous support and goodwill at every stage in the production of this article. Finally, the author thanks his dear friend and colleague at the University of Kansas School of Law, Professor John Head. Professor Head offered helpful comments on Sections VII and VIII of this article, and more generally is inspiring in his resolute commitment to the development of poor countries. This article assumes familiarity with Chapters 3 and 4 of the INTERNATIONAL TRADE LAW: INTERDIS- CIPLINARY THEORY AND PRACTICE textbook, referenced above, particularly concepts and terms in Doha Round negotiations, and the status of those talks through the July 2007 Draft Modalities Texts issued by Ambassadors Crawford Falconer (New Zealand) and Donald Stephenson (Canada), Chairmen of the Agriculture and Non-Agricultural Market Access (NAMA) negotiations, respectively. Volume 6, Issue 1 Loyola University Chicago International Law Review 5 Doha Round Schisms A. Non-Linear Reductions to Tariffs and Dealing with Tariff Escalation ................................................ 40 B. Exceptions for Sensitive Products with TRQ Expansion, and for Special Products ....................................... 44 C. Tariff Simplification and SSGs............................. 50 D. Non-Linear Reductions to OTDS........................... 51 E. Non-Linear Reductions to Total AMS ...................... 55 F. Reductions to De Minimis Subsidies ....................... 58 G. Expanding the Blue Box and Cutting Blue Box Subsidies . 60 VI. Crawling Toward a Conclusion ................................ 63 A. Synopsis of the February 2008 Draft Agriculture Modalities Text ...................................................... 64 B. Synopsis of the February 2008 Draft NAMA Modalities Text ...................................................... 74 C. An April 2008 Breakthrough on TRQ Expansion for Sensitive Agricultural Products?............................ 88 D. The May 2008 Draft Agriculture Modalities Text: Synopsis and Reactions ............................................. 92 E. The May 2008 Draft NAMA Modalities Text: Synopsis and Reactions ................................................. 109 F. Services Talks Sputter and Trade Remedy Rules Remain Divisive .................................................. 121 VII. The Decisive July 2008 Ministerial Meeting .................... 124 A. Synopsis of the July 2008 Draft Agriculture Text ........... 128 B. Synopsis of the July 2008 Draft NAMA Modalities Text .... 138 C. The Fractious Meeting Begins ............................. 145 D. The Friday Night Proposal ................................. 147 E. Six Causes for Another Collapse ........................... 150 VIII. Four Questions Plus Faith in a Resurrection .................... 163 A. A Premature Round? ...................................... 164 B. The Middle “D”? ......................................... 165 C. An Unwieldy Body? ...................................... 168 D. Crumbling Under Complexity? ............................. 168 I. The Schismatic Environment Schisms are the unifying theme in Doha Round negotiations. The divisions transcend the traditional and now simplistic one between rich and poor Members of the World Trade Organization (WTO). Disunion exists among the wealthy, among the developing, and among the least developed. Recently acceded Mem- bers (RAMs) vie with one another, splintering from each other, and from small, vulnerable economies (SVEs). Fundamentally different views on economic or legal doctrine drive some splits. Self-interest, sometimes naked, sometimes veiled, underlies other rifts. Ephemeral factions and coalitions form episodically, on an ad hoc basis, depending on the topic. Nearly all issues on the negotiating table are intrinsically highly technical, and their inter-linkages exacerbate the complexities. 6 Loyola University Chicago International Law Review Volume 6, Issue 1 Doha Round Schisms Nothing in multilateral trade negotiations (MTNs) is easy any more. The years of the Kennedy and Tokyo Rounds, 1964-67 and 1973-79, respectively, look like halcyon periods. Most concepts from the Uruguay Round of 1986-94 seem, in retrospect, relatively simple, though its Grand Bargain remains a mar- vel. Might it take a miracle to heal the schisms in the Doha Round and unify the WTO Members around a deal that promotes their individual goals and common good? This article chronicles the schisms in the Doha Round, which was launched in November 2001 in the Qatari capital, with resoluteness to fight back in the international economic arena against terrorism.1 Yet, many of the schisms existed well before the terrorist attacks of September 11, 2001, dating from the 1986-94 Uruguay Round, and even before. The solidarity in the post-9/11 environment proved short-lived, and was perhaps nothing more than a thin veil. Sections II, III, and IV, respectively, cover the fall 2007 Doha Round talks in agriculture, industrial trade and services, and trade remedy rules. Section V reviews the winter 2007 discussions on agriculture. Section VI summarizes the Draft Modalities Texts of February 2008. Section VII offers concluding observations. To be sure, much preceded those Draft Texts, and there even was a happy outcome on intellectual property (IP) from the December 2005 WTO Ministerial Conference in Hong Kong. But, that story is chronicled elsewhere.2 Fall and winter 2007, leading into early spring 2008, was a critical period—perhaps the most crucial one—since the Doha Development Agenda (DDA) was set. The trade negotiating authority of the American President expired at the end of June 2007, and all WTO Members appreciated that as the campaign to succeed Presi- dent George W. Bush and seat a new Congress shifted into high gear in 2008, the attention of the United States would not be on trade. The talks had evolved by fall 2007, to a highly technical stage, with many deep issues being probed. Posi- tions were clear and, as explained below, the schisms were numerous. Small wonder, then, why the Doha Round has not yet concluded. 1 For recent books on the Doha Round see Dilip K. Das, The Doha Round of Multilateral Trade Negotiations: Arduous Issues and Strategic Responses (2006); Mike Moore, ed., Doha and Beyond – The Future of the Multilateral Trading System (2004). For recent law journal articles see Seung Wha Chang, WTO for Trade and Development Post-Doha, 10 J. INT’L ECON. L. 553 (2007); Sungjoon Cho, Doha’s Development, 25 BERKELEY J. INT’L L. 165 (2007); Sungjoon Cho, Beyond Doha’s Promises: Administrative Barriers as an Obstruction to Development, 25 BERKELEY J. INT’L L. 395 (2007); Marjorie Florestal, Technical Assistance

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