In spite of the frantic efforts deployed by the director general of the World Trade Organization (WTO), the Doha round of trade negotiations, dubbed the development round, seem to be going nowhere. Although the above question may sound premature at this stage, we feel that there are enough contradictory tendencies and seemingly insurmountable obstacles lying in the path of a successful conclusion of this round to justify it being posed in the present circumstances. Let us also hasten to add that saying that the WTO is obsolete, as we put it here, is not to mean that the organization is useless and needs to be scrapped even as the world goes back to some sort of pre-Uruguay round situation when there were no transparent rules to restrain the excesses of a ?might is right? scenario. Actually the consensus among all the big players in the game today is that there are very compelling reasons for an organization which would fulfill the role and functions ascribed to it and expected from it by its actual membership. The point here is that the circumstances in which the organization was conceived and set up have changed so radically and in such a short span of time that it has been unable to absorb these transformations and failed to adapt to the realities of a new emerging global economic structure. The new demands on the institution are such that accommodating them would require such fundamental changes to the formal and informal structures and processes of the existing organization that at the end it would have morphed into a totally new institution. It is in this sense that the WTO in its present form presents evident signs of obsolescence. This is not a time for blame sharing and pointing fingers but rather one for taking stock of what these dramatic changes in the global environment imply and how to reinvent the WTO so that it may be more responsive to the new realities of a dramatically transforming global economic architecture and the resulting significant power shifts among the players. Such a ?remise en cause? becomes not only desirable but essential if any progress is to be achieved in maintaining trade as a fundamental engine of future growth of the global economy.

The WTO was set up to substitute for the more or less informal meetings which used to take place to set out new rules for regulating trade carried out among what was essentially a club of the rich countries of the post second world war era. Interestingly the rationale for formalizing the whole process was that there was a need to ?further integrate the developing economies into the growing global economy?. The underlying assumption was that this would be in the foremost interest of these rich countries and reflect the needs arising from the ?new division of labour? and new product/value chains being deployed by the multinationals based in those countries. It would not be fair to say, as some of the more radical anti-globalization NGOs sometimes seem to suggest, or as some of the conspiracy theorists would have us believe, that there were any sort of sinister motives lying behind these moves.

To think that this was the case would be presuming that the representatives of the ?developing countries? who agreed to join the process, albeit reluctantly and often even acrimoniously, were merely playing to the tunes of the developed countries. Given the recent turn of events there could be great dramatic irony in a view that the foresightedness actually lay on the side of the developing countries which chose to join the game sensing that under certain circumstances it is easier to stalemate a system from within rather than from without. But that would presume that the latter had foreseen the turn of events of the beginning of the new century? a presumption we would be loathe to make.

?The global trade pattern is perceptibly changing and the eastward drift of the centre of world trade can only gather momentum in the foreseeable future.?

The WTO was set up with the declared purpose of achieving the goal of ?smooth integration of the poor countries into the global economy?. The implicit but clear understanding all along was that while this would contribute to uplifting the standard of living of the peoples in these countries, it would only be achieved at costs acceptable to the powers that be (read lobbyists of all sorts and hue from the developed countries) The story of the Multi Fibre Agreement provides the perfect illustration of how this translated into practice as the agreement turned out to be the perfect instrument for the developed country governments to attune the level of liberalization of the global Textiles and Garments industry to the demands of their most strident lobbies. In contrast today one of the most glaring causes of the stalemate in trade negotiations is a direct result of some of the emerging economies successfully flexing their muscles to challenge the all powerful farm lobbies of developed countries.

It would be naïve, to believe that this is the ONLY concern of developed countries. The unfolding of events since the beginning of the new century, including the rise of the BRIC countries ( first mentioned as such in the now famous Goldman Sachs report of 2003) and other emerging economies, as most spectacularly illustrated by the take-over of US and European businesses by Asian companies (Mittal/Arcelor, Lenovo/IBM, Tata/Corus ) are clear signals that we are now in a new ball game. The global trade pattern is perceptibly changing and the eastward drift of the centre of world trade can only gather momentum in the foreseeable future. This means that the hitherto implicit and sometimes even explicit assumptions about rules of the game have to be revamped and reconfigured to reflect the recent movements on the chessboard of global business. The WTO lies at the heart of this reshuffling and it seems clear that only through a successful re-incarnation into an organization with radically different rules of engagement can it aspire to continue to be an engine of change and forward movement in the new global economic architecture. This has become even more dramatic and urgent as clear signs of a slow down in the US economy have started to emerge.

An aggravating factor would be the disturbing signals from the recently elected Democratic majority in the US Congress pointing to the US?s foreign policy veering increasingly isolationist and its trade policy protectionist. If the US retreats from its role as an imperial system so fundamental a component to the prevailing global regime this will translate into loss of interest in making any form of concessions to accommodate the rising demands of the new emerging economies. That could prove to be the final nail in the coffin of the WTO as we have known it until now.

Rajiv SERVANSINGH Mumbai 29th March 07