August 2008/N°4 Major setback for WTO´s Doha Round:"Mini-Ministerial” failed and future looks dim – a chance for reclaiming its“development dimension”? Steffen Grammling It must have been one of the most difficult mo­ments for Pascal Lamy, Director-General of the World Trade Organization(WTO), on the evening of 29 July 2008, when he dryly announced the failure of the“Mini-Ministerial” with the following words:“It is no use beating around the bush. This meeting has collapsed.” It is the third time in a row that a major high-level meeting broke down after July 2006 and July 2007. However, it was not the“same procedure as every year”. Ministers from around 40 countries had failed in a 9-day and night negotiating marathon to establish modalities in the areas of agriculture and NAMA (Non-Agricultural Market Access), which have for a long time been considered a precondition for concluding the Doha Round. The“Mini­Ministerial” kicked off on 21 July in Geneva and, on the evening of 25 July, a breakthrough on key elements supposedly had been within reach. However, talks finally broke down on 29 July due to differences between the US and India on the specifics of the“Special Safeguard Mechanism”. The collapse was a major setback for the Doha Round, a political debacle for the WTO and huge frustration for Lamy personally. He had taken a great risk by calling for this meeting, served as the Chairman of the Trade Negotiations Committee (TNC) and dominated the process from the outset. Although success had never been closer, he could not conjure up final convergence. The meeting made clear that developing countries, such as India, China and Brazil, had emerged as coequal powers and irrevocably changed negotiation dy­namics. They showed that no deal will be possible against their development interests, which gives hope that a real“development outcome” might be possible sometime in the future. What was central to the“Mini-Ministerial”? The clearly stated objective of the meeting was to establish modalities in agriculture and NAMA. Given the diversity of issues involved, Lamy identified key elements, but increased the pressure again by warning delegations that “partial modalities” do not exist. At the same time, he reaffirmed the“Single Undertaking” principle, which says that nothing is agreed un­til all issues of the Doha Round are finally agreed upon. Thus, two other topics of interest, i.e. services and certain areas of the Agreement on Trade-Related Aspects of Intellectual Prop­erty Rights(TRIPS), were also taken on board. Agriculture: deal-breaker Lamy prioritized the following six issues for the agriculture negotiations: Overall Trade-distorting Domestic Support(OTDS); cotton; market access formula; sensitive products; special products(for developing countries); and the“Special Safeguard Mechanism”(for developing countries). Indeed, negotiations started when the European Commission(EC) and US announced already be­fore the meeting that they would improve their respective offers in tariff cuts and OTDS. The US’ offer for the ceiling of OTDS was US$15 billion (down from US$21 billion), which was still double the currently applied level of around US$7-8 bil­lion. The EC offered a 60 per cent tariff cut(com­pared to 54 per cent before); however, with clear exceptions for its sensitive products. Thus, on 21 July, Brazil warned that the agriculture negotia­tions were far from being finalized. Signs of con­vergence were reported during the following days on the specifics of sensitive and special products.