WTO Doha Round

On July 24, 2006, the WTO's Director General announced the indefinite suspension of further negotiations in the Doha Development Agenda or Doha Round of multilateral trade negotiations. The principal cause of the suspension was that a core group of WTO member countries - the United States, the European Union (EU), Brazil, India, Australia, and Japan - known as the G-6 had reached an impasse over specific methods to achieve the broad aims of the round for agricultural trade: substantial reductions in trade-distorting domestic subsidies, elimination of export subsidies, and substantially increased market access for agricultural products. The WTO is unique among the various fora of international trade negotiations in that it brings together its entire 149-country membership to negotiate a common set of rules to govern international trade in agricultural products, industrial goods, and services. Agreement across such a large assemblage of participating nations and range of issues contributes significantly to consistency and harmonization of trade rules across countries. Regarding agriculture, because policy reform is addressed across three broadly inclusive fronts - export competition, domestic support, and market access - WTO negotiations provide a framework for give and take to help foster mutual agreement. As a result, the Doha Round represents an unusual opportunity for addressing most policy-induced distortions in international agricultural markets. Doha Round negotiators were operating under a deadline effectively imposed by the expiration of U.S. Trade Promotion Authority (TPA), which permits the President to negotiate trade deals and present them to Congress for expedited consideration. To meet congressional notification requirements under TPA, an agreement would have to have been completed by the end of 2006. That now appears unlikely. TPA expires on June 30, 2007, and most trade experts and officials think that the authority would not be renewed. As a result of the suspension of the negotiations, a major source of pressure for U.S. farm policy change will have dissipated. The current farm bill expires in 2007, and many were looking to a Doha Round agreement to require changes in U.S. farm subsidies to make them more compatible with world trade rules. The option of extending the current farm law appears strengthened by the indefinite suspension of the Doha talks. The United States must still meet obligations under existing WTO agricultural agreements, which limit trade-distorting spending to $19.1 billion annually. Some trade analysts think that, now that the Round has been suspended, there could be an increase in litigation by WTO member countries that allege they are harmed by U.S. farm subsidies. This report assesses the current status of agricultural negotiations in the Doha Round; traces the developments leading up to the December 2005 Hong Kong Ministerial; examines the major agricultural negotiating proposals; discusses the potential effects of a successful Doha Round agreement on global trade, income, U.S. farm policy, and U.S. agriculture; and provides background on the WTO, the Doha Round, the key negotiating groups, and a chronology of key events relevant to the agricultural negotiations. The report will be updated.