Hi everyone. A wêek or so ago, I read what the WTO had voted for in the ministerial. Does anyone have thoughts? Here's an editorial from TMCnet.
EDITORIAL: Kicking the can in Hong Kong
(Chicago Tribune (KRT)) Dec. 24--The latest round of trade liberalization talks launched in Doha, the capital of Qatar, four years ago was supposed to go like this: Rich countries would get rid of the $300 billion a year they pay to subsidize their farmers. In exchange, poor countries would slash the high tariffs they now slap on imported manufactured goods and get rid of the non-tariff barriers that make it difficult for foreign services to enter their markets.
Sounds like a pretty fair deal. Something for everyone: Poor countries get a competitive advantage in the only trade arena where they're likely to win--agriculture. Rich countries get more markets for their goods and services--machines, cars, telecommunications, banking.
Now, though, the Doha round of talks launched by the World Trade Organization is alive only because the 149 member nations agreed to disagree at last week's meeting in Hong Kong. They kicked the can down the road, putting off until spring tough decisions and changes that must come if the promise of Doha is ever to be fulfilled.
They did eke out some progress. Rich countries agreed to end subsidies that help farmers export their products by 2013--rather than 2010 as the U.S., Brazil and developing nations had hoped. Domestic farm subsidies in the U.S., the European Union and Japan were barely touched. Rich countries agreed to cut tariffs on 97 percent of their import categories by 2008 and to provide more support and protection for poor countries. The U.S. agreed to speed up elimination of the $4 billion it pays American cotton farmers each year--but that will only happen once an overall trade deal is reached.
Given the fact that the talks were on the verge of collapse when everyone arrived in Hong Kong, all this is welcome. But these are baby steps when bold strides are needed.
Rich countries shamefully have been unwilling to buck their powerful ag lobbies. That's particularly true of the EU. At the urging of France, which seeks to protect its "gastronomic sovereignty," as one official put it, the EU fought the 2010 deadline for whacking export subsidies. France, which gets about 20 percent of EU farm subsidies, has the most to lose if they're cut.
But the U.S., which subsidizes its farmers by $20 billion a year, also resists change. Case in point: that $4 billion in cotton subsidies. They have been ruled illegal by the WTO. But the U.S. only agreed to speed up their elimination once the Doha round is successfully concluded.
This group failure means WTO members must redouble efforts to deal with these issues by an end-of-March deadline. A deal must be reached this year to give President Bush enough time to shepherd it through Congress. His fast-track trade negotiating authority expires in July 2007. After that date, any trade pact would no longer be entitled to an up or down vote--and could be nitpicked to tatters in Congress.
If WTO members fail to conclude the Doha round, it may mean the end of multilateral trade liberalization and a switch to more regional and bilateral trade pacts. The U.S. is already hedging its bets, having sealed bilateral pacts with Chile, Australia, Singapore and Morocco. The administration also is developing such pacts with South Korea, Egypt, Switzerland, Thailand, Malaysia and others. There's nothing wrong with bilateral agreements, but they are poor substitutes for broad multilateral agreements. They establish different rules and treatment for different countries. This raises costs for producers and complicates global trade.
Nobody ever believed the Doha round would be easy. The low-hanging fruit on trade liberalization had already been plucked in the eight previous trade rounds since World War II. Agriculture is every nation's first industry. It evokes an attachment to the land that is revered long after farming has been supplanted by other industries more vital to growth. But trimming farm subsidies is worth the fight. The payoff is a road to prosperity--finally--for the poorest countries in the world, and expanded markets for rich countries. Something for everyone.