Wednesday, June 2, 2004

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Doha update

Guy de Jonquières provides a mildly encouraging update in the Financial Times on the state of Doha round talks:

Recently, governments seem to have discovered fresh reserves of that commodity and talks beginning in Geneva on Tuesday will test their depth. They will seek to set parameters this month for planned negotiations on dismantling farm trade barriers, the toughest obstacle to agreeing a negotiating framework for the round by the end of July.

Unless that deadline is met, the Doha round risks being sidelined by US presidential elections in November. If that happens, the US Congress may feel less inclined to extend the new president's authority to negotiate international trade agreements into next year.

That unsettling prospect has spurred other governments to rally behind efforts by Robert Zoellick, US trade representative, to put the round back on track. Meetings this year are said to have cleared the air and renewed commitment to making progress.

That said, it looks like any deal will be modest in its achievments:

Under US and EU pressure, the G20 last week set out broad principles for this month's talks, but offered no specific proposals for narrowing gaps between the WTO protagonists. Indeed some leading G20 members now say WTO members should shelve ambitions for big improvements in agricultural market access and settle for agreements to cut subsidies.

The shift appears dictated by the reluctance of India and China, key G20 members, to open their farm markets....

But even optimists believe breakthroughs will come only at the last minute, perhaps leaving too little time for deals on other vital elements of the talks, such as industrial tariff cuts and services, on which many developing countries are holding back until they know whether the agriculture stalemate can be broken.

Some veteran negotiators hope that fear of political embarrassment will finally force WTO members to compromise. "Governments around the world have pinned their colours to the mast," says one. "If this ship sinks, they will go down with it."

posted by Dan on 06.02.04 at 12:22 AM


Oxfam had a report a while ago suggesting that removal of farm subsidies, would provide twice the amount of revenue for 3rd world countries as the combined aid they receive from the developed world. It amazes me to this day that this isn't the #1 issue for people protesting the WTO and the equality of globalization.

posted by: Jor on 06.02.04 at 12:22 AM [permalink]


The anti-globalization types frequently are linked to movements in their home countries that are demanding the retention of farm subsidies. (See, for example, France.) It's a tragedy, but, alas,not a mystery.

The Guardian, almost by itself, tried to make this a crusade during the last round of talks. Maybe they can get more traction this time.

posted by: Appalled Moderate on 06.02.04 at 12:22 AM [permalink]

I'm wondering about what seems to be the near-universal reluctance of countries to allow free trade in their farms. I knew that the US and the European countries are notorious for this, but I thought it was interesting that India and China are part of this band as well.

And every Third World country I've ever read about seems to have some sort of government run trade board that buys the farmers food and then sells it abroad.

Why is this such a strong impulse?

posted by: Matt on 06.02.04 at 12:22 AM [permalink]


Why is this such a strong impulse

Because socialism is a knee-jerk reaction the world around. The difference is, it's alternatve has been tried less outside of the west and therefore does not have the track record to reccomend it, outside of the west.

And, Dan:

New president?
Seems a bit of a presumption... and perhaps a revealing one.

posted by: Bithead on 06.02.04 at 12:22 AM [permalink]

I'm not sure what the election portends for American trade policy. Bush is unlikely to take any political risks for trade liberalization in agriculture, and a Republican Congress may not be inclined to help a Kerry administration advance an initiative in that (or any other) direction, even if it wanted to. Which it may not: reflecting the interests of his Massachusetts constituents, Kerry has had a trade-friendly record in the Senate, at least for a Democrat, but the constituency for protectionism within the Democratic Party is powerful. Kerry might choose to put trade on the back burner if he is elected, much as Bush has.

I fear the train may have left the station as far as Doha is concerned. It may have left the station as long ago as the Cancun meeting a year and a half ago. The United States is not among the governments that have "pinned their colors" to this mast; whether the round succeeds or fails will not only not have a major political impact here -- it will barely be noticed. I don't like that reality but there it is. Without vigorous American support I see only stalemate in prospect on the general trade liberalization front.

As far as advocates of farm trade liberalization as a development tool are concerned, they might benefit from advice I (and I'm sure many better qualified people) gave the Guardian during its brief pro-trade crusade last year. Trade liberalization has a chance to progress only if numerous interested parties see a chance to benefit from it, and treating it (as the Guardian did) merely as a moral obligation by the West to impoverished Malian cotton farmers isn't going to get us anywhere. American farmers -- many of whom would do very well in a subsidy, trade barrier free environment -- European and Japanese and even Indian consumers have to feel they have a stake in freer trade as well. These are the people pro-trade advocates have to reach out to, just as the interests actively opposed to trade liberalization (European and especially French farmers and bureaucrats, the Japanese rice lobby, Indian socialists, and the American sugar industry) have to be fought.

I'm not opposed to morality in trade policy -- really, I think it is a very nice thing. Yeah morality! -- but trade negotiations are mostly about reconciling interests. Getting newly converted advocates of freer markets like the Guardian to recognize this won't get us where we need to on trade liberalization by itself, but it wouldn't hurt.

posted by: Zathras on 06.02.04 at 12:22 AM [permalink]

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