Tuesday, October 18, 2005

previous entry | main | next entry | TrackBack (0)

Can you feel the Hong Kong buzz?

Last week WTO Director-General Pascal Lamy said that, "the engines [of WTO negotiations] are buzzing" -- mostly because of a U.S. proposal to reform its domestic price supports for agricultural goods.

Lamy has an ambitious timetable in the run-up to the December Hong Kong Ministerial conference:

I believe we should stand by our target of circulating a comprehensive draft text in mid-November, which is essential for governments to prepare themselves properly. That is about 30 days from now, counting every day as a working day. The amount of ground to be covered in this very short time is very large. But I am convinced it is not impossible. It can be done, and I believe that a number of issues are ripe for rapid movement once other sectors unblock.

Well.... the problem is that the U.S. isn't the only country that needs to make concessions.

There's the European Union, for example. Deutsche Welle is not optimistic:

First came the proposal to reduce agricultural subsidies; then came the backlash.

Peter Mandelson, the EU trade commissioner, called for reducing subsidies under the bloc's common agricultural policy by 70 percent and farm import duties by 60 percent after 2013.

Then France, along with a dozen other members, called an emergency meeting Tuesday to tie his hands. They accused him of exceeding his mandate, offering too many concessions in negotiations, and want him restricted before he goes to Hong Kong in December.

And then there's the rest of the world -- particularly the developing countries. In the Financial Times, Alan Beattie is not optimistic:

India would like to see rich countries' subsidies cut but wants to keep the tariffs that protect its millions of small, low-productivity farmers.

Moreover, other countries that are even more defensive of their farmers than India and the EU complain that their views are squeezed out of a Doha round focused on liberalising agriculture.

The Group of 33 poor countries, for example, of which India is a member, recently complained that “it is unfortunate that the G33 are not invited in representative proportion to uphold their interests in the negotiations”.

Japan has repeatedly complained its interests in agriculture it maintains some of the highest farm tariffs in the rich world are ignored....

The influential Group of 20 developing countries, for example, to which both Brazil and India belong, has proposed heavy cuts in subsidies for rich nations' farmers but modest tariff reductions for poorer countries, a combination the US says it cannot accept.

Some observers close to the talks suspect the G20 tariff offer is already close to a red line for India....

The G20 at some point must decide whether it wants a deal, says William Cline, senior fellow at the Center for Global Development in Washington. “If there is an insistence on keeping self-injuriously high tariffs as an option, then the thing is not going to fly."

Lamy is correct -- his timetable for negotiations is not impossible.

But with this constellation of interests, it's pretty damned improbable.

posted by Dan on 10.18.05 at 04:37 PM


Dan, the lack of comments on this thread should suggest where trade liberalization is on Americans' collective radar screen: it isn't.

I'd like it if the Bush administration -- or anyone else, really -- used the deficit as a means of justifying cuts in, for example, farm program spending while defending negotiations in Hong Kong as a means of getting something from other countries in exchange for spending cuts we would need to make anyway. But no one is even thinking like that, let alone talking like that.

So it looks like Rob Portman is pretty much on his own. I don't disagree with his gambit, but in reality there is little support in the United States for cutting farm supports even if other countries cut theirs. Senate Ag. Committee Chairman Chambliss even proposed, in exchange for some token reductions in this years ag spending, to extend authorization for existing farm programs until 2011 -- in other words, four years beyond the point at which the 2002 farm bill is scheduled to be reauthorized.

posted by: Zathras on 10.18.05 at 04:37 PM [permalink]


Trade liberalisation in agriculture would mostly benefit third-world
countries. Yes, consumers in the U.S. would benefit from lower food
prices but the marginal improvement in U.S. standards of living wouldn't
be that big a deal. The impact though would be enormous in certain
other countries. Rationally we should be expecting these countries
to be pushing strongly for this but it's less than clear this is actually
happening. Instead it looks like local short-sighted interests rule.

Plus with europe opposed it's just not going to happen.

posted by: Mark on 10.18.05 at 04:37 PM [permalink]

Post a Comment:


Email Address:



Remember your info?