Saturday, January 28, 2006

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Those trade ministers mean business!!

Wow, some real progress was made at the Davos Economic Forum for pushing the Doha round of trade talks towards completion. Why, Alan Beattie reports for the Financial Times that trade ministers have agree to.... a new deadline:

Ministers on Saturday set themselves a tight new deadline of the end of April to come up with a framework deal under the faltering Doha round of global trade talks.

Meeting at the World Economic Forum in Davos, Switzerland, around 25 trade ministers from the World Trade Organisation’s 149 member countries promised that they would start making the key trade-offs that will underpin the final agreement.

The end-April target for agreeing the numerical formulas that will cut tariffs will require a huge acceleration in the talks, which started in 2001. “It is not going to happen unless there is a significant change in style, pace and content,” said Rachid Mohammed Rachid, the Egyptian minister who co-ordinates African countries in the talks.

Well, thank God -- the real problem with this round of trade talks had been the lack of deadlines.

Seriously, Bloomberg's Rich Miller provides some detail on what needs to be done:

Among their goals are resolving 33 differences over agricultural subsidies and 15 questions on industrial products by April 30th. "We've got a big number of topics to be addressed,'' Pascal Lamy, director general of the WTO, told reporters in Davos. ``Most of that has to be done in the first half of this year.''

U.S. Trade Representative Rob Portman told reporters that ministers agreed they needed to act together to strike a deal rather than wait for each to move first.

"They all know they have to move,'' said Lamy. ``That is the widest secret here.''

Indian Minister of Commerce Kamal Nath said the onus should be on the U.S. and Europe to slash agricultural subsidies which are hurting developing nations.

"The European Union and U.S. must move,'' he said. "Developing countries cannot accept any more paying a price for the U.S. and EU to stop doing what they shouldn't be doing anyway.''

Portman is correct about the need for cross-issue linkage -- but until the ministers in Nath's camp acknowledge this fact, I'm not holding my breath waiting for progress.

posted by Dan on 01.28.06 at 07:25 PM



It is required to pin point what cross-issue linkage Ministers like Nath are missing. The line from India and countries in that camp is very easy - EU and America are asking rest of the world to pay (in terms of trade concessions) for EU and America giving up their bad habits of bloated tariffs on Agriculture. It is like alcoholic holding rest of the family at ransom - give me more money if you want me to quit alcohol!

In the end it is that simple. Tragedy is intelligent blogs likes yours and many commentators leaning to Right would never speak, will never put a clear and decent case explaining all the details. I wonder at times whether ‘no logical response’ attitude borders on arrogance....

Anyway, as the trade negotiations proceed; every passing day does not reduce the strength of Asian economies. On the other hand it increases.


posted by: Umesh Patil on 01.28.06 at 07:25 PM [permalink]

Correction - read 'bloated subsidies' in place of 'bloated tariffs'.

posted by: Umesh Patil on 01.28.06 at 07:25 PM [permalink]

Umesh--interesting point, that seems to be the view of countries like India and Brazil.

It seems to me, though, that the problem is that trade negotiations are about give and take, not guilt-tripping or badgering one side to stop doing something bad. If India and others want the U.S. and EU to give up agricultural subsidies, it is fully in the tradition of international trade talks for the U.S. and EU to ask for something in return.

At least I think it is. Are there examples where countries have given up something just because they were forced to do so? I suppose that may happened to developing countries in the past, but I doubt it will happen with the large developed economies.

Your point about Asian economies continuing to grow and prosper regardless of the fate of the Doha round is certainly well taken and probably is a reason for the round's slow progress.

posted by: Chris on 01.28.06 at 07:25 PM [permalink]

True, you come to trade talks in order to ‘give and take’ and not to pass value judgments. But assuming negotiations on the ‘as is basis’ is a simplistic view. Beyond the prevailing trade situation of these countries; there are other extraneous considerations which do come into the picture. Otherwise, when India asks America to remove visa cap or simplify immigration why would America mention security reasons; which after 9/11 do seem relevant.

The other consequence of ‘as is basis’ approach - countries like India would also use such argument for wrong reasons. Say India has not traditionally allowed direct investment in Retail sector. It can argue that, India will remove those restrictions if the right price is paid.

This way of thinking does not seem much different than what broke Kyoto accord (not that I support that accord). America wants to continue the pollution and that is what America has been doing historically in prodigious manner. If rest of the world wants America to give up that habit; rest of the world will have to pay. The reasoning that pollution is ‘externally’ bad to the system is completely ignored here. So the question is then do we address global issues only on this brute force basis? That is how foreign policies are run is a different matter. Or else we would be never making any efforts to change behavior of nation states.

Same is the case in trade negotiations. Argument from countries like India regarding EU and American agriculture subsidies is an attempt to refer criteria which is outside the usual rules of the game – ‘as is basis’. My hunch is if we look carefully into these trade negotiations; we will start finding all such extraneous references in all sorts of places. The important point is as a general public, we all need to know more about that.

posted by: Umesh Patil on 01.28.06 at 07:25 PM [permalink]

Very interesting site, beautiful design, thank.

posted by: Rustie on 01.28.06 at 07:25 PM [permalink]

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