Not Just a Flesh Wound
The Trade Negotiations Committee of the World Trade Organization meets on Thursday in Geneva to see if it can agree on an “early harvest” negotiating agenda that can help salvage the moribund Doha Round of multilateral trade negotiations. With a meeting of the world’s trade ministers in Geneva scheduled for mid-December, negotiators are scrambling to have something to show for their decade of unproductive work.
It is a futile exercise.
Doha should be declared dead so that nations that really want to liberalize trade can do so without fear that such efforts will somehow undermine the Round. Such initiatives have already begun, with Washington pursuing an ambitious trade deal with nations in the Pacific, and Europe negotiating free-trade agreements with India and Japan. A formal end to the Doha Round will simply acknowledge reality.
More important, burying Doha will also remove lingering inhibitions against U.S.-EU efforts to deepen and broaden the transatlantic market, which have always engendered fears they would undermine Doha. It will open the door for product-specific elimination of tariffs among like-minded nations. And it will challenge WTO members to come up with trade-negotiating objectives that actually address the current interests of their citizens and global businesses—such as how to generate more jobs, how to deal with labor and environmental issues, and how to facilitate supply chains.
The price of having allowed the Doha talks to drag on is that the search for a perfect accord has ruined the chance of a decent deal. It is now time to acknowledge that second-best trade agreements—done bilaterally, regionally, and for specific products—are better than no trade liberalization at all. Especially because, as the last decade has demonstrated, such deals are achievable and a multilateral accord is not, at least for now and for some time to come.
The futility of the WTO’s current, quixotic quest for closure is evident in the three-speed negotiating strategy laid out by WTO Director General Pascal Lamy in a speech on May 31. Lamy wants negotiators to first focus on greater benefits for developing countries, such as duty-free, quota-free treatment of their exports. On a slower track would be an unspecified set of issues. And issues of particular interest to the United States, such as market access for manufactured goods and services, would be put off until at least next year.
Michael Punke, the U.S. ambassador to the WTO, took exception to this three-speed approach. “We do not subscribe to the notion that there is yet any consensus on this question, including the issue of whether any particular issue is in or out for December,” he said in responding to Lamy’s remarks.
Moreover, Punke noted that “we have a significant concern that any consideration of early deliverables must take into account the need for ambitious results in the Round’s market-access elements.” Without greater access to emerging markets in China, India, and Brazil, the United States stands to gain little from the Doha Round.
What Punke did not say was that American development groups, which would be the logical advocates of an “early harvest” of benefits for the least-developed countries, are currently preoccupied trying to revive the U.S. Generalized System of [trade] Preferences for poor countries and to protect foreign aid from budget cuts. Playing defense, they have little energy for an offensive effort to extend trade benefits for the poor.
Even if the WTO can raise Lazarus from the dead, it is not clear that Congress would approve it. In 2010, 44 percent of Americans, a plurality, said trade agreements were bad for the United States, a sharp increase in such criticism since 2009 and some of the strongest opposition in the 13 years the Pew Research Center has been asking this question. Doha-lite, which would produce little for the U.S. economy, is unlikely to turn that sentiment around.
Moreover, many of the Washington trade cognoscenti have lost faith in the Doha Round. “Doha has never generated the interest, excitement, and sense of shared commitment to an historic undertaking among the governments and the private sector that enabled the Uruguay Round negotiators to overcome the many obstacles that stood in the way of success,” lamented Ira Shapiro, a deputy U.S. trade representative in the Clinton administration. “It is time for the international community to recognize that the Doha Round is doomed,” wrote President George W. Bush’s U.S. Trade Representative Susan Schwab in a recent issue of Foreign Affairs. If those who professionally should support Doha do not take the negotiations seriously, why should anyone else, including Congress?
As Lamy said in his May 31 speech, “With only 15 weeks of work remaining until mid-November [God forbid negotiators might work through their precious summer vacation], we have no time to waste.” That is true, but the WTO has already wasted 10 years.
With that track record, there is no reason to believe that this negotiation can be rescued in the bottom of the ninth inning. It is time to apply the mercy rule and end this embarrassing mistake so that those who want to liberalize trade can get on with it in their own way.
This article appeared in the Thursday, June 9, 2011 edition of National Journal Daily.