Archive for the ‘WTO Negotiations’ Category
Alan Beattie has a long(ish) summary of the Doha round’s dim prospects in the FT. It begins: “If Charles Dickens wanted a bleak setting for a rewrite of A Christmas Carol, his classic tale of regret and redemption, he could do worse than the World Trade Organisation.”
Here’s a tidbit that caught my eye:
Bernard Hoekman, director of the World Bank’s international trade department, told a seminar in Washington last week that the bank and others had overhyped the round. When it came to sharing blame, he said, “I can point to myself and my organisation.” The bank produced ambitious estimates of how Doha could boost economic growth and reduce poverty. “Those became a focal point for expectations, and expectations were overblown.”
Some highlights from this evening’s discussion of the Doha negotiations at Columbia University:
- On why it’s called the DDA: “I was facing down a half-dozen trade ministers who said, ‘I stood in my parliament and said there’d be no new trade round.’ So I said, ‘it’s not a trade round; it’s a development agenda’. [:::pffffffttt:::] It’s the sort of thing that doesn’t show up in many textbooks that gets the process going.” – Mike Moore
- On Doha’s prospects: “I must say, I have never heard Pascal Lamy more grim than this evening.” – Merit Janow
- “If Doha goes, no one is ever going have a multilateral round again.” – Jagdish Bhagwati
[My transcriptions are closer to quotations than paraphrasing, but these are not verbatim.]
Also on Doha, don’t miss this Alan Beattie tweet.
Jeff Schott worries that the WTO’s dispute settlement mechanism may be less effective if the dismal prospects for future negotiations cause dispute panels to expand their coverage:
Of course, WTO members will still be bound by existing obligations and the heralded dispute settlement system will continue to function. But past success is not a guarantee of future performance. Disputes undoubtedly will arise over “gray areas” of WTO law. Without the prospect of new negotiations to update and clarify the WTO rulebook, panelists will be tempted to bridge the gaps in their rulings. That is the danger: If the panelists attempt, or appear to be attempting, to usurp the powers of WTO members by interpreting and possibly expanding the scope of WTO obligations, it will likely trigger a political backlash against the WTO and discourage national compliance with such rulings. Members of Congress already think this is a problem with regard to the numerous WTO rulings against US antidumping practices. Over time, the frozen WTO legislative function will erode political support for compliance with the judicial function of the WTO
China has become too economically dominant for the United States to engage with China on its own. That is one of the major changes that has occurred in the world economy over the last decade. Fortunately, the desire and concern to ensure that China’s rise will remain a force for good is widely shared amongst other industrial and developing countries. This provides an opportunity for the United States to lead a collective effort—muscular multilateralism—to engage with China on trade issues. Moreover, because China’s economic development has benefited enormously from an
open trade system, it will have a stake in preserving it.
A concrete way to realize this is to move beyond the Doha Round to start a new round of multilateral trade negotiations — a possible “China Round” — that would focus on the issues — exchange rates, government procurement, services, technology policy, commodities, and climate change — which are particularly crucial for China’s trade relations with the US and with other large trading nations.
In your book, you talk about the importance of tethering China to a multilateral system. Why should China be interested if it’s inevitably number one?
We need to bind China today to the multilateral system so a kind of habit and incentive builds up. Then repudiation of the system would be more difficult. We need to do this before China becomes a hegemon
Everyone has to come together to do this well. If every country tries to make its own deal with China, no one will have any leverage.
Think about exchange rates. If the world came together now and said let’s do a deal on exchange rates, China would be more likely to participate. It doesn’t want to be seen as deviant from international system. The opprobrium of the world is the biggest carrot and stick to use with China.
One of your main policy recommendations is to start a China round of trade negotiations. What could that accomplish?
When China joined World Trade Organization in 2001, people said we tied China to the global economic system (because of the commitments it made to open its markets and follow international rules). But through its exchange rate policy, China has unraveled parts of its commitments. What that signifies is that Chinese leaders at the time were overreaching in terms of domestic political support. Evidently, WTO accession wasn’t politically sustainable internally.
Over time, China will move away from mercantilism. They would then have an incentive to make a deal. A deal could involve government procurement – other countries opening their bidding for China—as well as commitments by China involving control of natural resources and the exchange rate.
Jeff Schott counsels Jagdish Bhagwati against pushing a “Doha lite” deal with what’s currently on the WTO negotiating table.
Pascal Lamy has indicated that the WTO’s December ministerial meeting ought to focus on non-Doha issues, given how badly the negotiations are going.
We started this meeting on a sombre note. I do not think the conclusion looks much better. What we are seeing today is the paralysis in the negotiating function of the WTO, whether it is on market access or on the rule- making. What we are facing is the inability of the WTO to adapt and adjust to emerging global trade priorities, those you cannot solve through bilateral deals.
This risks overshadowing the achievements in other parts of the WTO functions, such as monitoring, surveillance, dispute settlement or even Aid for Trade, on which I will report fully tomorrow. There is, therefore, an urgent need to develop a shared diagnosis over the current impasse and what went wrong as a means to prepare a discussion over possible solutions as well as over emerging issues.
I would urge you to use the summer break to reflect and come prepared to fully engage in an “adult conversation” over “what next”.
The US House has passed legislation that threatens its WTO-approved agreement with Brazil on cotton subsidies:
Questions are being raised about the future of the hard-won US-Brazil cotton agreement, thanks to last week’s vote in the US House of Representatives to end payments to the Brazil Cotton Institute. In a 223-197 vote, members passed an amendment to the Agricultural Appropriations bill for fiscal year 2012 that, if enacted into law, would violate the terms of the 2010 WTO US-Upland Cotton agreement between the two countries (see Bridges Weekly, 8 June 2011).
The US$147.3 million annual payments were part of an agreement between the two countries that meant to hold Brazil back from imposing US$830 million in WTO-authorised countermeasures. The agreement came after a protracted WTO dispute that deemed various aspects of the US cotton subsidy regime as illegal.
The bill’s sponsor would like to see cuts to US agricultural subsidies, but those aren’t in the legislation:
“I’m pleased that a bipartisan group of Members agreed with me that supporting Brazil’s cotton industry with taxpayer dollars is wasteful and unnecessary. But the bill as a whole still irresponsibly overlooks other commonsense cuts such as the billions of dollars in outdated farm subsidies going to very few large agribusinesses. We cannot afford to continue spending carelessly and cutting recklessly, especially in this tough economy.”
In ongoing discussions about a mini-package for the WTO’s December ministerial meeting, the US ambassador to the WTO is pointing fingers at China for its cotton subsidies.
ICTSD: “Doha “Plan B” Hits Early Roadblock“
It is already proving complicated. On Tuesday afternoon, WTO Director-General Pascal Lamy postponed a meeting of the Doha Round’s supervisory Trade Negotiations Committee (TNC) that had been scheduled for 9 June, after his consultations with member governments determined that they were not yet in a position to provide the hoped-for direction on how to proceed. No new date was announced.
- Pascal Lamy announces plans to seek an early harvest at the December WTO ministerial meeting on LDC issues like duty-free, quota-free market access and rules of origin. They’ll push tougher issues off until 2012 (or later).
- Dani Rodrik makes the standard, straightforward case for liberalizing labor flows.