Canada and Brazil are working to get a World Trade Organization dispute panel to hear their respective complaints about American agricultural subsidies at the same time.
Author Archives: jdingel
Don’t cry for Doha
Alan Beattie had a thoughtful piece on trading ritual and reality in the FT yesterday:
The reality is that the great wave of globalisation since the end of the cold war has had a lot less to do with ministers signing paper trade agreements – most of which are anaemic – and a lot more to do with innovative businesses getting on and doing things…
The 10-member Association of South-East Asian Nations, for example, signed a free trade agreement in 1991. But although trade within the region has grown rapidly, less than 10 per cent of exports use the special tariff rates available under the pact, partly because the rules are so complex. Digitisation, lower transport costs and improved supply chain management have had far more impact on the region than lower tariffs…
The most protected sectors now are either – as in much of agriculture – ferociously defended by the beneficiaries or – as in services – sufficiently complex that writing binding agreements is hard. Witness the lack of progress in official attempts further to liberalise transatlantic trade, one of the biggest and most vibrant trading relationships on earth…
The evidence so far is that with world commerce itself doing fine, there is little contribution to greater globalisation being made by negotiated reductions in official barriers to trade.
It’s worthwhile to read the full column.
Don't cry for Doha
Alan Beattie had a thoughtful piece on trading ritual and reality in the FT yesterday:
The reality is that the great wave of globalisation since the end of the cold war has had a lot less to do with ministers signing paper trade agreements – most of which are anaemic – and a lot more to do with innovative businesses getting on and doing things…
The 10-member Association of South-East Asian Nations, for example, signed a free trade agreement in 1991. But although trade within the region has grown rapidly, less than 10 per cent of exports use the special tariff rates available under the pact, partly because the rules are so complex. Digitisation, lower transport costs and improved supply chain management have had far more impact on the region than lower tariffs…
The most protected sectors now are either – as in much of agriculture – ferociously defended by the beneficiaries or – as in services – sufficiently complex that writing binding agreements is hard. Witness the lack of progress in official attempts further to liberalise transatlantic trade, one of the biggest and most vibrant trading relationships on earth…
The evidence so far is that with world commerce itself doing fine, there is little contribution to greater globalisation being made by negotiated reductions in official barriers to trade.
It’s worthwhile to read the full column.
Don't cry for Doha
Alan Beattie had a thoughtful piece on trading ritual and reality in the FT yesterday:
The reality is that the great wave of globalisation since the end of the cold war has had a lot less to do with ministers signing paper trade agreements – most of which are anaemic – and a lot more to do with innovative businesses getting on and doing things…
The 10-member Association of South-East Asian Nations, for example, signed a free trade agreement in 1991. But although trade within the region has grown rapidly, less than 10 per cent of exports use the special tariff rates available under the pact, partly because the rules are so complex. Digitisation, lower transport costs and improved supply chain management have had far more impact on the region than lower tariffs…
The most protected sectors now are either – as in much of agriculture – ferociously defended by the beneficiaries or – as in services – sufficiently complex that writing binding agreements is hard. Witness the lack of progress in official attempts further to liberalise transatlantic trade, one of the biggest and most vibrant trading relationships on earth…
The evidence so far is that with world commerce itself doing fine, there is little contribution to greater globalisation being made by negotiated reductions in official barriers to trade.
It’s worthwhile to read the full column.
Krugman blogs
[HT: Thoma]
Bhagwati & Hufbauer on regionalism
The WTO hosted a debate between Gary Hufbauer and Jagdish Bhagwati on the merits of PTAs. See video at the WTO Forum. (Windows Media Player required.)
Multilateralising regionalism – day three
Audio of the roundtable debate from the WTO’s multilateralising regionalism conference is now available.
Shorter Jagdish Bhagwati: We should primarily solve regionalism by driving MFN tariff rates to zero. But I’m open to attacking the problem by whatever means available.
Shorter Richard Baldwin: Over the last fifty years, the GATT succeeded by flexibly adapting to trading challenges. Regionalism has been relatively tame thus far, it’s here to stay, and it’s the new challenge that must be tackled. The WTO can’t pretend to innocently stand aside. It must engage the issue and adapt.
Shorter Arsene Balihuta: Countries say one thing at the WTO and do another while cooking up spaghetti. While developed countries negotiating in Geneva are still beholden to mercantilism and protectionism, it’s even uglier when they turn to preferential trade agreements driven by the “mercantilist thirst for captive markets.” We should empower the WTO to persuade those cooking spaghetti outside Geneva to keep in mind that they must inevitably return to multilateralism.
Shorter Eirik Glenne: Regionalism is unavoidable and suboptimal. We know it’s a problem. Addressing these problems is going to take a long time, and the WTO will have to acquire new authority to address PTAs.
Shorter Mario Matus: The WTO is going in the right direction at the wrong speed. Chile needs to reduce poverty faster, so we’re increasing trade faster. We opened unilaterally, then negotiated PTAs which comprehensively cover issues beyond tariffs. For example, we bilaterally negotiated with Canada to end the use of anti-dumping measures. We complement the DSM by bilateral means – where rules overlap, we defer to the WTO. But Chile is still active in the WTO and very keen to promote its succcess. We need a successful Doha to mitigate some of the dangers we face.
Shorter Sun Zhenyu: Regionalism is rampant, but the real future lies in multilateralism. The WTO is not well-positioned to stimulate the multilateralisation of regionalism. The most important task is to complete the Doha round to keep the system running.
PTA negotiations disadvantage developing countries
Bilateral agreements are intrinsically more difficult to evaluate than either multilateral or unilateral liberalisations because of their second best nature ie the balance of costs and benefits is not a given… This problem of measurement is further complicated because increasingly RTA go beyond the simple dismantling of border barriers to trade in goods…
For administrations in developing countries where human capital is often the binding constraint the resource demands of negotiating one or more RTA alongside multilateral and unilateral trade policy-making are potentially much greater. This is a recipe for misunderstandings about implications of specific policy changes demanded by an agreement and in particular for economic and social development. All of this is further complicated by the possibility that each RTA negotiated by any given country could differ markedly from other RTAs under negotiation or in operation by or in that country.
Jim Rollo – The Challenge of Negotiating RTAs for Developing Countries: What could the WTO do to help? (pdf)
Relative rates of protection
Relative rate of assistance to agriculture, excluding decoupled payments, 1956 to 2004 (percent)
“The Relative Rate of Assistance is calculated as RRA = 100[(100+NRAag)/(100+NRAnonag) – 1], where NRAagt and NRAnonagt are the average percentage Nominal Rates of Assistance for the tradable parts of the agricultural and non-agricultural sectors, respectively.”
From: Kym Anderson and Tim Josling.
Australia and New Zealand have low relative rates of agricultural to non-agricultural protection because both had protection in manufacturing exceeding that in agriculture before they “unilaterally moved to virtually free markets in farm and non-farm goods.” European, Japanese and Korean protection is heavily concentrated in the agricultural sector. And America? It appears to protect its agricultural and non-agricultural sectors evenhandedly.
The shortcoming of the graph is that it depicts only relative protection. Visualizing both absolute and relative protection in the same figure would be very informative, though a bit difficult to construct.
“Cultural assimilation, cultural diffusion and the origin of the wealth of nations”
Quamrul Ashraf & Oded Galor propose a cultural explanation for economic growth, but it’s not the usual story:
A thousand years ago, Asia was ahead. Why is Europe richer now? Asia was geographically less vulnerable to cultural diffusion and thus benefited from enhanced assimilation, lower cultural diversity and greater accumulation of society-specific human capital; this was an edge in the agricultural stage. Greater cultural rigidity, however, diminished the ability to adapt to a new technological paradigm, delaying their industrialisation.
Full Vox column.
Trade Diversion 