Category Archives: WTO Negotiations

Harvesting early is tough when harvesters disagree

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.

Things I’m reading

Richard Baldwin & Simon Evenett, Next Steps: Getting Past the Doha Round Crisis, VoxEU eBook, May 28: A number of former ambassadors to the WTO present suggestions for how we might get out of the Doha dilemma in which negotiators neither make progress nor are willing to kill the round. The task is identifying a way to make a “Doha down payment” and then head for the exits.

Susan Houseman, Christopher Kurz, Paul Lengermann, and Benjamin Mandel, “Offshoring Bias in U.S. Manufacturing“, Journal of Economic Perspectives, Spring 2011: In short, the authors say price indices for imported intermediate inputs do not fully reflect the cost savings achieved through offshoring, which means that the real growth of imported intermediates has been understated. Underestimating inputs means overestimating productivity, so that’s bad news for the growth of value added in US manufacturing.

The politics of the Doha round and US PTAs

At VoxEU, Richard Baldwin and Fred Bergsten are debating the state of trade politics. Baldwin thinks that the Doha round is the greatest opportunity for meaningful increases in US exporters’ market access and is pessimistic about the outcomes of pursuing a series of bilateral trade deals. Fred Bergsten thinks that the Doha round is failing because it doesn’t offer meaningful market access improvements and defends the Free Trade Area of the Asia Pacific proposal.

Preferential trade and economic efficiency

Daniel Altman makes (what I believe is) a novel claim:

Already, we’ve seen rich and poor countries shifting their attention to regional trade deals. Diverse groups of countries can do a lot by trading amongst themselves, exploiting differences in costs, resources, and technologies. Pretty soon, we should see a few large regional blocs dominating global trade. The ones that lower trade barriers faster will grow faster, too. In these cases, the poorer countries would be expected to catch up to the richer ones. When that happens, the wealthier blocs will start to look at the blocs that lagged behind for new trading relationships, and the barriers will start to fall between the blocs. In the end, we’ll have something very close to a global trade deal – and we will have arrived at that deal in a much more organic, economically efficient way. [emphasis added]

Yes, preferential trade is an importance force shaping the WTO talks. Yes, preferential trade is more politically palatable than multilateralism. But more economically efficient?

Most who are relatively optimistic about the dynamics of preferential trade don’t claim it’s the best path (Baldwin: “(1) Regionalism is here to stay; world trade is regulated by a motley assortment of unilateral, bilateral and multilateral trade agreements; (2) this motley assortment is not the best way to organise world trade”). How would large trade blocs be more economically efficient than a global trade deal?

Will Doha conclude in 2011?

ECIPE is hosting an online symposium asking “Will the Doha round be concluded in 2011?”

Most of the answers are in the negative. Frank Lavin simply says: “No“, because the political will isn’t present. Claude Barfield says that the recent flurry of activity in Geneva hasn’t been matched by an uptick in interest in Washington, though the Obama administration could always shift its position.

Jeff Schott, whose piece carries the most optimistic headline, “Substantial progress can be made“, writes:

Substantial progress can be made in 2011 on a Doha Round agreement. Even under the best of circumstances, however, the end game negotiations could not be concluded this year.

The reason for this downbeat assessment is simple. Despite the positive charge from G-20 leaders in Seoul last November, and despite technical work undertaken by Geneva officials since then, the major trading nations have not yet begun to negotiate with each other.

Obama on PTAs with Korea, Colombia, and Panama

Yesterday, President Obama said at the Chamber of Commerce:

We finalized a trade agreement with South Korea that will support at least 70,000 American jobs. And by the way, it’s a deal that has unprecedented support from business and labor, Democrats and Republicans. That’s the kind of deal that I will be looking for as we pursue trade agreements with Panama and Colombia, as we work to bring Russia into the international trading system.

Keith Hennessey, Director of the NEC under President Bush, says:

The problem is that the U.S. already has trade agreements with Panama and Colombia. The President is in reality saying that he is undoing those deals… When President Obama arrived, he said the South Korea FTA negotiated during the Bush Administration was a bad deal for the United States. Rather than submitting it to Congress for approval, he directed his USTR Ron Kirk to renegotiate certain parts of it with the Koreans… We see from yesterday’s remarks that the President wants this to be the model for future trade agreements. This gives labor unions and their Congressional allies tremendous leverage to water down or even block FTAs they don’t like.

That’s one interpretation of the remarks. It’ll be interesting to see what the administration actually does on trade going forward. Given the relative economic unimportance of these PTAs, I think the efforts to wrap up the WTO’s Doha negotiations this year may be more interesting.

Doha at Davos: WTO negotiations back on the global stage

Remember those WTO negotiations called the Doha round? They’re back!

In November, Germany, the U.K., Indonesia, and Turkey commissioned Peter Sutherland and Jagdish Bhagwati to co-chair a report on the Doha negotiations and their future. Its release (pdf) this afternoon, coupled with informal talks by 25-30 trade ministers (UPDATE: more details from WSJ) at the Davos festivities, has people talking about the Doha round’s prospects in 2011. The report provocatively calls for a deadline to the negotiations, saying that:

No individual player is willing to be the first to declare the Round moribund, knowing that they will then be accused of precipitating its demise. At the same time, there is not sufficient political momentum to push for a final deal. The only way to change this is to make the prospect of failure concrete, collective and unavoidable. At the G20 level political leaders should set themselves a deadline within 2011 by which the Round must be completed or declared a failure. This deadline should be inflexible and bind all players at the level of Heads of Government.

Richard Baldwin, one of the members of the commission, thinks Doha is likely to succeed this year. His VoxEU column emphasizes US domestic political considerations in explaining the timing:

If the final Doha package is not before the US Congress by mid-2011, it will get caught up in the electoral cycle. Given the poisonous atmosphere on trade in the US – made much worse by high unemployment and Tea Party populism – the Obama Administration would most likely suspend further talks until 2013 at the earliest. This would pose a very real danger. If Doha were put on hold until 2013, there is a good chance that it would never get done.

At Davos, David Cameron and Angela Merkel are saying it’s time for Doha to be done. This is the most active discussion of the WTO negotiations in quite a while. Does it mean they’ll get the deal done?