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 But the bill as a whole still irresponsibly overlooks other commonsense cuts such as the billions of dollars in outdated farm subsidies going to very few large agribusinesses.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.
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.
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.