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Monday, February 20, 2006

 

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''Wasted Trade Summit''

Washington Post, 12/21/05

For further evidence of the devaluation of summitry, look to the past week's World Trade Organization meeting in Hong Kong. Some 6,000 officials representing 149 countries spent six days together, but the vast expense and effort that went into creating such a gathering did not ensure a substantive outcome.
 
The key stakeholders - the governments of the two dozen biggest economies - clearly decided that they would show up in Hong Kong and just go through the motions. None seems willing to spend political capital on global trade liberalization. An opportunity to boost global prosperity was squandered, and the losers included the world's poor.

The summiteers tried to disguise failure with a series of modest announcements. There was an agreement to end export subsidies for farmers, but export subsidies play a small role in farm protection, and, in any event, most of them were scheduled to be abolished as part of the European Union's reform of its Common Agricultural Policy.
 
A group of 32 "least-developed" countries was promised duty-free access to rich markets, but rich countries reserved the right to protect 3 percent of their product categories, which means many of the important ones. There was much talk about extra aid to help poor countries take advantage of trade liberalization.

But the promises were unspecific, and the implication that aid donors have discovered some brilliant new way of targeting foreign assistance is illusory.

It would be one thing if the lack of progress reflected a principled objection to trade liberalization. But the intellectual case for trade is so established that the main area of argument is not whether it boosts prosperity but by how much.

The World Bank recently caused excitement by reducing its estimates of the poverty-reducing impact of complete trade liberalization: Rather than saying 320 million people would be lifted out of poverty, it estimated that between 66 million and 95 million would be lifted above the $2-a-day line.

Some critics of globalization seized on these revisions, but lifting 60 million-plus people out of poverty surely remains worth doing. Indeed, the reluctant liberalizers in Hong Kong know this. The same governments that behaved so timidly at last week's talks are marching ahead with their own regional and bilateral trade deals.

This points to the heart of the problem with global trade talks: The economic case for trade may be more broadly accepted than at any time in history, but political resentment of globalization and of global organizations is profound.

Countries such as India and China, which once believed in self-sufficiency, are now opening their economies, but they don't find global trade talks a congenial forum in which to make further tariff-cutting promises.

Poorer developing countries, which were burned in the previous round of talks by an intellectual-property agreement that harmed their interests, approach the negotiations with extreme suspicion.

The European Union, now swollen to 25 members, has so much difficulty reaching internal consensus on anything that it often can't empower its negotiator to actually negotiate. Meanwhile, the United States remains, despite some weaknesses, the world's best trade advocate.

But the Bush Administration is distracted and, in the eyes of much of the world, tarnished.

We hope to be proved wrong on this. The Hong Kong summiteers left saying they would keep trying; they will reconvene in Geneva in the spring.
 
But time is running out for this negotiation, which has to be concluded by the end of next year in order to make it through Congress before President Bush's trade-promotion authority expires.

If no deal emerges from this talkathon, the damaging impatience with global liberalization will only be strengthened.

Go back, or read the latest opinions:

''A Win-Win in Korea''

Washington Post, 02/03/06


''For Global Progress, Focus on Fair Trade''

Michelle Bachelet, Christian Science Monitor, 01/09/06


''The Stakes in Hong Kong''

Washington Post, 12/13/05


''Chinese Textiles: Quotas Not a Solution''

Kansas City Star, 11/28/05


''Cow Politics''

New York Times, 10/27/05


''Bush Starts to Bat for Free Trade''

Christian Science Monitor, 10/17/05


''Looming Trade War''

Baltimore Sun, 10-13-05





 

 


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