The best one can say about the Doha meetings is that both rich and poor countries have become pretty sophisticated at appearing to be making concessions they are not really making at all.
Does anyone remember that at the last meeting of the World Trade Organization the trade representatives of the participating countries made a formal commitment to reach a final deal on cutting agricultural and industrial tariffs and subsidies by April 30th of this year? Well, the deadline just passed and the Doha Round of global trade talks — as the multilateral negotiations are called — is not making any progress.
In fact, the Doha Round, created to advance global growth and development by lowering trade barriers, has not made any meaningful progress since its launch in the traumatic, post-9/11 days of November of 2001. Whatever (little) progress there has been in trade liberalization since the talks began has come from bilateral agreements. For the past five years, the Doha Round negotiations have continued all over the world, including four major international gatherings in Cancun, Geneva, Paris, and Hong-Kong. Yet, the best one can say about these meetings is that both rich and poor countries (if I may use this simplistic division) have become pretty sophisticated at appearing to be making concessions they are not really making at all.
If the talks remain stalled, there will be major complications, such as the “fast-track” authority that currently allows the President of the United States to negotiate trade deals without interference from Congress, due to expire a year from now. And it is unlikely to be renewed considering the isolationist and protectionist mood of a large part of the body politic in this country.
Bureaucrats tend to make things hard to understand for us commoners, but what is at stake is extremely simple. Poor countries want to export more farm products to rich countries that currently protect their farmers and rich countries want to export more manufactures and services to poor countries that currently hamper their access. In between, there are those, like China, who side with the rich countries on industrial matters (they want to build cars in developing countries) and with the poor countries on agricultural issues (they want fewer obstacles for their exports to the EU), but want to keep some of their own trade barriers.
Both rich countries and poor countries have been playing games with each other, as well as with the public. Rich countries are offering to eliminate 97 percent of their tariffs, which sounds wonderful — except that the remaining 3 percent accounts for a huge portion of their markets. Poor countries in return are offering to open their markets to foreign investment under clearer guidelines, but insisting on retaining subtle restrictions that will amount to maintaining the current situation.
As if this were not enough, the European Union (EU) does not even have a consensus position on international trade. For example, France, where the farm lobby is particularly strong, does not agree with the common EU position on tariff elimination, which France considers too generous.
The fight between the U.S. and the European Union is another cause of the stalled trade talks. The U.S. has been pushing the EU to reduce farm subsidies by 75 percent, but the EU is offering to reduce them by only 47 percent. The EU accuses the U.S. of not reducing its own farm subsidies, while the U.S. insists (correctly) that European farm subsidies are twice as high as those in the U.S.
The major players at the Doha Round will claim that some progress has been made because of the agreement reached on the elimination of export subsidies by 2013. This is another clever trick. Export subsidies are not the problem. Export subsidies account for a tiny percentage of all farm subsidies and, in any case, an export subsidy simply means that the exporting country is forcing its citizens to make its exports cheaper for consumers in the importing country. Thank you very much.
The great challenge in world trade is not to make imports more expensive but less expensive. Domestic protection is what stands in the way. A rich country like the U.S. should not be forcing its citizens to pay twice as much as the rest of the world for the sugar they consume. A poor country like Brazil should not be forcing its citizens to pay more for the cars it manufactures by placing trade barriers on cars imported from China, which is becoming a major auto exporter.
In a rational world, every country would simply eliminate its trade barriers and subsidies unilaterally. In the real world, we tend to complicate matters so much that we eventually need to create a labyrinth like the Doha Round global trade talks in which we keep going around in circles without finding a way out. All we need to do is stop treating trade negotiations as if they were part of a war settlement in which each country seeks to aggrandize its territory at the expense of everybody else. In matters of trade, things work in exactly the opposite way: the more territory you concede — that is, the less protection you maintain — the bigger the size of your country’s power.





































In an ideal world with no maniacs, no enemies, no people who resent you and want you dead, the complete abolishion of trade restrictions would be the ultimate step to creating a utopic world marketlplace where each and every country reaches the perfect trade balance to accentuate it's strenghts and overcome it's weaknesses. But unfortunately, we don't live in that world, not by a longshot, and allowing potentially volotile, hostile and unfriendly countries to have a controlling stake in your domestic economy makes you economically vulnerable, not strong. Or I guess you think that a 7 trillion dollar trade defecit with a communist country with the largest army in the world and one of the most impressive stockpiles of nuclear warheads whose friendliness to the US is marginal at best, is beneficial to this country? Between them and the unfriendly, anti-freedom, terror harboring nations of OPEC selling us 30% of oil, why we've just about got it made in the shade, don't we?