The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
Editor's Note: We are saddened to hear of Dean Kleckner’s passing and extend our sympathies to his family and friends. The AgWeb staff is grateful to have had the chance to work with him.
Jul 18, 2008
As trade ministers gather in Geneva next week to continue the World Trade Organization’s Doha round, they may want to reflect on another meeting that recently took place in Copenhagen. It should remind them of the huge importance of their work--and of a remarkable opportunity that they should seize immediately.
Under the auspices of the Copenhagen Business School in Denmark, an expert panel of eight economists, including five Nobel laureates, debated how the countries of the world might do the most good for the most people at the lowest cost.
Then they did something that doesn’t happen nearly enough: They came to an agreement. It’s called the Copenhagen Consensus.
Their top recommendation: Provide supplements of vitamin A and zinc for malnourished children.
Their no. 2 recommendation: Finish the Doha round.
Here’s a partial list of the ideas that the Copenhagen Consensus ranked as less pressing than the Doha round: lowering the price of schooling, preventing and treating malaria, combating the spread of HIV, improving rural water supplies, and fighting global warming.
Each of these is a worthy goal. With finite resources, however, we can’t pursue them all--at least not well. So we need to prioritize, and to figure out which goals deliver the biggest bang for the buck, the euro, and the yen.
It turns out that the Doha round represents one of the best opportunities available for improving humanity’s lot. At least that’s what some of the smartest people on the planet say.
Why does the Doha round matter so much? A successful pact would boost global income by $3 trillion per year, with $2.5 trillion of it going to the developing world, according to one analysis.
A press release for the Copenhagen Consensus described the rationale this way: “a comprehensive conclusion to the Doha development agenda would yield such exceptionally large benefits in relation to comparatively modest adjustment costs, both for the world as a whole and for the developing countries, that this solution was ranked second.”
The logic is simple. When trade barriers fall, people keep more of their own money rather than forking it over to the grasping hands of tariff collectors. That gives them extra cash to spend on food, education and health (perhaps including Vitamin A and zinc for their children). When people make these types of investments in themselves and their future, they can lift up a nation.
One of the objectives of the Doha round is to lower agricultural tariffs. These are essentially taxes on food, and they have the effect of pushing food prices higher. This is in addition to all of the other factors that are driving them up, such as the skyrocketing cost of fuel, loose monetary policies, and unpredictable weather patterns.
The economists involved with the Copenhagen Consensus aren’t alone in believing that the Doha round is crucial. Last week in the United States, the Democratic Leadership Council said that reaching a conclusion should be the “main effort” in the next president’s trade and financial strategy. A good first step would be for Congress to approve presidential Trade Promotion Authority--perhaps both John McCain and Barack Obama should say they support this idea, no matter who is elected in November.
The WTO talks have dragged on for seven years, with no result except a sorry tale of missed deadlines and lost opportunities. Pascal Lamy, the WTO’s director-general, recently warned that “the coming weeks represent the moment of truth for the Doha Round.” It would be a shame if the latest chance to conclude these negotiations were to slip away.
“It’s not very often you get five Nobel laureates being locked up in the same room for four days talking about the biggest world issues,” said Bjorn Lomborg, organizer of the Copenhagen Consensus. “I hope that the dedication they’ve put into compiling this unique overview of the best spending options to improve the world will resonate with decision-makers all over the world.”
The WTO meetings convene on Monday. We’ll see if they’re listening.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade and Technology www.truthabouttrade.org