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.
Don’t Forget the Goal
Aug 01, 2008
So the world trade talks are kaput.
They collapsed earlier this week in Geneva. Trade ministers from nearly three dozen nations failed to reach a wide-ranging agreement on improving the flow of goods and services across borders, under the auspices of the World Trade Organization.
We’re now in a predictable, albeit disheartening period of finger pointing. The United States and the European Union insist that developing countries weren’t willing to open their markets enough and developing countries complain that advanced nations refused to offer adequate concessions on agricultural subsidies.
The recriminations are like a case of Monday-morning quarterbacking. But there’s an important difference: Nobody won this game. When the Doha round fell apart, everyone lost. We’ve missed a major opportunity to boost global wealth by trillions of dollars. That’s how much an economic analysis conducted for the Copenhagen Consensus said these talks were worth.
Instead of celebrating a great success, the WTO now must confront a disaster. Peter Mandelson, the EU’s trade chief, warned that trade talks are dead “for the foreseeable future.”
They sure are. The immediate danger isn’t that trade won’t advance in the near term, but that it may actually regress. Protectionism is on the march around the globe. The end of the Doha talks certainly doesn’t mean that trade between nations will stop, but there’s a chance that it will become substantially less free, for the first time since the close of the Second World War.
Everyone should take a deep breath and recall what presidential candidate Barack Obama said last week in Berlin: “Trade has been a cornerstone of our growth and global development.”
It would be a shame, then, to let it slip away. For more than 60 years, trade has played a key role in boosting prosperity in both rich and poor nations. At this time of uncertainty, we should take steps to ensure that this remarkable progress doesn’t come undone.
What the WTO needs right now is a Battle of Antietam – an engagement that it wins simply by not losing. At the start of the American Civil War, the Union suffered defeat after defeat at the hands of the Confederacy. Fort Sumter, Manassas, and the Peninsula campaign were a series of embarrassments. Then came Antietam, which was technically a draw. Yet President Lincoln managed to claim it as a victory for the North, simply because it wasn’t another setback. It even gave him the political cover to issue the Emancipation Proclamation.
World leaders should seek a similar break for the WTO – an accomplishment of any magnitude that reaffirms the organization as a legitimate and vital framework for negotiation.
An achievement along the lines of what was once imagined for the Doha round won’t be possible again for a while. In the meantime, though, the WTO should try to nudge nations toward better trade relations in a few key areas.
Agriculture won’t be one of them. It’s probably the thorniest issue any trade minister must deal with and it’s the ultimate source of Doha’s demise.
But there may be areas of potential compromise and agreement, such as an industry-specific accord. How about WTO talks that concentrate exclusively on the manufacture and trade of cars and trucks? These wouldn’t necessarily have to involve all 153 member nations of the WTO. Whereas every country has a stake in agriculture because every country has farmers, not every nation has auto factories.
As a short-term option, the WTO could focus on non-tariff issues, such as harmonized regulatory structures or a global set of rules to govern customs. Advances in one or both of these areas would help overcome some of the less obvious impediments to trade.
Potentially even more worthwhile is what success in these areas would represent: momentum in a positive direction rather than a negative one and therefore a revived infrastructure for world trade.
That’s the goal: Getting the WTO back on its feet and ready to reach for something truly ambitious.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org Mr. Kleckner was the only farmer on the U.S. advisory team to the GATT negotiations when they began in September 1986 in Uruguay.