Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Tuesday, July 25, 2006

Doha Is Dead

In Geneva this Monday, WTO Director-General Pascal Lamy reluctantly announced that he would call for an indefinite suspension of the Doha round talks. After four and a half years, now all work within all negotiating groups will be suspended; all deadlines will be moot. Last minute talks between the six major intransigent parties--Australia, Brazil, the European Union, India, Japan, and the U.S.--have utterly failed. "The gaps remain too wide," said Lamy. "We have missed a very important opportunity to show that multilateralism works... Today, there are only losers."

After the initial flurry of optimism at Doha in Nov., 2001, and the admittance of China and Taiwan that December, the negotiations quickly went sour. The 2003 talks in Cancun collapsed after four days. The 2004 talks in Geneva provided a glimmer of hope, but the 2005 talks in Hong Kong produced only deadlock, and subsquent meetings in St. Petersburg, Paris, and Geneva have borne no fruit. Most blamed the U.S., the E.U., and to a lesser extent the other four nations, for being unwilling to reduce their agricultural protections and subsidies in any meaningful way. And there proved to be other insurmountable differences regarding market access between developing and developed nations.

Some on the Left will crow with glee. Ever since the "Battle of Seattle" at the WTO Ministerial Conference in Nov. 1999, anti-globalization activists have targeted the WTO... but ironically, I believe the death of Doha ultimately resulted from the resurgence of conservative nationalism (led by the U.S., unfortunately). The WTO is about achieving gain; there is no ticking clock to apply pressure. To achieve success, all parties must be willing to cooperate, to compromise, to make sacrifices, and to demand sacrifices from special interests, for the sake of a common vision for their future. Conservative politicians--especially those in the pocket of special agricultural and industrial interests--are the natural enemies of true globalization.

In the UK, the conservatives are anti-E.U. In the U.S., the conservatives are anti-U.N. It was the Clinton administration that pushed NAFTA through a reluctant Congress, and helped forge the WTO in the first place. Had the U.S. chosen to put its efforts into cooperation instead of confrontation, the U.S. could been the architect of an improved global trading system instead of one of its chief obstacles. Bush's go-it-alone foreign policy has isolated the U.S. and left us despised around the world. Bush's inability to conduct diplomatic negotations is legendary, from his inability to obtain the support of the U.N. Security Council in the leadup to the Iraq war, to his failures with North Korea and Iran, to his failure to scuttle the Kyoto accords despite his best efforts, to his empty "roadmap" for peace in the Middle East. Yet even with all these, the collapse of the Doha round may yet go down in history as the greatest failure of the Bush administration.


Anonymous said...

I think DR. Strangelove has it right in that Conservative nationalism is to blame. I'll add one more wrinkle. At least in the US, conservative nationalists are HUGE fans of subsidies and protectionism for the agricultural sector.

As for any on the left who think the demise of "Doha" is a victory for poor people. If we did nothing other than end agricultural subsidies it would result in a transfer of wealth around $90 Billion PER YEAR from the industrialized countries to developing world! By helping to kill Doha (or at least not championing it), the left in the developed world has help perpetrate a gross injustice against the rural poor across the world.

At the same time, these ag subsidies cost US tax payers $70 Billion PER YEAR not counting the increases in prices that we pay.

The Doha round of WTO promised to be one of the greatest pareto improving  actions in world history. That it collapsed is a victory for those who would set the clock back to the bad old days of nationalist mercantalism.  

// posted by Raised By Republicans

Anonymous said...

Don't get me wrong with this post - I am all for an end to agricultural subsidies, international cooperation, and decreased barriers to trade - but I would like to wonder out loud what the environmental affects of increased global trade would be.

First, a couple of assumptions:

1. Global warming is a real concern and it presents some severe consequences for the world if we don't reduce our gluttonous consumption of energy (The Messenger , part of a larger global warming special at Technology Review).

2. Energy is an undervalued resource (unnacounted for negative externalities, direct government financial subsidies, government military expenditures, goverment research dollars, etc). I'm namely thinking of oil-derived energy sources. (Sample oil subsidies as presented by the Union of Concerned Scientists).

My question is "How much will globalization increase the per unit energy expenditure in a good or service?" That is, will increasing the amount of stuff that's shipped around in various states (raw material, partially assembled product, finished product) dramatically increase world energy consumption, or will it only marginally increase it? My guess is that it's somewhere in the middle and that the two worst sources of pollution are vehicular transportation and electricity generation.

Finally, I'm reminded of a piece in the Brown Alumni Magazine that talks about the advantages of locally produced food in terms of providing jobs and minimizing the costs associated with physically carting crap around the globe. 

// posted by Chris

Anonymous said...

It's not just the conservative nationalists, though. It's the fact that they are joined at the table by a large number of other opponents, giving the pro-trade lobby no natural political home. Other opponents include:
1. A lot of first world trade unions oppose free trade accords (their members stand to lose big).
2. the pro-environmental lobby (who see 'free trade' as a way to evade US pollution laws by shipping pollution-creation overseas, or even canceling the laws through WTO panels)
3. Farmers, both subsidized and non-subsidized, who fear competition with the third world.
4. Left-liberals who fear lowering wages and benefits in the first world to compete, and exploitation abroad (e.g., child labor).

These powerful vocal constituencies, when lined up with the right-wing nationalists, make it very hard for a government to pursue trade talks of this kind. And that's just the first world. The third world negotiators are dead set against any of the environmental or labor protections, for their part.

Put another way, it's not as if the Democrats are pro-trade, even though they are not conservative nationalists. As many on this blog suspect, I am skeptical of the advantages of so-called 'free' trade agreements, particularly when there is no provision made anywhere to bear the costs. Believe me, effectively closing down the US agricultural and manufacturing sectors will ruin the livelihood of millions, and most of them will never, ever see the benefits.  

// posted by LTG

Anonymous said...

I don't disagree with what has been said. But I am always irritated when the E.U. and U.S. are blamed for every failure, as if they are the Bonnie and Clyde of the world. It takes 2 to negotiate.

The U.S. and the E.U. are the nations that stand to loose the most in terms of the status quo while the poor nations are the ones who stand to gain the most. That is really what drives the failure. I have watched so many episodes of Yes, Minister, that it is grilled into my brain that all anyone wants to do is protect their power, privileges, and luxuries. They don't really want to make things better if it will cost them too much. It's greed.

That isn't to say that that status quo should be maintained. I agree with RBR on Ag subsidies. These have been the point of contention for all the WTO talks and the main reason for the failures. So unless they can resolve that problem, I don't have much hope for the WTO nor do I think the WTO isn't always about fairness.

As for Chris' point, it isn't clear what the energy consumption costs would be if you have increased trade, nor the security costs. I think what Chris is saying is that you have to weigh the costs and benefits from free trade. Well, consider this- we subsidize the production of so much unnecessary food production in this country that we let half of it rot. The other half gets shoveled at us leading to obesity among us and even our pets (my sister's cat is on a diet as is the neighbor's dog!). There are huge amounts of energy that go into that excess production, the same holds true in Europe. Now we will further subsidize farmers to produce ethanol, which uses more energy to produce than it saves.

Currently, most developing nations are using unclean technologies in their production and they may the argument that they can since they are just getting up on their feet. Well, maybe part of that "free trade" deal should be technology transfers to help less developed nations produce more cleanly? Or maybe the answer is to sign on to Kyoto and get in on the emissions trading market rather than sitting it.

You can use markets and free trade to encourage easing environmental problems. But you have to have a multilateralist president to do it.

// posted by USwest

Anonymous said...

I'm thinking about how removing ag subsidies would influence the decisions made in the developing world. A big reason we have increasing green house gasses is increased industrialization in countries like China and India. One of the reasons these countries are pushing to industrialize as fast as possible is that their traditional means of making a living (ag exports) are being hindered by protectionism in the US, EU, Japan, Australia et al.

It is possible that increased trade on really open basis would reduce the pace of industrialization in those countries least capable of enforcing environmental regs.

Consider another possible positive externality of eliminating ag subsidies...illegal immigration from Mexico and Central America. A majority of these migrants are fleeing the economic collapse of their rural provinces. This collapse was brought on by industrialized countries protecting, subsidizing and dumping (selling abroad bellow cost) ag products. If these rural parts of Central America were allowed to reclaim their place as ag exporters to North America, more people could make a decent living down there...and we'd pay less for our food and pay lower taxes (or spend more on more useful things) here. 

// posted by Raised By Republicans

Anonymous said...

You might see a drop in the illegal drug market. Afterall, when poppies are more profitable that peppers, why would I farm?

So I might save money on DEA operations.

// posted by USWest

Anonymous said...

To quote Peggy Hill, from King of the Hill, "How I could I say 'no' to a glass of homemade Mexican wine?" 

// posted by LTG