Sunday, January 30, 2011

Doha Done in 2011?

. Sunday, January 30, 2011

Richard Baldwin says the Doha round of WTO negotiations will succeed this year:

The paralysis of the last two years was primarily due to the Obama administration’s unwillingness to engage the issue, according to my discussions with more than a dozen WTO ambassadors and WTO leaders since August 2010.

Obama needed every Democratic vote to get his domestic agenda through Congress. As trade liberalization is deeply opposed by some Democrats, the administration treated “trade” as a four-letter word – not to be mentioned in any way in any situation. America, the argument went, needed healthcare reform, financial reform, and a stimulus package far more urgently than it needed a trade deal. ...

And then Obama lost his majority in the lower house. Plan A was out; Plan B was in – and this includes the Doha Round. Obama supports multilateral governance in general, is broadly in favour of free trade (his anti-trade remarks on the campaign trail were directed at bilateral deals with low-wage nations, Council of Foreign Relations 2008), and believes that Doha could create US jobs. ...

But beware. While likely to conclude, nothing is sure about this deal. To drive the point home, Germany, Britain, Indonesia, and Turkey created a “High Level Trade Experts Group” in the run-up to the Seoul G20 Summit. The Group’s remit is to identify priority actions on trade, including Doha. The Group, which consists of nine trade experts[iii] appointed by the four sponsoring governments (I was appointed by the Cameron administration), today released an interim report in Davos where trade ministers are meeting informally to take political readings and identify blockages. The key points are threefold, in my view:

1. Doha is doable this year; rapid progress is being made in closing the negotiating gaps; this started in November 2010.

2. Getting the deal done requires head-of-state attention; they must authorise, or personally negotiate the last trade-offs framed by the draft agreement that their WTO ambassadors hope to have ready for April.

3. The window for this deal is the first half of 2011; after that all bets are off until 2013 at the earliest.

More at the link. I'm more skeptical, as I don't see Congress granting Obama fast-track authority. The GOP is not loudly pro-trade these days, and the xenophobic tendencies of the Tea Party movement might wreck any chances in the House. I would be surprised if a Democratic Senate would be especially interested in the idea either. Without that authority, Obama doesn't have the tool required to lead in the ways Baldwin would like to see. Moreover, without that authority -- which prevents amending or filibustering an agreement -- the Congress would likely tinker with it, amend it, stall it, and otherwise make passage less likely.

Baldwin points to 1994, when Clinton was able to work with a Republican Congress to pass trade legislation. But 1994 is not 2011. The economy had recovered from the small '91-'92 recession, and the GOP was out front in support of open trade and controlled both houses of Congress. Clinton still had fast track authority (it expired later that year). None of those things are true now, and any one of them could scuttle any deal.

And that's just in the U.S. Is Europe prepared to give in on agricultural supports at a period when economic uncertainty is especially high?

I think Obama should push for the resolution of Doha, and I think he will. But I'm not optimistic.


Doha Done in 2011?
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