Apocalypse post-Doha?

Evenett: 'Doha' Cover

I’ve been in the Mid­dle East and Europe and am just catch­ing up with a few things: such as the pam­phlet pro­duced by Simon Evenett, Richard Bald­win and a host of illus­tri­ous cheer­lead­ers for the WTO enti­tled: “Why World Lead­ers Must Resist the False Promise of Anoth­er Doha Delay”

The col­lec­tion of brief essays—pris­es de posi­tion rather than articles—makes a two fold case: that the Unit­ed States (espe­cial­ly) is mak­ing a strate­gic error by under­valu­ing the offer “on the table” in the Doha nego­ti­a­tions, and; that the alter­na­tive to a Doha deal is not busi­ness-as-usu­al but the dis­as­trous loss of a pre­cious pub­lic good (the mul­ti­lat­er­al trad­ing sys­tem in which eco­nom­ic pow­er is sub­or­di­nate to peace­ful gov­er­nance).

I’m skep­ti­cal; the evi­dence seems to me to sup­port nei­ther argu­ment.

As for the first claim: there is no “offer on the table” in the Doha nego­ti­a­tions; only a pro­ject­ed “land­ing zone”, and it’s a rocky shore still many months (at least) away, even under full-steam. Also, if the USA has mis­read the val­ue of the signals—they’re not “offers” but, rather, a cat­a­logue of walk-outs, rejec­tions and high-toned sermons—from India and Chi­na (not to men­tion the more engaged but deeply qual­i­fied pro­pos­als of Europe and Japan or the coy­ness of most mid­dle-income devel­op­ing coun­tries) it is not alone in that “error.”

The best recent esti­mate (Huf­bauer and Schott) we have of the val­ue of the prize at the “land­ing zone” (for 22 of the largest trad­ing coun­tries) is about $US63 bil­lion or 0.1% of aggre­gate GDP. If the USA assess­es that gain too small to jus­ti­fy the daft Doha agree­ments’ lock-in of con­tin­ued pro­tec­tion­ist trade “con­ces­sions”, cop-outs and “com­pen­sa­tion” to rich and poor coun­tries alike, then I’m with them.

Protection continues to fall

As for the sec­ond claim; the Evenett-Bald­win group ignores evi­dence that bor­der pro­tec­tion has con­tin­ued to fall since the turn of the cen­tu­ry; despite the deep­est glob­al reces­sion since the 1930s, gov­ern­ments have not retreat­ed behind high bar­ri­ers to pro­tect employ­ment; the cross-bor­der inte­gra­tion of nation­al goods and ser­vices mar­kets con­tin­ues to grow with­out ref­er­ence to trade agree­ments (see, too, my recent dis­cus­sion of the appar­ent impact of falling pro­tec­tion on the val­ue of WTO tar­iff bind­ings). Even more strik­ing, from an his­tor­i­cal per­spec­tive, the worlds most pop­u­lous economies are rock­et­ing to a com­pet­i­tive dom­i­nance of glob­al goods trade, boost­ing glob­al con­sump­tion and their own incomes while caus­ing huge mar­ket dis­rup­tion but no actu­al con­flict.

Apoc­a­lyp­tic visions of a world with­out Doha, intend­ed to stem a decline in Faith (not to men­tion research grants) have an old-fash­ioned the­atri­cal appeal; but they’re rub­bish, nonethe­less. The GATT/WTO trad­ing sys­tem has always been strife-riv­en and crash-prone. From the begin­ning it con­tained big con­trac­tions that both the edi­tors of this book know well; the inclu­sive­ness of GATT, for exam­ple, was noto­ri­ous­ly based on a big lie (“Don’t com­plain, don’t com­ply”) that part­ly papered over it’s pow­er-based (not ‘rules based’) guar­an­tees. The sin­gle-under­tak­ing that embod­ies the appar­ent­ly “demo­c­ra­t­ic” glob­al guar­an­tees of WTO, too, is a faus­t­ian bar­gain; it dis­guis­es asym­me­tries in the dis­putes sys­tem and in the agree­ments them­selves (Sub­si­dies, TRIPS) and stymies the evo­lu­tion of the agree­ments.

One wor­ry among the many heaped up in this pam­phlet that I do share—the only one, I think—is that the WTO Dis­pute Set­tle­ment sys­tem can­not long remain cred­i­ble if Mem­ber gov­ern­ments appear to give the Orga­ni­za­tion less cre­dence. The set­tle­ment of dis­putes by “cur­ial” process­es works only while Mem­ber gov­ern­ments respect and uphold the bal­ance of rights and oblig­a­tions cre­at­ed by the Agree­ments. If the Agree­ments loose their sta­tus, so does the Dis­putes Sys­tem. Any dete­ri­o­ra­tion here would be a loss to peace­ful glob­al gov­er­nance.

But I do not see Mem­ber gov­ern­ments aban­don­ing their active cur­rent admin­is­tra­tion of the WTO Agree­ments fol­low­ing some sort of order­ly exit from the Doha mess. The Com­mit­tees on the SPS Agree­ment, TRIPS, Anti-dump­ing, Agri­cul­ture etc. remain active­ly involved in acquir­ing and analysing data on Mem­bers poli­cies, reg­u­la­tions and com­pli­ance. I see no rea­son to sup­pose that this would change any­time soon after Doha is aban­doned. While this work con­tin­ues, the Dis­putes sys­tem will not bear the bur­den of the Organization’s cred­i­bil­i­ty.

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