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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