Leadership in the trading system

Jef­frey Sachs(Sachs’ home page)”:http://www.earthinstitute.columbia.edu/about/director/ pulls no more punch­es than he usu­al­ly does in a Finan­cial Times op-ed arti­cle on 15 Octo­ber (if you don’t have an FT sub­scrip­tion you can get the arti­cle “here(link to Sachs home page at Colom­bia Uni­ver­si­ty: pdf file about 50k)”:http://www.earthinstitute.columbia.edu/about/director/pubs/ft101503.pdf as a PDF file about 50k). bq. “The cen­tral prob­lem is glob­al lead­er­ship. Though the US accounts for less than 5 per cent of the world’s pop­u­la­tion, and ter­ror­ism rep­re­sents a com­pa­ra­bly small part of the world’s bur­geon­ing prob­lems, the rest of the world has let the US set the agen­da. bq. The US has defined the glob­al agen­da for the past two years as the war on ter­ror­ism, while allow­ing all oth­er glob­al prob­lems to fes­ter. The Bush admin­is­tra­tion obses­sive­ly sees every prob­lem through the lens of ter­ror and accord­ing­ly con­sid­ers itself excused from the strug­gle against pover­ty, envi­ron­men­tal degra­da­tion and dis­ease. The irony is that with­out solu­tions to these prob­lems, ter­ror­ism is bound to wors­en, no mat­ter how many sol­diers are thrown at it. Indeed, the mil­i­tary approach may pro­vide no solu­tion what­so­ev­er.” Well, this isn’t com­plete­ly fair. The USA did attempt to show some lead­er­ship in the world trad­ing sys­tem just before the Can­cZn meet­ing of WTO, (although it’s per­for­mance was sub-par in my view). But the Bush admin­is­tra­tion has a pret­ty mixed record in the trad­ing sys­tem. There are some mild­ly good things: * The Trade Nego­ti­at­ing Author­i­ty leg­is­la­tion
* Final agree­ment with Chi­na on WTO acces­sion
* Will­ing­ness to press ahead with lib­er­al­iza­tion in free trade agree­ments And the Con­gress has to take a lot of the blame for some of the worst steps * The steel tar­iffs
* The dra­mat­ic expan­sion of agri­cul­tur­al sub­si­dies in the Farm Bill
* The ‘Byrd’ amend­ments to the anti-dump­ing leg­is­la­tion
* The glacial pace of reform of the FSC tax sub­si­dies to US exporters On bal­ance, how­ev­er, I’m inclined to agree with Sachs. Although the USA has been respon­si­ble for a huge pro­por­tion of recent glob­al trade (we’ve been ‘fly­ing on one engine’ as [[IMFWorldEcOutlook03 Ken Rogoff]] remarked), the Bush admin­is­tra­tion hasn’t shown much inter­est in glob­al trade issues. It’s cur­rent “posture(link to C Rice press con­fer­ence transcript)”:http://usinfo.state.gov/usinfo/Archive/2003/Oct/14–261205.html of step­ping back from the table until oth­ers show they’re ‘seri­ous about mov­ing froward’ is a ter­ri­ble idea. It’s a poor strat­e­gy for achiev­ing cru­cial reforms—as Clyde Prestowitz[⇒ relat­ed sto­ry] point­ed out—and is just about the con­verse of lead­er­ship.

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