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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