Nothing to see here

Is there any point in con­tin­u­ing to puz­zle over trade pol­i­cy and agree­ments? Do they real­ly make any dif­fer­ence to any­thing? It seems they’ve become too hard to put togeth­er; but does that mat­ter?

Since about 2001, I’ve been writ­ing a weblog analysing inter­na­tion­al trade agree­ments, nation­al trade poli­cies and the post-WWII “sys­tem” of gov­ern­ment col­lab­o­ra­tion on trade (GATT and WTO). Among blog top­ics, it’s about as pop­u­lar as clean­ing out the cat lit­ter (… um, no, less than that). And, after the col­lapse of WTO’s Doha Round of nego­ti­a­tions, it seems about as use­ful as a dri­ving man­u­al for the Titan­ic.

There’s less and less to say because not much is hap­pen­ing. A lar­gish num­ber of regional/bilateral “free trade” deals are in var­i­ous states of draft­ing. But nego­ti­a­tions are desul­to­ry or stalled in many of them, such as the Aus­tralia-Chi­na and Aus­tralia-Japan nego­ti­a­tions. The most inter­est­ing poten­tial agree­ment from a wonk­ish per­spec­tive, the Trans-Pacif­ic Trade Part­ner­ship, aims to pull-off a tech­ni­cal merg­er between some exist­ing FTAs (the details are eye-glaz­ing). But the TPP promis­es, remark­ably, no new access to mar­kets because the Oba­ma admin­is­tra­tion is ded­i­cat­ed to a stul­ti­fy­ing in-sourced mer­can­til­ism.

In Gene­va, WTO is push­ing out a long list of dis­putes deci­sions — includ­ing accep­tance by both Chi­na and the USA of adverse dis­putes find­ings — that may (or may not) open mar­kets. But the elab­o­rate nego­ti­at­ing machine tricked out at Doha in 2001 has ground to a halt and, I pre­dict, will move not one jot in response to the Director-General’s solemn jaw-bon­ing.

The malaise has seeped even into the shel­tered work­shops of acad­eme. I teach cours­es on aspects of inter­na­tion­al trade to grad­u­ate stu­dents at the Uni­ver­si­ties of Ade­laide and Mel­bourne. But the Mel­bourne grad­u­ate sem­i­nar will be ter­mi­nat­ed next year because the fac­ul­ty poo-bahs are not con­vinced they any longer need to offer a sub­ject on the “polit­i­cal econ­o­my of trade.”

I’ve mut­tered about the mis­aligned incen­tives that lie at the heart of WTO’s prob­lem (not U.S. treach­ery as Bhag­wati claims, implau­si­bly), and I’ve explored a num­ber of dif­fer­ent ideas about the fail­ures of mul­ti­lat­er­al­ism in gen­er­al (trade, cli­mate, secu­ri­ty …). In the end, I’ve arrived at the view that mul­ti­lat­er­al col­lab­o­ra­tion on trade lib­er­al­i­sa­tion still mat­ters and that exot­ic pro­pos­als for “fork­ing” the trad­ing sys­tem between the “will­ing lib­er­a­tors” and the rest — includ­ing cur­rent options for “crit­i­cal mass” agree­ments — are unsat­is­fac­to­ry.

So far, I have iden­ti­fied only two ways out of the cur­rent dol­drum. Either a pow­er­ful “hege­mon” emerges whose inter­ests dic­tate a return to the reciprocal/MFN sys­tem of the 1950s-1970s (unlike­ly, unde­sir­able), or; over the next few decades, demo­graph­ic changes, eco­nom­ic growth and the mat­u­ra­tion of social insti­tu­tions lead to the re-align­ment of poli­cies in Chi­na, India and oth­er emerg­ing economies with those of the “West” (although, per­haps not Mr Obama’s poli­cies). The world fore­seen by the orig­i­nal Doha nego­ti­at­ing man­date (2001) will be pos­si­ble when the plu­ral­i­ty of major trad­ing economies again put a pre­mi­um on an open, mar­ket-dri­ven glob­al econ­o­my and on col­lab­o­ra­tive man­age­ment of that econ­o­my, includ­ing the exchange of “intru­sive” rights and oblig­a­tions among nations designed to enforce trans­paren­cy, due- (and effec­tive-) process and com­pet­i­tive­ly neu­tral reg­u­la­tion of com­merce.

Is this mere­ly a descrip­tion of some sort of trade-pol­i­cy Utopia? An intel­lec­tu­al exer­cise in refine­ment, but inca­pable of sus­tain­ing a pro­gram?

One Comment

  • Alan Moran wrote:

    Peter, Excel­lent piece. I just won­der though to what degree the cross bor­der trade over the inter­net might start under­min­ing con­trols more wide­ly than is already hap­pen­ing with con­sumer goods

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