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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