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?