Some of my guesses for trade and public policy outcomes next year h4. A few predictions for 2006 #(relaxed) The WTO negotiations will conclude in Geneva in the third quarter, barely leaving time to create and verify a hundred-thousand pages of commitment schedules before the US negotiating authority expires. After five years of talks, the end will come in a rush bringing confusion for many including the Pacific Islands, most of Africa and even some ASEANs.
#(relaxed) The overall shape of the WTO deals on agriculture and services will not change much: but there’ll be a lot of obscure bargains made to control imports in ‘sensitive’ and ‘special’ markets in both sectors. Industries that start early in 2006 to identify traps and loopholes in the all-important schedules will have the advantage.
#(relaxed) Food health and safety (quarantine) barriers will loom larger than ever in world trade thanks to fears about the spread of epizootic disease (including ‘bird flu’). These barriers represent an enormous threat to to markets because few governments manage them in a rational way based on a cost-benefit assessment of risk mitigation strategies.
#(relaxed) Trade friction with the USA will grow, but China is still likely to jump to second on the trade ranks because the resurgent Japanese economy will spur continuing growth—as well as offering renewed opportunities for Australia. The Australian ‘FTA feasiblilty’ study with Japan won’t lead to an FTA but will identify several ways to expand investment and the composition of our trade including in services and food.
#(relaxed) Indonesia has new, competent economic management to go with the strongest real GDP growth outlook in ASEAN; inflation threatens, but corruption appears less and the government is managing security problems more adroitly. Domestic confidence will visibly improve. It’s time to reconsider Indonesian market strategies.
#(relaxed) Governments will stumble badly in the “new” climate change debate over the question of what are we willing to pay for the benefits of adaption to higher temperatures and reduction of greenhouse gas emissions. Some will again endorse mitigation plans that cost much more than they are worth; others will take a bet, at very long odds, that a market price (for carbon emissions) will be sufficient incentive for a technological solution.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher