Next week, at the Institute for International Trade in Adelaide, Andrew Stoler (Institute Director, former Deputy Director-General of WTO) and I are presenting a conference in our project on future frameworks for WTO agriculture agreements.
In addition to our own research (some linked here) we’ve commissioned the help of leading agriculture and trade policy research centers in Brazil, China, India and Indonesia to help us examine the political economy of the WTO agriculture negotiations. We’ve also benefited from comments from several of the world’s leading analysts of agricultural trade policies; summarized in our ‘Work in Progress’ paper produced for the conference.
We are especially interested in testing an hypothesis first raised by the Warwick Commission about the value of so-called critical mass agreements as an adjunct to—or even as one of several substitutes for—the WTO’s single undertaking.
Below: an extract from our Work In Progress report that asks whether recent discoveries about the rapid growth of intra-industry trade in food products suggests that CM agreements for food might be a good bet as a road to future market-opening agreements.
An much better account of the real, secular challenges facing the WTO than Larry Summers’ jumbled column (see the Sidebar) can be found in Simon Evenett’s dissection of the failure of the Doha Round, written almost a year ago. I think Simon has set the bar too high, but his call—presaging that of the Warwick Commission—for a period of reflection and a new start for the WTO is and intriguing account; accurate and carefully-argued.
“The EU and US pursued agricultural trade negotiating strategies that were not politically viable in their trading partners and their demands for tariff cuts on industrial products (driven up by the extent of unilateral reform in developing countries) could not be reconciled with some of the development-related princi- ples adopted for this Round. Finally, what was on the negotiating table was small compared to other developments in the world economy, making the cost of saying “no” easier and poten- tially reducing the attention spent on concluding the Doha Round in the first place.” from Reciprocity and the Doha Round Impasse by Simon Evenett
There’s no joy in having predicted this outcome.
As explained (at some length) in my earlier post, I don’t believe that the draft agreement on the table represented anything like the ‘substantial improvement’ in global markets that was the goal of the Doha Declaration that launched the talks in 2001. There were too many status exceptions, category exceptions, and opportunities for manipulation.
But the repeated collapse of these negotiations is a blow to confidence in the ability of the global community and leadership to manage global commons like the world trading system and, for that matter, the global environment and climate (assuming the latter is a manageable commons).
The world community last agreed to open goods and services markets on the basis of compromises struck at the end of the 1980s. The centers of world wealth, economic and trade growth and even population growth have moved far since then. The management of global commons needs to move, too
Devices such as WTO’s ‘single undertaking’—that saw one huge set of complex rules applied in a monolithic way to all economies—no longer bridge the real differences in interests that, for the present and for some years to come, will affect agreements between the worlds largest economies. Giant, poor, ‘emerging’ economies such as China, India and Indonesia are making choices that cannot be accommodated in the framework WTO built in the 1980s.
We can no longer go on pretending that with further ‘tweaking’ of exceptions and concessions we can make their obligations and needs fit into the collaborative management framework. The framework is valuable; but it must change or it will continue to seize up—as it has this week—and be abandoned.
Its time to reengineer the processes of WTO.
Here is the paper I presented today to the Melbourne University Center for Public Policy seminar on the Future of the Multilateral Trade System. It asks would ‘critical mass’ agreements—as recommended by the Warwick Commission—reinforce (‘fuse’) the WTO’s Single Undertaking or would they tend to pull it apart (‘fission’)? I welcome your comments.
Monday, 7 April 2008 at the Center for Public Policy at the University of Melbourne. The team of analytical ‘heavy-hitters’—I’m sure they love being called that—who served on the Warwick Commission will conduct a full-day symposium on why WTO is in such a mess (or not). I’ll be speaking, too, on ‘critical mass’ agreements and whether they’ll lead an explosionin the WTO. Please come…Program over the fold.
[Updated post] The University of Warwick mandated the Commission to enquire into the ‘way forward’ for the multilateral trading system. They recommend, among other things, an expansion of ‘plurilateral’ agreements among a sub-set of the Members of WTO as a way of ‘moving forward’ and some principles for guiding their adoption. I agree; there is a good case to be made for these agreements that needs further development.