US suggests new efforts on Doha Round

A sum­ma­ry of the pro­pos­als mailed to all WTO mem­bers by US Trade Rep­re­sen­ta­tive Zoel­lick on Sun­day is “avaialable(USTR web site)”:–01-12-doha_advance.pdf from the USTR web­site (PDF file about 50k). The reac­tion from oth­er WTO mem­bers has been, pre­dictably, cau­tious. Accord­ing to Guy de Jon­quiZres in the “FT(link to Finan­cial Times—no-subs page)”: : bq. The paper angered devel­op­ing coun­tries by ton­ing down ear­li­er US demands for rad­i­cal lib­er­al­i­sa­tion of farm trade. “The US move means the joint paper is now dead,” one trade offi­cial said. bq. How­ev­er, much will depend on whether G20 mem­bers aban­don their for­mal refusal to open their own agri­cul­tur­al mar­kets. Though Brazil and some oth­ers seem ready to do so, India remains flat­ly opposed — a diver­gence that could force the group to choose between uni­ty and nego­ti­at­ing flex­i­bil­i­ty. The “joint paper” is the mud­dled EU/USA [[wrong­Mar­ke­tAc­cessEU-USA paper on agri­cul­ture]] that was crit­i­cised from all sides at Can­cZn.  His call for new efforts by the US sug­gests that Zoel­lick is not intend­ing to revis­it the messy com­pro­mis­es that he cooked up with Pas­cal Lamy (the EU Trade Com­mis­sion­er) last August.  In fact, Zoel­lick says in his let­ter that the ear­li­er “rad­i­cal” US reform pro­pos­als to elim­i­nate agri­cul­tur­al tar­iff bar­ri­ers are still on the table. Devel­op­ing countries—and others—are under­stand­ably skep­ti­cal giv­en Zoel­lick­’s waiver­ing line last year.  De Jon­quiZres cor­rect­ly implies, how­ev­er, that devel­op­ing coun­tries are pass­ing the buck when they blame the USA for not liv­ing up to it’s rhetoric on trade reform. The Can­cZn col­lapse left many ques­tions unre­solved includ­ing how far the devel­op­ing coun­tries them­selves will coop­er­ate in a glob­al mar­ket open­ing. If the G20 can’t come up with some progress on that issue then they’ll have reached pre­cise­ly the same impasse that frac­tured the Cairns Group at Can­cZn.  The agri­cul­ture nego­ti­a­tions will fiz­zle again. The polit­i­cal econ­o­my of WTO mir­rors the polit­i­cal econ­o­my of its mem­ber states. It’s an orga­ni­za­tion found­ed by politi­cians, after all, not by econ­o­mists. Except in a ‘crisis’—like the after­math of Sep­tem­ber 11, 2001 when the Mem­bers meet­ing at Doha put dif­fer­ences aside to launch the talks—WTO is a rec­i­p­ro­cal frame­work (“mer­can­tilist”, if you like, at least on the sur­face) where you have to ‘go along to get along’. Although a hun­dred eco­nom­ic mod­els (for exam­ple, this one[⇒ relat­ed sto­ry]) demon­strate that the big win­ners from trade reform are the USA, Japan and the EU, devel­op­ing coun­tries won’t extract guar­an­teed agri­cul­tur­al mar­ket reforms from the major indus­tri­al­ized coun­tries unless they are will­ing to par­tic­i­pate in the reform by reduc­ing pro­tec­tion in their own mar­kets . In fact, giv­en the increas­ing impor­tance of “south-south trade(link to HTML ver­sion of World Bank staff paper on south-south agri­cul­tur­al trade)”:‑8 includ­ing trade in food prod­ucts, devel­op­ing coun­tries as a group *will be among the biggest win­ners* from their own mar­ket liberalization.

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