Sunday, August 01, 2004

World Trade Deal: Differing Perspectives,

On the pro-side, I think we can dispense with that by referring our kind readers to Daniel Drezner's article on the topic. In it I think he actually comes close to praising the honesty of the WTO press releases, or at least he says they're the least filled with propaganda he's seen. I'm not sure Dan sees the distinction, but we'll let that pass for now.

I haven't formed an opinion yet myself. The oldman don't like to get smoke blown in his eyes, he likes to see how things settle out before calling them.

As such, here's apparently one source that is reporting some disastisfaction with the trade talks compromise. (Independent-UK)

Rich countries also agreed to cut tariffs on farm imports that make it tough for poorer countries to compete. The highest agricultural import tariffs will face the biggest cuts, although no figures have yet been agreed.

Nations will have the right to keep higher tariffs on some of the products they consider most important.

The deal on farming cleared the way for accords on access to markets for industrial goods and services, such as banking, water and telecommunications...

But pressure groups said yesterday's deal did not guarantee reforms to help the poorest countries. "There are no cast-iron commitments here and no clear timeline for reform," said Celine Charveriat, head of Oxfam's Geneva office.

"The lives and jobs of millions of people depend on these talks but rich countries are still failing to show leadership, pandering instead to vested interests and forcing developing countries to adopt a strategy of damage limitation."

Aileen Kwa, a senior analyst at the Asian trade policy group Focus on the Global South, said the deal was a "betrayal of the world's poor".


  • All 147 members of the World Trade Organisation have agreed on the basis for talks on a trade deal, but still have months of hard negotiations ahead
  • Rich countries have agreed to eliminate all forms of export farm subsidies but can keep some of their domestic support
  • The deal includes a "down payment" that would see an immediate 20 per cent cut in the maximum permitted payments by rich nations
  • Europe's multibillion-pound sugar industry is still outside the negotiations
    West African states failed in their attempt to open separate negotiations over the US's $3bn (£1.65m) of subsidies for its cotton-growers
  • Poorer countries will have to cut import barriers under which the highest get cut the most
  • Developing countries have to negotiate on rules to make customs procedures easier and less expensive for business

  • I don't think the talks are a disaster. Agreements are by definition agreements in particular. Anyone can agree about general principles. It's the details are always the main sticking points in negotiations.

    Any agreement that is a real negotiated agreement is an agreement about certain detailed and specific particulars. It seems that only a few issues were resolved of great importance at this round of trade talks, but the participants felt it necessary to avoid the sense of crisis that would emerge from another "failed round of talks". So they made a few concessions and agreed to revisit other sticking points.
    Under the agreement, key WTO members, including the United States, the EU, Brazil and Japan, have agreed to the eventual elimination of export subsidies.

    Wealthy nations currently spend about $370bn (£203bn) a year on all forms of farm support. African and Latin American countries say this enables wealthy farmers to "dump" cheap produce on their markets, annihilating their domestic farming industries.

    The deal includes a "down payment" that would see an immediate 20 per cent cut in the maximum permitted payments by rich nations.

    I think the story here is that it's a lot of heat and little light. The participants managed to avoid a deadlock or a Mexican stand-off but the most contentious issues haven't been dealt with yet. The backstory seems to be that the smaller economies are organizing sufficiently to prevent themselves from allowing the rich countries to have it all their own way. However the economic power of the bloc of developed countries is still sufficient to weigh the balance of issues in their favor. I see a lot more text on things that imply the lowering of barriers of poorer countries to imports than I see the opening of markets in mature developed economies.

    This may be the best that the developing nations can hope for. It may also be ironically the only thing that prevents us from sliding over the edge into a civil war here in America. As I've noted before, one of the fundamental pillars of politico-economic stability in America has been food security. Increased volatility in the price of food would mean that people would need to increase their margin on their food budgets to appropriate money for a risk premium. That would significantly increase domestic unrest.

    As Billmon points out, we're already headed toward a locked political struggle to the death.
    The Kerry crew's happy willingness to adopt and adapt a winning play from the GOP's 2000 playbook may also support Mickey Kaus's theory for why the two parties are locked at rough parity. In an intensively competitive arena, in which the tools of modern mass marketing are far more important than ideology or even patronage, neither party can gain a lasting edge without seeing its best sales ideas stolen by the other. Do the voters seem to like moderate Southern governors with a folksy charm? Hey, our guy is like that! (or at least, can be repackaged that way.) Does unleashing the attack dogs and then waiving the olive branch work? Well, we can do that, too!

    This raises the prospect of an even deeper deadlock, in which presidents are first weakened by relentless partisan attacks from the other party's base, then defeated by false promises of bipartisan unity from the other's side marketing maestros. And every four or eight years the two sides wil change places and repeat the cycle.

    This is not, to say the least, a healthy political model for a troubled superpower with enormous foreign policy problems and some equally enormous economic and financial problems waiting just down the road. However, it seems to be the kind of politics we are going to get.

    At best I think we're going to get a political stalemate while the country staggers toward bankruptcy. Otherwise we could see a civil war. We are about to live in some very interesting times indeed.


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