How to Revive the Doha Round of Trade Talks

Susan Ariel Aaronson



Trade talks between the 150 members of the World Trade Organization, (WTO) broke down again last week. Disappointed trade negotiators left Geneva mumbling that that the Doha Round was at death’s door. But shrewd policymakers can turn this crisis into an opportunity. The Round can be revived if WTO members focus their efforts on a promise they made to developing countries: to place their needs and interests at the heart of their negotiating efforts.

The Doha Round was a product of public concern about poverty and terrorism. When the members of the WTO launched the round in November 2001, the delegates acknowledged a link between poverty, political and economic instability, and terrorism. They vowed to find ways to help citizens in the developing world reap the benefits of trade and promised to focus this round of trade talks on the problems and needs of developing countries.

But national policymakers did not alter their strategy for achieving trade liberalization. They proceeded as they had always done before. Instead of limiting the negotiations to the issues directly of interest to developing countries such as agricultural trade liberalization, market access, and trade facilitation, the members of the WTO agreed to discuss a much larger set of issues including services and competition policy. These officials presumed that the only way they could sell a new round to their constituents was to create a grand bargain: where local beneficiaries outnumber trade losers. But industrialized country demands rather than developing country needs became the focus of these talks. Not surprisingly, developing countries walked out at the Cancun Ministerial. When the talks recommenced, developing country officials were determined to ensure that this time the round would address their problems. Ever so gradually, the negotiators narrowed the purview of trade talks. Yet in 2004-2006, the negotiations again veered from the issues of immediate concern to many developing countries.

However, developing country policymakers held fast to a vision of a development round. That vision remains possible if the 150 member states agree to narrow their objectives and be honest about what that means for local producers and consumers.

First, in order to achieve a round centered on development, the industrialized countries must make a commitment to such a round and devise a strategy to achieve it. A true development round would focus on cutting barriers to trade for the goods and services developing countries export. It would mean postponing trade talks on key items of interest for many industrialized countries for another separate round. In addition, it could entail that industrialized countries reduce longstanding protection for influential special interests.

Thus, in order to achieve legislative support for such a new round, policymakers must make a different case for multilateral trade liberalization under the WTO. It will not be easy. In many countries policymakers defend trade talks by arguing that trade creates high wage jobs and yields domestic economic growth. But they barely explain how imports as well as exports stimulate economic growth. Moreover, by using mercantilist terminology, they have made it harder for their constituents to support bargains which require unsettling trade offs. They don’t defend the WTO by explaining how it creates global rule of law: regulating trade between nations with different economies, political systems and norms.

But it is possible to argue that a development round is in everyone’s interest. Citizens around the world recognize that trade is more effective at promoting growth than taxpayer funded foreign aid. A trade round is a cost effective way to achieve that growth. And that growth will not be confined to the developing world. As citizens in the developing world participate more in trade, these citizens will purchase more goods from other countries, including industrialized countries.

Trade liberalization under the WTO is a means to achieving a larger goal of sustainable economic development. If policymakers, particularly industrialized country policymakers, are more honest about that end, their citizens may be more willing to accept the sacrifices that may come by accepting more developing country imports. That is the only way to meet the promise WTO members made at Doha.

What’s Behind the Crisis in World Trade Talks? A Dishonest debate about What the WTO Does and Can Do

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100261.html

Comment on IHT: http://www.iht.com/articles/2006/07/02/business/wto.php

Almost 5 years after negotiators agreed to begin global trade talks, those talks have broken down. Negotiators left Geneva mumbling that they could still find future compromise, but the same negotiators admitted they didn’t know how to achieve such compromises. The round was supposed to meet the needs of developing countries, but WTO members are so diverse they can‘t even find agreement on what development means. See www.wto.org/english/news_e/news06_3/mod06-summary_01ju....
The WTO’s failure to achieve consensus on the modalities of the round is not just a problem of political will. WTO members have failed to build public understanding and ultimately public support for trade negotiations centered on development. In developing and industrialized countries alike, policymakers have been disingenuous about what the WTO does, how trade negotiations work, and how their citizens are affected by WTO rules. In many countries policymakers defend trade talks by argue that trade creates high wage jobs and yields domestic economic growth. But they barely explain how imports as well as exports stimulate economic growth. Moreover, by using mercantilist terminology, they have made it harder for their constituents to support grand bargains which require unsettling trade offs. They don’t defend the WTO by explaining how it creates global rule of law: regulating trade between nations with different economies, political systems and norms. Finally, they build support for trade negotiations on flawed arithmetic, betting that they can win support for a deal because their country will have more winners then losers. But that type of argument won’t work in a round that was supposed to be centered on development.
Trade liberalization under the WTO is a means to achieving a larger goal, sustainable development. If policymakers, particularly industrialized country policymakers in the U.S., EU, Europe. and Canada, are more honest about that end, their citizens may be more willing to accept the sacrifices that may come with more developing country imports. That is the only way forward to the grand bargain that the 150 nations of the WTO say that they want.



Susan Ariel Aaronson, Ph.D.
Susan Ariel Aaronson is Senior Fellow and Director of Globalization Studies at the Kenan Institute, Kenan Flagler Business School, and co-author of Righting Trade: Public Policies at the Intersection of Trade and Human Rights (forthcoming Cambridge University Press.), funded by the Levi-Strauss Foundation, Pfizer, Starbucks, Unilever and others. For information on the project and the book, Please visit the project web site at http://www.hr-t.projectspaces.com/codebase/myspaces/

widening the circle of elites who make trade policy

In the 19th and 20th centuries, trade policy was the turf of a select few policymakers, business, agricultural and labor leaders, and academics. But in recent years, policymakers in many countries have wideneed the circle of elites making trade policy. We examined trade policymaking in the US, EU, South Africa, and Brazil. We found that although more people have a chance to be heard, policymakers in the world's most influential trading nations are not always listening. New ideas and new voices are often crowded out by vested commercial and economic interests.
The attached charts describe how and by whom trade policy is made in these four trade powerhouses. The charts, designed for our new book, also illuminate some of the decision points where citizens can bring human rights into the debate over trade policy. For example, the US and the Eu have created dedicated (but not interactive) web sites to solicit public opinion about specific trade porposals or ongoing negotiations. However, we could not ascertain if and how they use these comments. Brazil and South Africa (like Canada, Mexico and other countries) have created citizen advisory committees comprised of representatives of civil society as well as business, labor and agriculture. These reforms should over time allow new issues, ideas and strategies to influence future trade policies.

This research will be published in "Righting Trade: Public Policies at the Intersection of Trade and Human Rights" forthcoming Cambridge University Press. pl. contact us at saaronson@kenan.org with questions and suggestions.

trade and human rights blog 2

In today's Washington Post, http://www.washingtonpost.com/wp-dyn/content/article/2005/06/20/AR2005062001177.html
EJ Dionne writes about Vice President Cheney's hypocracy regarding human rights. He notes that Cheney criticized President Putin of Russia but buddied upt to President Nursultan Nazarbayev of Kazahstan, who is equally undemocratic and repressive. Dionne notes that he recognizes that "foreign relations is a complicated business and the United States often has to work with unsavory regimes."

But Undersecretary Zoellick has posited a new paradigm for prodding such "unsavory regimes." Zoellick will testify tommorow at House International relations on how to encourage China to be a "responsible stakeholder in the global community." We'll be back to you tommorow about how this new paradigm might be applied to other nations such as Russia.

US policymakers need to remember that they can use the incentive of WTO membership to encourage Russia to move in a more positive direction.


Till then....
SA

trade and human rights blog

This week Vice President Dick Cheney warned that Russia was moving away from democracy towards autocracy. Yet the Bush Administration has seemed reluctant to use trade policy as a tool to encourage the Russians to maintain basic rights at home (such as freedom of speech and assembly, the right to information) and democratic rights abroad in former Soviet Countries. In the weeks to come, Congress is reviewing whether or not to grant Russia most favored nation status (now known as NTR). Russia needs NTR to accede to the WTO, and Russia really wants to join the WTO. If the Bush Administration acts creatively, it can find ways to work with Congress to obtain human rights action as a condition of NTR. While that has not been done in the past with NTR, why not think differently if human rights and democratization in Russia are an important US policy goal.

I welcome your comments.
Susan Ariel Aaronson, Ph.D.
Pl. visit our website, www.humanrights-trade.org for more information on how policymakers can promote human rights at they work to expand trade