Sunday, July 02, 2006

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

Comment on IHT:

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
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

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