More Reasons for Saving Doha

By September 24, 2007Trade

Stuart Eizenstadt and Hugo Paemen, co-chairmen of the European-American Business Council, have an op-ed in today’s Washington Post that argues for completion of the Doha Round of the WTO negotiations as a means to encourage development of the Third World, and they warn Doha’s failure could lead to the collapse of the multilateral trade system.

There are many reasons for the impasse. Agriculture, the most politically sensitive trade issue, is at the core of negotiations, and implementing a “development agenda” in the context of trade talks has proved difficult. There are new players, and the key emerging countries have refused to allow the United States and the European Union to cut a deal and impose it on them.

But despite all the fits and starts, the countries are much closer to the parameters of an agreement than it might appear. A few billion dollars of additional reductions in E.U. agricultural tariffs and U.S. agricultural subsidies would put Brazil, India and the developing world to the test of addressing their high industrial tariffs by binding their actual applied rates so they can never be raised, shaving their highest “bound” tariff rates and allowing greater access for key service industries in developed nations. The problem is the lack of political will from all key countries to go the last mile.

The NAM’s position is that agricultural holds a disproportionate influence over multilateral trade negotiations; the U.S. manufacturing sector exports more in a month than the ag sector does in a year. Eizenstadt and Paemen are right:

[The] talks are unlikely to be successful without an additional push at the top. The major players will not do what they know needs to be done unless everyone moves together. The United States and the European Union need to make one last effort to reduce their agricultural subsidies; Brazil needs to reduce its industrial tariff barriers; India must be willing to open its agricultural market; and G-20 members must recognize their responsibilities to open their markets.

We would add one more act for Congress to undertake: Reauthorize Trade Promotion Authority for the Administration — if only for Doha, that’s all right — to demonstrate U.S. seriousness in the talks. The growth of exports is keeping the U.S. economy strong, and lowering tariff barriers through a successful Doha round moves us forward.

Leave a Reply