The Doha flip flop

More a flop than a flip, though.

“Siamo molto preoccupati per la sospensione del Doha round perché si profila un fallimento che rischia di mettere in ginocchio il Wto e le regole stesse che governano il commercio internazionale”. È quanto afferma Emma Bonino, Ministro per il Commercio Internazionale e per le Politiche Europee commentando il mancato raggiungimento di un accordo sull’agenda di Doha. Nell’esprimere appoggio alla linea del Commissario Peter Mandelson, il ministro Bonino giudica “fondamentale per l’Italia e per l’Europa non perdere le speranza, semmai fondamentale è giungere ad un’intesa, perché, a causa della regola del single-undertaking tutto quello che si è già negoziato si perderebbe. E per noi, per l’Italia e per l’Europa, perdere il già siglato, è davvero molto complicato in termini economici”. “Se l’accordo non venisse raggiunto, e per questo ritengo che non bisogna arrendersi – aggiunge il Ministro – il sistema commerciale internazionale andrebbe incontro a una fase di pericolosa instabilità. Si metterebbe in discussione la via del multilateralismo a favore di iniziative bilaterali, anche a livello regionale, di fatto riducendo così la forza negoziale dell’Italia e dell’Europa”. “C’è da chiedersi” conclude Bonino “cosa rimane del titolo Doha, un'agenda per lo sviluppo, se a perderci sono soprattutto i Paesi in via di Sviluppo”.

End the lie, rejoice in cheap imports

By Edward Graham

Published in the Financial Times, July 21 2006

The meeting of the world's trade ministers that ended on July 1 was meant to break the deadlock in the World Trade Organisation Doha round of negotiations but largely ended in failure. Ministers will try again next week but deadlock has pretty much marked all other such meetings over the past two years or so. These failures have not triggered discernible public clamour anywhere for the ministers to get the job done. This is perhaps not surprising from a public that seems more concerned with the foibles of film industry celebrities than a round of trade negotiations. Even so, it is worth asking why people, globally, seem so indifferent to the WTO negotiations; the public, after all stands to lose something like $287bn in possible gains from a successful negotiation.*

One possible reason for public indifference is that we have reached a point where the process of trade negotiations has become obsolete. This process has entailed telling the public what amounts to a massive lie, notably that the benefits from expanded trade are, for any nation, from expanded exports, but that these come at a necessary "cost" of expanded imports. This has been a useful lie, because it enables trade negotiators to rally constituencies that actually do benefit from expanded exports - that is, the export-oriented sectors in each country and the workers employed by these sectors - to support the outcome of the negotiations. These constituencies then serve as a counterweight on the political playing field to import-competing sectors that stand to lose from expanded trade. Indeed, the conclusion of the Uruguay round of multilateral negotiations in late 1994 was enabled by export-oriented groups, joined by companies with strong interest in the new intellectual property protection created in the trade round. They, effectively generated political demand to break deadlocks on some key issues.