All things considered: February 2010

In the ninth year of the Doha trade negotiations ministers from 153
nations gathered in Geneva in early December and agreed – wait for it –
that there should be a “stock-taking” meeting in March.

In the ninth year of the Doha trade negotiations ministers from 153 nations gathered in Geneva in early December and agreed – wait for it – that there should be a “stock-taking” meeting in March.

In other words, after nine years the best they could come up with is a meeting to assess where they are at. That may seem a cynical assessment but it pales in comparison to the anonymous comment of one participant.

“Perhaps this was much ado about nothing,” he observed. Then he added: “The mountain has trembled, and delivered a small rat.”

I’m not entirely sure what the rat reference means, but it certainly sounds scathing.

As for the future of supply management, it may have come up in the backrooms, but doesn’t appear to have been a factor in the “much ado about nothing.”

I’m sure it will disappoint the Canadian navel gazers who contend that Canada’s refusal to sacrifice supply management is jeopardizing the talks, but the talks are staggering under the weight of major differences between developed and developing countries.

They involve increased access to large developing economies like Brazil and China and reductions in U.S. cotton subsidies.

Chicken, eggs, turkey and Canada aren’t even worth a mention given the scope and scale of those issues.

But this rat may still have some teeth. A report from Reuters describes a notion of some nations to break the negotiations into bite-sized morsels. The idea seems to be that if agreement can’t be reached on everything maybe the talks should aim at agreement on something.

This could be bad news for the Canadian Wheat Board. Everyone except Canada agrees that state trading agencies should disappear. Since the wheat board is the only state trading agency up for discussion it is an easy one. The only similar agency is a New Zealand kiwi fruit board. But it was declared exempt while a New Zealander was heading up the negotiations. (Funny how that happened.)

Another bit for the rat to gnaw on could be supply management. The count on that one seems to be 151 to two or maybe 150 to three, with Canada worried about poultry and dairy and Japan concerned about protecting rice producers.

There may be another country or two sitting in the wings, but Canadian negotiators have been pretty lonely.

Interestingly, the country most publicly skeptical about negotiating a bunch of small deals instead of one big one is the United States. Its negotiator pretty much scoffed at the idea.

Some historian is likely going to have a grand time figuring out what the Americans were up to over the past nine years. It’s obvious they want greater access to markets in developing nations while protecting their own politically and economically sensitive sectors like cotton, sugar, steel, technology and a few more.

This puts the world’s largest economy in the unenviable position of being unable to lead, incapable of following and unwilling to get out of the way.

It also faces stiff and rising opposition to trade deals from its citizens. Large numbers, including some influential politicians, don’t like NAFTA or the WTO.
They don’t even like small bilateral deals with tiny Central American nations.
They also have other issues that loom much larger than some out of sight, out of mind talks in Geneva. Afghanistan, Iraq, health care, a fragile economy and even Tiger Woods are of greater importance.

By the time some of these are sorted out (or not) most of Washington will be back on the campaign trail. The last thing the politicians will want to talk about and voters will want to hear about is an impossible to explain in detail trade deal that could hurt some a lot and perhaps benefit many a little.

Given all that it is unlikely the U.S administration will bring a WTO agreement to the U.S. Senate for ratification in 2011 or 2012. There would be too much grief for too little gain.  

As for the rest of the world it hasn’t given up, but it is moving on. Almost two dozen developing nations recently announced their own deal that will reduce tariffs on one other’s products. Canada and the EU are beavering away at a bilateral deal.

In March, there is to be that taking stock exercise in Geneva. Maybe it will announce a breakthrough and come up with another set of modalities and a new deadline. Certainly, many WTO officials would like that. But the hamster on a wheel routine that they’ve been perfecting must be getting tiresome.