More Bad News In The Effort To Secure Free Trade
When It Rains, It Pours
By Pejman Yousefzadeh Posted in Economy | Featured Stories — Comments (0) / Email this page » / Leave a comment »
The Doha Rounds just ended in disaster:
The chance of a global trade deal being clinched before President George W. Bush leaves the White House shrank dramatically on Thursday with talks between core negotiating partners collapsing again in division and acrimony.
In a near-exact repeat of events last summer, talks in Potsdam, Germany, between the four partners at the centre of the so-called Doha round of negotiations - the EU, US, Brazil and India - broke up with sides still far apart on cutting agricultural subsidies and goods tariffs.
The collapse makes it unlikely that an outline deal can be agreed before the summer, a step necessary to complete a detailed agreement by the end of the year. With the US presidential race starting in earnest next year, many in the talks believe the political sensitivities in any deal mean no agreement can be concluded until there is a new incumbent in the White House.
Kamal Nath, the Indian trade minister, accused the rich countries of arrogance and inflexibility. He told the Financial Times: "It is not just a question of figures. It is a question of attitude. The US does not realise that the world has changed." The US and the EU said Brazil and India offered no serious access to manufactured goods markets in return for proposed reductions in US farm subsidies and European agricultural tariffs.
I've argued in the past that I believe that the United States should unilaterally phase out farm subsidy distortions over a five year period, lest sanctions kick in and cause the U.S. to be limited in its use of farm policy tools. The more trade talks hinge on the issue of agricultural subsidies, the more compelling I believe this recommendation becomes.