- The Washington Times - Sunday, January 25, 2004

A number of factors are conspiring against a successful global trade round, among them growing protectionism in America and the strength of the European farm lobby. Still, key countries are changing their tone about the global trade round, expressing a growing determination to ramp up negotiations after the September breakdown in Cancun, Mexico.

But unlikely parties have been sounding an alarm about negative perceptions of free trade. “Some clouds of emerging protectionism have become increasingly visible on today’s horizon,” Federal Reserve Chairman Alan Greenspan said in a speech in Berlin last week. He stated that “it is imperative that creeping protectionism be thwarted and reversed.”

It appears that governments around the world are recognizing this imperative and are trying to reinvigorate talks. Given the timetable for negotiations, elections don’t really threaten a deal, since talks aren’t slated to conclude until the end of the year. Furthermore, many observers don’t expect the World Trade Organization (WTO) round to be nearly as politically charged in the United States as bilateral and regional trade deals, such as the almost-signed agreement with Central American countries, which is expected to be a lightning rod for political debate.

This expected focus in America on regional and bilateral trade accords makes success in the Doha trade round all the more important. Both Europe’s trade commissioner, Pascal Lamy, and India’s trade minister, Arun Jaitley, expressed this week their desire to see talks gain traction. This is particularly interesting, since the European Union and India were diametrically opposed to each other in the Cancun talks, with the Europeans and other industrialized countries stingily meting out concessions on agriculture, and India resisting reforms geared to make distribution of imported goods more fluid and government procurement more transparent.

The United States has also markedly changed its tone. While U.S. Trade Representative Robert Zoellick sided with the Europeans in Cancun and chastised developing countries for spoiling the round, a letter he dispatched last week explicitly addressed the concerns of poor countries. Mr. Zoellick said that the progress in the trade round couldn’t be made unless member countries were willing to agree on a definitive date for eliminating agricultural export subsidies. He also committed the United States to eliminating the subsidy component of agricultural export credit guarantee programs.

Mr. Zoellick hit the right notes with the letter and repositioned America as a proponent of reform. He also demonstrated a realistic vision for the trade round, recognizing implicitly that poor countries will be unwilling to aggressively reform if European and other countries lag on agriculture.

The trade round has yet to turn the corner, but WTO countries have voiced their unwillingness to see it expire. That new determination could help WTO members reach the mid-year deadline for setting a framework for talks.


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