If you list the top 100 things President George W. Bush will complete before noon Jan. 20, the World Trade Organization’s Doha Development Round would fall somewhere after polishing his mountain bike and re-organizing his sock drawer.
The White House and Big Ag might place a trade deal slightly higher, say top 10. Both know, however, it’s a forlorn hope.
Completing Doha requires an ag deal and an ag deal is impossible because the White House is out of juice and Big Ag is out to lunch. After seven years of American bullying and bellyaching, no one in Geneva is buying anything either has to sell anymore.
On top of that, WTO watchers note, the White House has four (count ’em, four: Peru, Columbia, Panama and Korea) bilateral trade deals slowly dying in Congress and is so weak it never even asked Congress to renew fast track trade authority.
Big Ag, on the other hand, got everything it asked for in a 2008 Farm Bill without once mentioning Doha, the internationally recognized four-letter word for farm subsidy cuts.
WTO
Before we all gather on Halloween night to dance on Doha’s grave, though, boosters and bashers alike might consider that its death could lead to the demise of its sponsor, the 153-nation WTO. That would be a monumental mistake, suggests one of Doha’s harshest critics, Timothy A. Wise, deputy director of Tufts University’s Global Development and Environmental Institute.
The reason is simple, he offers. “It’s important, vital even, to have a multilateral set of rules for international trade,” Wise says from his Boston office. “We can disagree on what those rules should be — the Doha negotiations clearly showed that disagreement — but we need enforceable rules so global trade doesn’t devolve into survival of the fittest.”
Doha’s collapse was the “best result” this so-called development round could have delivered, he continues, because the world “was not forced to swallow a bad deal” that was of very little — in fact, microscopic — benefit to developing nations.
What if?
Just how microscopic? Using World Bank data from 2005, Wise calculates that a done Doha deal would have yielded a $75 billion gain in global ag trade by 2015. That’s an almost imperceptible 0.18 percent growth to ag trade a decade after the hard push by the WTO’s richest members.
Worse, Wise figures, $66 billion of the relatively puny $75 billion in growth, or 90 percent, would have landed in “high-income” countries like the U.S.
The remaining $9 billion did flow to developing countries but that worked out to be a benefit of “less than $2 per person per year” to those nations.
See why Doha cracked? Wise asks in a July 2008 paper titled “The Limited Promise of Agricultural Trade Liberalization.” (The paper and other Working Group research can be found at http://ase.tufts.edu/gdae/WorkingGroupAgric.htm)
“While trade theorists continue to refer to developing countries’ comparative advantages in agriculture,” he writes, simple math supplied by Doha’s most ardent supporters show that “rich countries dominate global agricultural trade.”
Big news
As such, the big news from the Doha Round’s results, Wise says, is that this math finally carried the day. And the really big news is that a “whole series of countries came together under the WTO” to make it happen. That’s why everyone, including American farmers, should continue to work for the WTO’s success despite Doha’s failure.
“In the WTO it’s still ‘one country, one vote,’” says Wise; everyone, big or small, is equal. And equality is a much preferred basis for global trade negotiations than survival of the fittest. Especially when you’re not as fit as you used to be. Just ask any American investment banker or soybean grower.
