Unlike Mark Twain’s quip upon reading his obituary, my early July “RIP Doha” column was neither premature nor exaggerated.
On July 24, Pascal Lamy, the World Trade Organization’s director-general, formally pulled the plug on the global trade talks after another last ditch meeting collapsed into recriminations.
Anatomy of collapse. Lamy had gathered the WTO’s Big Six – the U.S., the European Union, Brazil, India, Japan and Australia – in Geneva for talks July 23. No talking ensued so he sent all packing the next day.
Minutes thereafter, though, the trade reps began talking into microphones and television cameras.
The boys from Brazil, the EU and India agreed that U.S. Trade Rep. Susan Schwab and U.S. Secretary of Agriculture Mike Johanns caused the crack-up when the Americans stuck to their U.S.-farm-cuts-for-global-market-access negotiating strategy.
The offer, as in the past, went nowhere because it contains big subsidy loopholes for American farmers.
Brazil, India, and the EU were – are – unwilling to open their markets until the U.S. closes the gaps.
Producing spin. In the U.S. post-meeting press conference, a reporter challenged Johanns to explain that offer, an offer the reporter characterized as America’s “maximalist agenda on market access (that) does not quite match with your minimalist agenda on the trade-distorting domestic support.”
Johanns, according to USDA’s transcript of the news conference, gave a technical reply that contained some shocking news for American farmers.
“When we were out there talking to our colleagues around the world about what they thought we should do in terms of our proposal,” he explained, “some said you’ve got to cut your Amber Box” – a WTO-legal device where most nations park their trade-distorting domestic farm subsidies – “by 50 percent; some said you’ve got to cut your Amber Box by 55 percent.
Exceeding requirements.“We consulted with Congress, our commodity groups, our President, and we decided that we should cut our programs by 60 percent in the Amber Box.
“Now what’s the bottom line, ladies and gentlemen? That eliminates those programs. They don’t fit anymore.
“Our farm program has just disappeared because there is no other way you can pigeon-hole our programs into any other areas.” (Emphasis added.)
Megacuts. The current American WTO proposal “eliminates” U.S. farm programs? Evidently, and Johanns continued, “There was a lot of uneasiness that we might take our counter-cyclical program” – another American farm subsidy scheme should domestic prices fall below prescribed 2002 Farm Bill levels – “and slide it over to the Blue Box,” a WTO-legal category for less-distortive ag subsidies.
But, the secretary continued, “We said to ourselves, the world needs greater leadership than that, and we literally cut it to a point where we can’t fit our counter-cyclical program into the Blue Box.
Houdini act. “Another piece of our program just disappeared