By Peter Allgeier - 07/14/11 11:09 PM EDT
Nov. 14 will be the 10th anniversary of the launch of the Doha Round of multilateral trade negotiations in the World Trade Organization (WTO), but it has become obvious, even to true believers, that the round will not be concluded in the near future, at least not in the form envisioned in 2001. In Geneva, delegations sensibly have begun to explore the possibility of a “December Package” that could be adopted at the eighth WTO Ministerial Conference this December. The Congress and the administration, however, need to make clear now that they are serious about achieving a meaningful package. We need such a package to promote American competitiveness and to assert U.S. leadership in the international economy. Unfortunately, most of our trading partners doubt that the U.S. cares about any Doha outcome. They perceive the sum total of American trade policy to be internal debates about implementing five-year-old free-trade agreements (FTA) agreements and initiating a regional trade negotiation with four existing FTA partners and four lesser trading partners
Why should there be a December package? First, there is an impasse in market access issues between the major developed countries and the large emerging economies of China, Brazil, India and South Africa. This impasse is reflective of a larger phenomenon: what additional responsibilities do the emerging economies have to undertake in return for having a greater role in international decision-making? The two sides have not been able to agree on that price in the WTO and are not likely to agree in the near future. In the meantime, there are a number of areas in which there has been substantial progress that could be harvested by the end of the year if members were intent on doing so. Second, the WTO needs some tangible negotiating success to raise its credibility and the world’s confidence in its ability to open markets further and to address the trade issues of this decade and beyond.
The starting point should be the conclusion of the trade facilitation negotiations. These are customs procedures that would benefit all countries, including developing countries that want to plug into international supply chains and attract investment. This should be accompanied, at a minimum, by a “no rollback” pledge on market access for the services that are crucial to supply chains, such as express delivery and logistics.
Second, there should be an agricultural component. Possibilities include elimination of agricultural export subsidies (also promised at Hong Kong by the European Union), discipline on export credits and new rules for food aid.
Third, there needs to be an agreement — probably only a plurilateral agreement is possible — on duty-free treatment for environmental goods.
Fourth, the WTO needs to demonstrate its ability to deal meaningfully with trade and environment. The best way to do that by December is to adopt disciplines on the subsidies that governments give to their fishing fleets, which have contributed significantly to depleted fish stocks in most of the world’s oceans. The place to start is with a prohibition on fuel subsidies and subsidies for fishing-vessel construction.
Fifth, there are a number of non-tariff barriers in manufactures trade that are ripe for elimination.
Finally, there will have to be benefits for the least developed countries (LDCs), consisting of implementation of the duty-free quota-free treatment promised at the Hong Kong Ministerial in 2005, plus some meaningful step forward on lower cotton subsidies in the U.S. and improved market access and lower subsidies in China for cotton. The WTO members are insistent that this LDC component is a sine qua non of any December package.
This is indeed an ambitious package, but it is achievable if leaders are serious about their many pledges over the past several years. It would push the world trade agenda forward and would reconfirm the WTO as the dynamic and effective international institution governing world trade. It would provide important benefits for American competitiveness and would reaffirm our leadership in the world trading system. It would mark the first tangible step by the WTO to integrate trade and the environment. But it will happen only if the administration has the support of Congress to make the necessary changes in our trade policies toward the least developed countries and the cotton-producing African countries. A small price to pay for the benefits that we and the trading system would obtain.
Allgeier was deputy U.S. Trade Representative from 2001 to 2009 and U.S. ambassador to the World Trade Organization from 2005 to 2009.