At VoxEU, Richard Baldwin and Fred Bergsten are debating the state of trade politics. Baldwin thinks that the Doha round is the greatest opportunity for meaningful increases in US exporters’ market access and is pessimistic about the outcomes of pursuing a series of bilateral trade deals. Fred Bergsten thinks that the Doha round is failing because it doesn’t offer meaningful market access improvements and defends the Free Trade Area of the Asia Pacific proposal.
Archive for the ‘WTO Negotiations’ Category
The politics of the Doha round and US PTAs
Wednesday, May 18th, 2011
Baldwin & Evenett: Don’t delay Doha
Thursday, April 28th, 2011VoxEU has a new eBook out today on “Why World Leaders Must Resist the False Promise of Another Doha Delay”, with contributions from a number of trade scholars.
Whither Doha?
Sunday, April 17th, 2011Simon Evenett on “saving the WTO from the Doha Round“.
Preferential trade and economic efficiency
Saturday, March 5th, 2011Daniel Altman makes (what I believe is) a novel claim:
Already, we’ve seen rich and poor countries shifting their attention to regional trade deals. Diverse groups of countries can do a lot by trading amongst themselves, exploiting differences in costs, resources, and technologies. Pretty soon, we should see a few large regional blocs dominating global trade. The ones that lower trade barriers faster will grow faster, too. In these cases, the poorer countries would be expected to catch up to the richer ones. When that happens, the wealthier blocs will start to look at the blocs that lagged behind for new trading relationships, and the barriers will start to fall between the blocs. In the end, we’ll have something very close to a global trade deal – and we will have arrived at that deal in a much more organic, economically efficient way. [emphasis added]
Yes, preferential trade is an importance force shaping the WTO talks. Yes, preferential trade is more politically palatable than multilateralism. But more economically efficient?
Most who are relatively optimistic about the dynamics of preferential trade don’t claim it’s the best path (Baldwin: “(1) Regionalism is here to stay; world trade is regulated by a motley assortment of unilateral, bilateral and multilateral trade agreements; (2) this motley assortment is not the best way to organise world trade”). How would large trade blocs be more economically efficient than a global trade deal?
Will Doha conclude in 2011?
Thursday, March 3rd, 2011ECIPE is hosting an online symposium asking “Will the Doha round be concluded in 2011?”
Most of the answers are in the negative. Frank Lavin simply says: “No“, because the political will isn’t present. Claude Barfield says that the recent flurry of activity in Geneva hasn’t been matched by an uptick in interest in Washington, though the Obama administration could always shift its position.
Jeff Schott, whose piece carries the most optimistic headline, “Substantial progress can be made“, writes:
Substantial progress can be made in 2011 on a Doha Round agreement. Even under the best of circumstances, however, the end game negotiations could not be concluded this year.
The reason for this downbeat assessment is simple. Despite the positive charge from G-20 leaders in Seoul last November, and despite technical work undertaken by Geneva officials since then, the major trading nations have not yet begun to negotiate with each other.
Obama on PTAs with Korea, Colombia, and Panama
Tuesday, February 8th, 2011Yesterday, President Obama said at the Chamber of Commerce:
We finalized a trade agreement with South Korea that will support at least 70,000 American jobs. And by the way, it’s a deal that has unprecedented support from business and labor, Democrats and Republicans. That’s the kind of deal that I will be looking for as we pursue trade agreements with Panama and Colombia, as we work to bring Russia into the international trading system.
Keith Hennessey, Director of the NEC under President Bush, says:
The problem is that the U.S. already has trade agreements with Panama and Colombia. The President is in reality saying that he is undoing those deals… When President Obama arrived, he said the South Korea FTA negotiated during the Bush Administration was a bad deal for the United States. Rather than submitting it to Congress for approval, he directed his USTR Ron Kirk to renegotiate certain parts of it with the Koreans… We see from yesterday’s remarks that the President wants this to be the model for future trade agreements. This gives labor unions and their Congressional allies tremendous leverage to water down or even block FTAs they don’t like.
That’s one interpretation of the remarks. It’ll be interesting to see what the administration actually does on trade going forward. Given the relative economic unimportance of these PTAs, I think the efforts to wrap up the WTO’s Doha negotiations this year may be more interesting.
Doha at Davos: WTO negotiations back on the global stage
Friday, January 28th, 2011Remember those WTO negotiations called the Doha round? They’re back!
In November, Germany, the U.K., Indonesia, and Turkey commissioned Peter Sutherland and Jagdish Bhagwati to co-chair a report on the Doha negotiations and their future. Its release (pdf) this afternoon, coupled with informal talks by 25-30 trade ministers (UPDATE: more details from WSJ) at the Davos festivities, has people talking about the Doha round’s prospects in 2011. The report provocatively calls for a deadline to the negotiations, saying that:
No individual player is willing to be the first to declare the Round moribund, knowing that they will then be accused of precipitating its demise. At the same time, there is not sufficient political momentum to push for a final deal. The only way to change this is to make the prospect of failure concrete, collective and unavoidable. At the G20 level political leaders should set themselves a deadline within 2011 by which the Round must be completed or declared a failure. This deadline should be inflexible and bind all players at the level of Heads of Government.
Richard Baldwin, one of the members of the commission, thinks Doha is likely to succeed this year. His VoxEU column emphasizes US domestic political considerations in explaining the timing:
If the final Doha package is not before the US Congress by mid-2011, it will get caught up in the electoral cycle. Given the poisonous atmosphere on trade in the US – made much worse by high unemployment and Tea Party populism – the Obama Administration would most likely suspend further talks until 2013 at the earliest. This would pose a very real danger. If Doha were put on hold until 2013, there is a good chance that it would never get done.
At Davos, David Cameron and Angela Merkel are saying it’s time for Doha to be done. This is the most active discussion of the WTO negotiations in quite a while. Does it mean they’ll get the deal done?
Russian WTO accession update
Wednesday, December 22nd, 2010Russian recently struck a deal with the EU that makes the former’s accession to the WTO likely to occur in 2011. Russia is hoping to do so before July. Robert Amsterdam describes what may lie ahead:
The benefits of Russian entry, on one hand, are very positive. Moscow has agreed to phase out most of its export tariffs, including timber, which will certainly benefit the European community as a whole. Russia has also agreed to waive flyover royalties that it has imposed on international airlines for passing through Siberia en route to East Asia. Although this is a minor concession, it will still put an additional $400 million back in the hands of European carriers instead of the archaic Russian national airline Aeroflot.
On the other hand, Russia will eventually have to face other WTO members’ geopolitical concerns before accession. First off, Georgia will demand Russian withdrawal and cessation of support for breakaway provinces South Ossetia and Abkhazia. The 2008 War and Russia’s ongoing occupation of the territories in question will inevitably be a major topic of debate.
Another concern, in addition to Russia’s forceful reassertion over its traditional sphere of influence in Eastern Europe and Central Asia, is Russia’s ability or willingness to counter corruption in its government and business community. If China’s integration into the WTO since 2001 has been of any guidance, Russia’s entry should build anti-corruption measures and promote the international system’s benefits and openness to the Russian people. WTO membership is surely opposed by the more nefarious economic powers within Russia – admission to the organization will lead to more oversight and honest competition for services and products.
Here’s a 2006 post mentioning “Russia’s long-sought entry into the World Trade Organization”. Could we see both the Doha round and Russia’s membership finally conclude in 2011?
[HT: LWS]
Doha in 2011?
Sunday, December 19th, 2010At the Economist, Richard Baldwin suggests that the Doha round may be completed in 2011, saying that “conventional wisdom at the WTO is that we should see something this spring.”
What tariff lines do US PTAs liberalize?
Saturday, September 18th, 2010Marco Fugazza & Frédéric Robert-Nicoud look at the swiftness of US PTA tariff cuts:
This paper investigates the empirical relationship between cuts in MFN bound rates negotiated during the Uruguay Round of the GATT (1986-1994) and the depth and breadth of Preferential Trade Agreements signed in the aftermath of its completion. Our empirical investigation focuses on the United States using official tariff line level data. To the best of our knowledge, our paper is unique in looking at the causal relationship from multilateralism to regionalism. The existing empirical literature is exclusively looking at the relationship running the other way…
[T]he imports of goods that the US liberalises swiftly the most frequently on a preferential basis are also the goods for which it granted the boldest tariff cuts during the Uruguay Round…
In the US, resistance to preferential trade liberalisation (conditional on it taking place) cannot take the form of positive preferential tariffs for institutional reasons, as we explain in the data section of the paper. It can only take the form of delayed liberalisation. Therefore, our measure of the intensity of post-Uruguay Round preferential trade liberalisation (or ‘PTL’) for each good is the frequency at which the US grants immediate duty-free access to its market to its FTA trading partners…
We find that an increase in the tariff CUT of one percentage point is associated with an increase in the probability of the US granting immediate duty-free access to its market to all trade partners by about twenty-five percent at the sample mean. Given that the standard error for CUT in the sample is 4.34 percentage points, this is a large effect…
[W]e introduce the Uruguay Round MFN tariff rate as a control in all our regressions. The estimated coefficient is negative, implying that the US disproportionately grants duty free access to its market on a preferential basis for goods that have a low MFN tariff rate already.
The authors interpret their findings as showing a complementarity between multilateral and preferential trade negotiations.
