I haven't posted about the WTO process in many moons, as it had exceeded my attention span, but perhaps some reference to still existing is warranted this week. As usual it takes a deadline or deadline missed to generate much measurable progress, but at least we have some interesting aspects to mention.
First, the EU is sending all kinds of mixed signals. Last week, f'rinstance, the French administration was adamant holding the line on concessions. Today the EU upped their offer.
The European Union (EU) has offered to cut its farm tariffs by 60% to kick-start trade talks in Geneva.
EU trade commissioner Peter Mandelson said this was the best offer yet from Brussels on the crucial farming issue.
Mr Mandelson urged emerging economies such as Brazil, India and China to reciprocate by slashing their industrial tariffs.
Meanwhile, the US trade chief vowed to help make the talks succeed if emerging nations made a contribution.
Rich versus poor
"When it comes to trade negotiations, the vast overwhelming contribution has to come from market liberalisation rather than the subsidy side," US trade representative Susan Schwab said. [More]
Meanwhile, the US is pinning much of their hopes on the power of China to bring emerging economies along to agreement.
US Trade Representative Susan Schwab said she was heading to the talks under the auspices of the World Trade Organization in Geneva "cautiously optimistic."While there could be a breakthrough many doubt our own Congress would approve it, especially if it requires as it almost certainly will, substantial subsidy reductions. I am less pessimistic about this outlook. With prices still pretty good and immense pressure from sectors in our economy like finance and manufacturing who badly need this agreement, the farm lobby may meet its match.
"Many of us feel a real sense of momentum," she said at a news conference, citing discussions with officials as they work to break the deadlock on the Doha Round, launched in the Qatari capital in November 2001.
But, she cautioned, "it's not the first time," recalling feeling the same way just before a similar effort -- talks between the US, the European Union, Brazil and India -- collapsed a year ago.
Schwab, who will lead the US team at a gathering of 30 ministers opening Monday, said the United States has "the intent and hope and expectations that there is a deal to be had."
"I think a deal is eminently doable ... it is doable next week," she said.
Still, emerging market economies must make "meaningful market-opening contributions" to achieve a successful outcome of the Doha Round, she said.
China, which joined the WTO in December 2001, just after the launch of the Doha Round, and has seen its exports explode under free trade, needs to show more leadership, Schwab said.
"China has a particular obligation to give back to the Doha Round" of WTO negotiations, she said, noting that China has reaped "hundreds of billions of dollars" since opening their trade system. [More]
It doesn't help that the recent Farm Bill left a bad taste in many mouths. Or that a food crisis has erupted in its wake, regardless of causes. Finally, the farm lobby here is badly splintered as a result of the ethanol/feed price controversy. The meat folks have nothing to lose by pushing for freer trade and much to gain.
I continue to be suckered into hoping for a WTO farm agreement. If it comes to pass, I think we will approve it over the outcry from subsidy proponents.