A Timely Reminder on Trade

From the Wall Street Journal’s ‘The Informed Reader’ blog today is a timely reminder that the stalled Doha round does not necessarily mean the end of trade liberalization efforts. According to the article, only 25 percent of tariff cuts between 1983 and 2003 were as a result of negotiated multilateral trade agreements. About 66 percent of tariff reductions came about from unilateral policy changes: from a recognition of the damage that tariffs do to one’s own economy through higher prices and lower productivity growth.

Unfortunately, there does not seem to be much political appetite for unilateral reductions in tariffs in the United States today (see here and here, for example) so a Doha agreement would have been welcome, to say the least. For one thing, subsidies (which are particularly prevalent in agricultural markets) are pretty much impossible to reduce on a bilateral or regional basis. But the expiration of trade promotion authority does not necessarily mean the end if lawmakers could get off the mercantalist bandwagon.