Trade junkies will have already read countless articles about the all-but-certain failure of the Doha round of trade talks, so I won’t add to the pile. Nor will I spoil the fun of reading my op-ed in today’s Washington Times (note to the observant: the lede grew stale while the piece awaited publication) on the myriad reasons why failure is such a shame.
But there is more going on in trade circles than the Doha round. Here’s a digest of other developments, some good and some not so good:
- Firstly, the United States is hoping to conclude a bilateral agreement with Russia on its entry into the WTO, hopefully in time for a great photo opportunity on the margins of the G8 summit in St. Petersburg this weekend. (My colleague Ian Vazquez argues that the summit could in fact yield little else of value.) Of all the countries awaiting WTO accession, Russia is by far the largest and its inclusion would bring 99% of world trade under the WTO’s auspices. Several U.S. business groups have publicly objected to, among other things, Russia’s treatment of intellectual property rights. But surely bringing Russia into the fold, and under the rules, of the WTO would improve the ability of members to ensure Russia’s trade policies are up to scratch.
- This week in Seoul, the United States and South Korea held the second round of negotiations on a possible free trade agreement (and I use that term very cautiously). Unfortunately, the talks ended early after a dust-up over pharmaceuticals. Before then, the usual South Korean rent-a-crowd of protesters had come out in force against any agreement. One of the main sticking points is agricultural trade, particularly rice, which is highly protected in South Korea.
- In what may be just a tactical move to scare other WTO negotiators, the EU this week raised the possibility of more preferential trade deals (link requires subscription), with or without a successful conclusion to the Doha round. That is worrisome news. The bigger the players that make these agreements, the larger the damage to the global trading system. Partly in reference to the difficulty of a deal with the United States, a Korean research center has suggested that it would be easier to make a bilateral deal with the EU than with the United States, presumably because such a deal would exclude a large number of agricultural products from liberalization. South Korea and the EU will find a lot of common ground when it comes to protecting agriculture, but an easy agreement does not necessarily a good agreement make.
- And, on a related and somewhat cheerier note, the WTO members did manage to reach one deal this week as part of the Doha talks: they agreed on disciplines (mainly relating to transparency and early reporting) on preferential deals. Almost all WTO members are parties to one or more preferential deals, but the previous process of approving them has been so jammed that only one of those deals (out of almost 200) has been approved by the WTO. A bit of transparency in this area can only be a good thing, and should limit the damage that low quality, trade distorting preferential agreements can do. Of course, the approval of the new ‘transparency mechanism’ is only provisional and could all come unstuck should the final death knells ring for Doha. Plus ça change…