One more time...

Another Doha "do or die" meeting of WTO member trade ministers next week (Are Doha doldrums doomed to deepen? , David Loyn, BBC News, June 19).  This may really be it, one way or the other.

And in some respects, things are getting off to a good start.  Last week President Bush weighed in, signaling the importance he places on an agreement, and suggesting a willingness to compromise: Bush weighs in on Doha Round .

Today Bush met with E.U. leaders at a summit in Vienna.  Daniel Dombey and Edward Alden report that he again suggested a willingness to compromise (Bush tries to repair battered US image, Financial Times, June 21):

Mr Bush made conciliatory gestures on trade, indicating he would try to find a compromise to prevent failure of the “Doha round” world trade talks.

US farm lobby groups and their congressional allies have been urging the administration to let the talks fail rather than accept a deal that does not offer big new export opportunities for US farmers, which would require significant additional concessions by the EU. But Mr Bush said the leaders had “very frank discussions” that acknowledged problems on both sides.

“My view is we can’t let the round fail,” he added in a comment that contrasted with that of Susan Schwab, his new trade representative, who said failure was better than a bad deal.

Martin Wolf has a Doha-column in yesterday's Financial Times: Ten days that could shake WTO (June 20 - subscription required).  Time is short, and failure would not only cost the world billions in potential benefits, but it could seriously damage the WTO itself.  What do we need for an agreement:

What are the obstacles to reaching the needed agreement by the end of next week? Citing Luiz Inácio Lula da Silva, Brazil’s president, in Montreal earlier this month, Mr Lamy pointed to a “triangle” that needs to include “bigger cuts in tariffs on agricultural products – and here the European Union, [which] has recently indicated a willingness to move, still has to submit a better offer; bigger cuts on agricultural subsidies – and here it is for the US to submit a better offer of subsidy cuts; bigger cuts in tariffs on industrial products and in this sector it is for emerging countries – Brazil, India, China and South Africa – to submit better offers, which they are presently considering”.

The EU, then, should offer better market access, the US should provide bigger cuts in domestic farm support and the big (I stress, big) emerging economies should accept substantially lower levels of bound tariffs (that is a fixed upper limit) on imports of other goods. Once all this has been agreed negotiators need to wrap up the negotiations on goods and make the needed progress in all the other areas before the end of the year.

What does it matter if the WTO is seriously damaged?

This would, in turn, carry at least three negative consequences; first, it would stimulate a further rush towards preferential trade agreements of all kinds, but particularly bilateral ones; second, this would increase the role of power in determining opportunities to trade, not least because hegemonic powers tend to create “hub and spoke” trade agreements with weaker partners; third, it would undermine a highly successful dispute settlement system, which has brought the rule of law into the heart of the world economy.

The WTO is no mere talking shop. It is far more potent than that. It has offered an outstanding example of successful global co-operation....

In Washington, Jagdish Bhagwati, the Columbia University trade economist, warned that the U.S. might be wiser to settle for a less ambitious agreement if that were necessary to seal a deal (US needs to "relax" in WTO talks: economist, Reuters, Doug Palmer, June 21):

The United States should "be more relaxed" and do whatever it can to reach a new world trade deal this year, even if it does not get everything it wants, a top trade economist said on Wednesday....

"Because after all, we are the big country which can provide leadership," Jagdish Bhagwati, a Columbia University professor of economics and law, said during a Cato Institute discussion on the troubled Doha round of world trade talks.

"Rather than try to collect as much as possible and being maximalist in our demands, ... (the United States should) be more relaxed, be more accommodating and settle the Doha Round," said Bhagwati, a leading free trade advocate....

Bhagwati said he was concerned new U.S. Trade Representative Susan Schwab was determined to push other countries farther than they may be able to go.

"Let's try to close the round, get as much as we can out of it all around, but not look for maximal concessions," Bhagwati said, arguing that many countries already are moving toward freer trade outside the confines of world trade talks.

From the story it sounds like Bhagwati thinks we may have to accept less in foreign agricultural tariff reductions that we would like.  It isn't clear if he discussed the politics of  what type of agreement might, or might not, make it through Congress.

Daniel Ikenson of the Cato Institute'c Center for Trade Policy Studies (CTPS) remains pessimistic about the likelihood of a good Doha outcome (same Cato event, same story):

Meanwhile, Daniel Ikenson, associate director of the Cato's Center for Trade Policy Studies, said he doubted countries would be to be able to get a deal. "The bottom line is there simply isn't enough interest," he said.

When the Doha round dies, the United States should not give up on trade liberalization but "go it alone" by unilaterally lowering tariffs and subsidies, Ikenson said.

Ikenson elaborates on his post-Doha strategy in this CTPS working paper: Leading the Way. How U.S.Trade Policy Can Overcome Doha's Failings .  From the abstract:

But increased trade does not require new trade agreements. Through unilateral liberalization, policymakers can achieve the U.S. objectives of the Doha Round: better opportunities for American businesses,more affordable products for consumers, improved prospects for farmers and producers in developing countries, alleviation of poverty, and greater international receptivity to U.S. policies.

He doesn't list the U.S. objective of prying open foreign markets for our farmers in this abstract, but I still have to read the article itself. 

I think we should reduce U.S. farm subsidies in the next farm bill.  And it could happen even if we don't reach an agreement in Doha.  Federal deficits may compel action, and my understanding is that many in liberal, church, and NGO circles are concerned about the impacts of these subsidies on developing world farmers. 

I wonder if the possibility that farm subsidies will be reduced (as a deficit-reduction policy), no matter what happens in Doha, reduces the incentives for our negotiating partners to make productive offers.