Ben Muse

Doha Round Status Report

The Doha negotiations were reinitiated last month, after being suspended last July.  The Government Accountability Office (GAO) has released a status report:  Congress Faces Key Decisions as Efforts to Reach Doha Agreement Intensify (GAO, March 2007, GAO-07-379).

The GAO sought to answer three questions in this 65 page report:

(1) the overall status of the Doha Round negotiations now and the progress that had been made prior to and since the breakdown of the talks, (2) the substantive divisions among key WTO members that led to an environment of deadlock and the eventual suspension of the negotiations, and (3) the possible economic and other ramifications if the round is not concluded satisfactorily.

At this point:

Canada's corn complaint

Canadian corn farmers think the U.S. unfairly subsidizes its corn farmers.  In early January, Canada requested consultations with the United States on this issue under the WTO's dispute settlement process.  The request has implications for the Doha Round, and the upcoming U.S. farm bill.

Jeanne Grimmett goes over the details of the WTO dispute settlement process: Dispute Settlement in the World Trade Organization: An Overview (CRS, January 29, 2007).

Randy Schnepf lays out the background to and issues in the Canadian corn case in the Congressional Reserach Service (CRS) report: U.S.-Canada WTO Corn Trade Dispute  (January 31, 2007).

FarmPolicy.com

The blog  FarmPolicy.com will be useful if you are interested in the Doha Round, the upcoming Farm Bill, or other agriculture and trade-related issues:

Doha Partners Underwhelmed by Administration Farm Bill Proposals

The Bush Administration released its proposals for the 2007 Farm Bill today: Bush Farm Proposal May Snag On Congressional Roadblocks (Greg Hitt, Wall Street Journal, Feb 1):

Congress and "zeroing"

John Miller reports in Wednesday's Wall Street Journal that efforts to wake up the Doha Round are likely to be a non-starter: Doha Revival Talks Are Set, But Accord Is Unlikely (January 24):

Global trade negotiators hope to restart the Doha round of world trade talks at the World Economic Forum in Davos, Switzerland, this week, but a return to the bargaining table will likely be more symbol than substance.

The key players -- the U.S. and the European Union -- remain unwilling to cut farm subsidies enough to satisfy emerging economies like Brazil and India....

Mr. Mandelson proposes a 54% cut in agriculture import tariffs. France, Europe's largest agriculture producer, wants to cut tariffs by just 39% -- and isn't budging. Without France there is no deal: Mr. Mandelson needs support from all 27 EU members in order to reach a global trade deal.

Dan Ikenson of Cato's Center for Trade Policy Studies won't be too worried if the Doha princess sleeps for years to come.  Trade is Much Bigger Than the Doha Round (CATO at Liberty, January 22)

Waking the Sleeping Doha Beauty

The Financial Times reports that it just may happen:  US and EU near agriculture trade deal (Eoin Callan and Alan Beattie, Jan 21).  Lots of parties need to be brought on board:

The EU:

The deal that has been taking shape behind closed doors includes a proposal by Brussels to cut barriers to foreign agricultural products by an average of at least 54 per cent...

The US:

...a conditional offer by the US to lower the ceiling on its domestic farm subsidies to close to $17bn (€13.1bn, £8.6bn).

The previous U.S. offer, a cap at $22.5 billion (about a 50% cap decrease) was larger than the $19.7 billion actually spent in 2005.  So this new proposal would actually limit U.S. subsidies.

The French:

Both sides are also aware that the provisional EU offer on tariff cuts could lapse under the strain of opposition from Paris, which has demanded that the farm talks in Doha be put on the agenda of the meeting of EU agriculture ministers next Monday.

The U.S. Congress (who will have to give the Bush Administration an extension of its Trade Promotion Authority):

The Bush administration has also met key figures on Capitol Hill who will shape policy on agriculture and trade under the new Democratic leadership of Congress. But it is likely to take weeks to establish whether Congress would consider renewing President George W. Bush’s trade promotion authority – which expires in six months and is needed to complete a deal.

These approaches included an appeal to Collin Peterson, the influential chairman of the agriculture committee in the House of Representatives, to tone down his opposition to the renewal of trade promotion authority.

The congressman said after the meeting that he remained deeply critical of US trade policy but was not determined to wreck a Doha deal that included meaningful benefits for US farmers.

Brazil and India:

Any agreement is also contingent on reciprocal concessions by Brazil and India on lowering barriers to trade in industrial goods and services – which are still under negotiation... Brazil has been negotiating separately with the US and EU and dispatched a senior diplomat to Delhi over the weekend to try to broker a common position

For quick background, take a look at Sandra Polaski's paper, Breaking the Doha Deadlock. Congress Could Play a Pivotal Role. (Carnegie Institute, January 2007).  Polaski is Director of the Trade, Equity, and Development Project at the Carnegie Endowment for International Peace.  She argues that a U.S. "maximalist" negotiating position in the early summer of 2006 was the key reason for the suspension of negotiations.  The U.S. needs to accept lower limits on its agricultural subsidies, and give developing nations more scope for protecting weak agricultural sectors.  This she says, and I agree, would be good domestic, foreign, agricultural, and trade, policy for the U.S. 

For more background, I'd also suggest a post by Iana Dreyer on the new globalisation blog, Global Conditions: Doha Round - Just Do It (Jan 18).  I learned about the Polaski paper from Dreyer.  Dreyer also draws on stories from recent articles in the International Centre for Trade and Sustainable Development (ICTSD) newsletter, Bridges. 

It turns out that "major commodity programs are highly regressive in the US"

Hertel, Keeney, Ivanic and Winters look at Distributional effects of WTO agricultural reforms in rich and poor countries (World Bank Policy Research Working Paper 4060, Nov 2006), and find:

Rich countries' agricultural trade policies are the battleground on which the future of the WTO's troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defenses is that they protect poor farmers. The authors' findings reject this claim.

The analysis uses detailed data on farm incomes to show that major commodity programs are highly regressive in the United States, and that the only serious losses under trade reform are among large, wealthy farmers in a few heavily protected subsectors. In contrast, analysis using household data from 15 developing countries indicates that reforming rich countries' agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households.

Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protect U.S. large farms from most of the rigors of adjustment. Finally, the analysis indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization.

How the President Got His Trade Promotion Authority

And why it was possible to launch the Doha round...

One of the most remarkable examples of the farm lobby's power came in 2001 and 2002, when the existing farm bill was written, expanding payments again over the opposition of the White House and key lawmakers. Reformers see it as a cautionary tale.

The architect of the legislation was Rep. Larry Combest, an aggie through and through, a West Texas Republican who came from three generations of cotton farmers and who took control of the House Agriculture Committee in 1999.

Others on Combest's committee included a cattle rancher and tobacco farmer from Tennessee, a Missouri corn and hog farmer, and a government-subsidized rice farmer from Arkansas. The ranking Democrat, Charles W. Stenholm of Texas, had an ownership interest in cotton farms that got more than $300,000 in subsidies between 2001 and 2005, USDA records show.

With help from a generous mandate from the House Budget Committee -- chaired by Jim Nussle (R-Iowa) -- Combest produced a new farm bill in 2001 authorizing an eye-popping $50 billion, 10-year increase in price supports and income supports for farmers. He boasted that the measure was "a major step away from Freedom to Farm."

For one thing, the bill restored a key pillar of the pre-1996 program: cash payments that compensate for low crop prices. Thousands of farms were eligible even if they never grew crops. Budget officials estimated that change alone would cost $37 billion over a decade.

The Bush White House disliked Combest's bill. Chief political adviser Karl Rove saw it as the antithesis of fiscal responsibility. "We're Republicans," aides remember Rove grumbling. The White House budget office issued a stinging critique, saying the bill was too costly and failed to help farmers most in need.

Combest also faced strong opposition from a disgruntled group of Eastern and Midwestern lawmakers, and from senators who wanted tighter limits on what a farm could collect each year.

But Combest had a strong hand. "He hijacked the process," said a former USDA official who spoke on the condition of anonymity because he still deals with Congress.

At a meeting in Rove's office soon after the Sept. 11, 2001, attacks, Combest delivered a warning, according to several people with knowledge of the session. Unless the administration backed off, Combest warned, he and his farm-bloc allies would sink a top priority of President Bush's: legislation giving the president a free hand to negotiate a global trade treaty strongly favored by big corporations. "You have to ease up," one participant remembers Combest saying.

Over the next several months, the administration laid off its public criticism of Combest's farm bill. Combest withdrew his opposition to trade-promotion authority, and it squeaked through the House by a single vote. He declined to comment for this article.

(Powerful Interests Ally to Restructure Agriculture Subsidies, Dan Morgan, Sarah Cohen and Gilbert M. Gaul, Washington Post, Dec 22).

Thanks to Jonathan Dingel and Daniel Drezner for the pointer.

How do you wake an enchanted princess?

Following the breakdown in negotiations on July 24, Pascal Lamy cast a spell, and put the Doha Round negotiations into an enchanted sleep: The "Sleeping Beauty" option (Ben Muse, July 24).

There's lots of talk now about how to wake them up.  The International Centre for Trade and Sustainable Development newsletter Bridges reports: Governments Exploring How To Restart Doha Round Talks (August 2)

Here's one scenario:

Following talks in Rio de Janeiro from 27-29 July, Schwab and Brazilian Foreign Minister Celso Amorim said that they were both committed to arriving at a far-reaching Doha Round agreement.

The US trade envoy, who will meet counterparts from around the world over the next few months, suggested that striking a deal in the next five to eight months remained possible. She said that she hoped to have a framework agreement ready by early 2007, which she could use to try to persuade Congress to extend the Bush administration's trade promotion authority. Due to expire at the end of June 2007, this mandate allows the administration to negotiate trade agreements and submit them to Congress for a take-it-or-leave-it vote. A short-term extension is thought to be more achievable than a wholescale renewal, particularly if an accord looks likely.

The Sleeping Beauty option

The Doha Round goes to sleep.  Perhaps to wake some day: Talks suspended. ‘Today there are only losers.’ (WTO, July 24).

How do you cast a sleeping spell on a trade negotiation:

What's at stake in the Doha cotton negotiations?

If the world got rid of its cotton tariffs, and export and production subsidies for cotton, it would be better off.  The Doha Round's "Cotton Initiative" could have a nice payoff.

Kym Anderson and Ernesto Valenzeula find that the world could be better off to the tune of about $280 million a year. (The World Trade Organization's Doha Cotton Initiative: A Tale of Two Issues, World Bank Policy Research Working Paper 3918, May 2006). 

Cotton exporters tend to gain, cotton importers tend to lose.  Several really poor countries in West Africa stand to gain a lot.

A boost for the Doha Round

The G-8 has given the Doha Round a helpful boost. 

Alan Beattie, Neil Buckley and Daniel Dombey report: Emergency talks on Doha follow Lamy warning (Financial Times, July 17).

Doha at the G-8

I don't think this: G-8 Leaders Give Lamy a Month for a New WTO Accord (Bloomberg, July 17):

Group of Eight leaders today called for a ``concerted effort'' to conclude five-year-old trade talks and gave World Trade Organization Director General Pascal Lamy another month to suggest a way to reach an agreement.

...will do as much good as this: Blair leads call for France to cut back farm subsidies (Larry Elliott, The Guardian, July 17):

Tony Blair was last night seeking to orchestrate concerted European pressure to prod a reluctant France into bigger cuts in farm protection as stalled global trade talks entered a make-or-break two weeks.

With the G8 due to hold discussions with five leading developing countries in St Petersburg today, Downing Street sources said the prime minister was "singing from the same song sheet" as the German chancellor, Angela Merkel, the Italian prime minister, Romano Prodi, and the EU commissioner, Jose Barroso.

Monday:

Heads of government from the world's eight leading industrial powers, in Russia will join their counterparts from Brazil, China, South Africa, Mexico and India tomorrow in an attempt to give momentum to the negotiations that started in Doha, Qatar in 2001. (Bloomberg story above)

The Doha Round: What happens now?

Apparently, at least for now, it's all up to Pascal Lamy.  The International Centre for Trade and Sustainable Development published a special edition of its newsletter, "Bridges," today. 

Here's their report on the plan for July:

What happened in Geneva last week?

What happened in Geneva last week?  Here are some useful summaries.

This Crowell and Mohring "Doha Developments Update" for June 23 has a lot of detail on the preparations, and often optimistic speculation, just before the meeting.

Martin Khor looked at a possible scenario for the Geneva meeting, just before: "Sequencing the Ministerial" and Scenarios of the Stages it has to Clear (Third World Network, June 28.  I found this very helpful.

This morning, the Third World Network has several other reports on the progress of the ministerial:

• Mini-Ministerial not legitimate, says NGO letter to Ministers (Kanaga Raja, June 27)
• Concerns on process and on 'real trade flows' on eve of Ministerial (Martin Khor, June 28)
• Lamy outlines process for 'mini-Ministerial' this week (Kanaga Raja, June 28)
• As Ministerial starts, the question is "Who will move first?" (Martin Khor, June 29)
• Mini-Ministerial becomes "Waiting for America" (Martin, Khor, July 3)

These reports have far more concrete detail than most news stories.

The International Centre for Trade and Sustainable Development has a special issue of "Bridges" out this morning, with an overview of events.  The entire text is below the fold.

The most entertaining headline on a recent WTO story...

is "Time Running Out for Jargon-Riddled WTO," on a funny story by Bradley Klapper (AP via chron.com, June 27)."    For the best weblog post title about the WTO see Daniel Drezner's post on Klapper's story.

Seriously decoupled subsidies

At least some U.S. farm subsidies are decoupled from production decisions.

Dan Morgan, Gilbert M. Gaul and Sarah Cohen report in this morning's Washington Post: Farm Program Pays $1.3 Billion to People Who Don't Farm:

Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.

Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice.

Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post....

Sunday: What next for Doha?

Where do the Doha Round negotiations go now, following yesterday's collapse of the meeting of WTO member trade ministers in Geneva?

Peter Mandelson, the E.U. Trade Commissioner, doesn't think we've reached the end of the Doha Round, yet (WTO talks neither "success or disaster" - Mandelson, Rueters via NDTV Profit.com, July 2):

Saturday: The Party is Over

The host went all out, but the guests had nothing to talk about, and everybody went home early.

Paul Blustein sums it up for Sunday's Washington Post: Trade Ministers Give Up on Compromise.  Geneva Conference Collapses Over Agricultural Tariffs and Subsidies. (July 2):

Friday in Geneva

As this sample of headlines suggests, there wasn't much progress today:

• Global trade talks stalled and on verge of collapsing. (James Kanter, International Herald Tribune);
• Lamy warns WTO talks face crisis (Richard Waddington and Sophie Walker, Reuters);
• WTO round on the ropes as ministers launch talks (Richard Waddington and William Schomberg, Reuters);
• WTO: Global trade talks at a crisis (Bangkok Post);
• WTO talks appear to be heading for failure (The Hindu);
• WTO nations at loggerheads over trade barriers (Jonathan Fowler, Mail and Guardian online, S. Africa);
• Divisions continue to hamper trade talks (AP via Boston Globe);
• WTO talks in crisis as US rejects farm suppport cuts (Shada Islam, Monsters and Critics);
• WTO talks fail to make breakthrough (Richard Waddington and Sophie Walker, Reuters).

Negotiators and trade ministers have been unable to break into the iron triangle of subsidy, ag tariff, and industrial goods tariff concessions.

The E.U. Trade Commissioner, Peter Mandelson, made some interesting comments about the "EU 'landing ground'" at an informal Trade Negotiating Committee (TNC) meeting this morning: Mandelson sets out EU “landing ground” for farm/manufacturing deal (June 30) - according to the abstract:

In it he sets out what the EU believes constitutes a realistic “landing zone” for the Doha negotiation on farm tariff cuts, trade-distorting farm subsidies and industrial tariff cuts.  He urges all sides to show further flexibility. Insisting that the EU will try to get as close as possible to the G20 proposal for farm tariff cuts, he says that the same level of ambition must also apply for US domestic trade-distorting farm subsidy cuts which must come down – not as far as to the $12 billion ceiling demanded by developing countries but “considerably”. Mandelson argues that a “real cuts for real cuts” scenario demands that such an agreement is completed by the G20 advanced developing countries offering
a formula for industrial tariff cuts with a coefficient of “15, not 20”.

For context, let me start by quoting WTO Director-General Pascal Lamy's comment on his perspective about the key to an agreement:

"If I was looking for a magic number . . . I would probably look around 20." He said this would mean the US adopting a $20bn ceiling for farm subsidies, developing countries cutting industrial tariffs to no more than 20 per cent and adoption of the G20's suggestion on farm tariffs.

The G20 proposal was an average cut of 54%, so Mandelson appears to be saying that, given conessions by its negotiating partners, the EU could move from its current offer of 39%, towards (but not to) 54%. 

This industrial tariff coefficient refers to the coefficient in a simple Swiss formula, which relates the original tariff to the new tariff.  The formula is:

New tariff = (C*"Old tariff") / (C+"old tariff"), where C is this coefficient of 15 or 20.  The larger the coefficient, the smaller the tariff reductions.

Internal conflicts are making it complicated to interpret the EU negotiating posture.  The Kantor story (Global trade talks stalled and on verge of collapsing.) in the list above, is very good, and provides details on the EU's difficulties:

Thursday in Geneva

This was the first day of the latest Doha Round meeting of the WTO trade ministers.  Today was meant to be a day for informal contacts between ministers and delegations, a day for coalition groupings to meet and discuss their plans.

A lot of discussion in recent days has focused on the so-called "triangular" approach to an agreement.  This involves (1) a reduction in U.S. agricultural subsidies, (2) a reduction in E.U. tariffs, and (3) a reduction in developing country industrial tariffs. 

On the 28th, WTO Director-General Pascal Lamy characterized this:

"If I was looking for a magic number . . . I would probably look around 20." He said this would mean the US adopting a $20bn ceiling for farm subsidies, developing countries cutting industrial tariffs to no more than 20 per cent and adoption of the G20's suggestion on farm tariffs.

The G20 agricultural tariff proposal is a 54% average reduction:

The US has proposed a 67 per cent average cut in farm tariffs, well above the EU's original 39 per cent offer and the 54 per cent suggested by the Group of 20 emerging market nations, including India. But two groups of nations with heavily protected farmers - the rich G10, including Japan and Switzerland, and the poorer G33, including India and Indonesia - have demanded exemptions for a range of products.

(Head of WTO outlines terms for possible Doha accord , Alan Beattie, Frances Williams and,Delphine Strauss, Financial Times, June 28)

A G6 meeting today between the key participants, the U.S., E.U., Japan, Australia, Brazil and India, doesn't appear to have been productive.  As reported in The Age (Deadlock continues in global trade talks , June 30):

The Doha Ministerial today

In yesterday's (June 28) Trade Negotiations Committee briefing, WTO Director-General Pascal Lamy indicated that Thursday "is left open for members to consult among themselves as many of their ministers and other delegates arrive in Geneva."  (Lamy outlines schedule for ‘moment-of-truth’ meetings , WTO, June 28)

The most detailed information I have on what might happen today, and why it may be important, is from this Martin Khor story Sequencing the WTO "Ministerial" and Scenarios of the Stages it has to Clear (Third World Network, June 27):

Lamy's plan

Pascal Lamy, the WTO Director-General,  described a preliminary schedule for this week's Doha Round negotiations today at an informal meeting of the WTO's Doha Round Trade Negotiations Committee (this is the committee established to oversee the Doha Round negotiations for the WTO).

The WTO web site has a press release,  and links to the text of his remarks and audio from the press conference that followed the meeting: Lamy outlines schedule for ‘moment-of-truth’ meetings (WTO website, June 28).

Here's the plan:

This week's Doha Round ministerial meeting

In a couple of days WTO trade ministers will gather to see if they can get the Doha Round trade negotiations moving.   

This week's object is to reach an agreement on sets of general principles or "modalities" for agricultural reform and industrial tariff reform.  The remainder of the year would then be barely enough time to fill in the details.

Two items the past week describe the mechanics of a meeting like this:

A 50-50 chance for Doha

The Australian Trade Minister, Mark Vaile, thinks the Doha Round has a 50-50 chance: Bush move gives Doha new life.  (Tim Colebatch and Orietta Guerrera, The Age, June 24):

The Bush Administration's recent efforts have been helpful, but:

What does the Doha Round have to offer?

The European Commission offers links to five studies of potential benefits from the Doha Round: Doha Round: Some Recent Economic Studies.

Links incude Anderson and Martin (World Bank); Polaski (Carnegie institute); Hertel and Keeney (Purdue University); CEPII (Paris leading institute in international economics); Copenhagen Economics; IFPRI (Washington based institute), Swedish National Board of Trade; Australian Productivity Commission, along with brief commentary.

Bhagwati & Ikenson

Jonathan Dingel went to yesterday's Cato Institute trade policy forum with Jagdish Bhagwati and Daniel Ikenson.  He reports over at Trade Diversion: Bhagwati & Ikenson on unilateral liberalization . 

Among other things, he provides an interesting insight into Bhagwati's perceptions of the difference between the approaches of former USTR Portman,  and our new USTR Schwab. 

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.

Bush weighs in on Doha Round

Last Thursday, President Bush weighed in on the importance of moving the Doha Round negotiations along - and appeared to indicate a willingness to make compromises if they were needed for a significant agreement.

Experts Pessimistic About Doha Round

Trade professionals aren't optimistic about the success of the Doha Round.

Andrew Stoler of the Institute for International Business, Economics & Law at the University of Adelaide surveyed 100 trade professionals "negotiators, policy-makers and experts from both developed and developing countries located in Geneva and key capital cities around the world..." in late May and early June:

Lamy's Doha plan

Pascal Lamy has a plan to get a Doha agreement.  Here (as reported recently in Bridges) it is:

The costs of extending the current farm bill

The debate over the next U.S. farm bill is beginning.  This will have important implications for trade.  Improved access by U.S. farmers to foreign markets may depend on our  ability to rein in subsidies in this bill.

The Cato Institute' Center for Trade Policy Studies is gearing up for the debate.  One of their first steps has been to take on economist Sallie James as a new trade analyst.  James will be responsible for analyzing the costs of current U.S. subsidies, both to U.S. citizens and to persons in other countries.   She's got the qualifications:

A break in Doha Round negotiations?

Allan Beattie and Tobias Buck report that the E.U. may be signalling a willingness to make a further concession on agriculture:  EU signals bigger cuts in farm tariffs in Doha round (Financial Times, May 19)

The European Union on Friday signalled its readiness to offer bigger cuts in farm tariffs in the tortuous Doha round of trade talks, but continued to insist that such a move must be met by concessions elsewhere.

"Doha Light"?

Gregg Hitt speculated about potential futures for U.S. trade strategy, and the Doha Round, earlier this week ("Mapping Detours in Trade Talks.  Doha Stalemate May Force U.S. to Narrow Goals, Seek Bilateral Deals"  WSJ, May 3).  Possible options included:

• Spending more time on bilateral free trade agreements with other countries
• Focus more on pursuing U.S. interests through the WTO dispute settlement mechanisms (to build support for the WTO in the U.S.)
• Rethink Doha.  Here he cites former U.S. Undersecretary of Commerce for International Affairs Grant Aldonas, who argues that, while this is billed as a "development round" it has proceeded with a traditional focus on "a range of tariff lines and subsidies."  Maybe we ought to work as if this really were a development round.  Hitt paraphrases Aldonas to indicate that such talks, "could be designed to stimulate cross-border trade in areas such as communications and health care, 'where trade could grapple' with the real needs of the developing world."
• Doha light - accept that we are not going to get an ambitious agreement, salvage what we can, and end the negotiations.  The problem he sees here, is that Congress might fail to ratify an unambitious agreement, that doesn't get the U.S. anything significant.

This last concern about a minimalist agreement received emphasis in a letter yesterday from a pro-Doha industry coalition, ABCDoha. The members of this group say they won't support a low-ambition agreement: Business coalition warns of failed WTO round (Reuters, May 4).  The key paragraph from the text of the letter:

To be clear, ABCDoha considers a minimalist deal to be a failure. We will urge U.S. and non-U.S. negotiators to reject proposals for a "Doha light" deal that would produce only modest liberalization and reforms. In our eyes, such an outcome would constitute a wasted opportunity. A final package that misses the mark would draw little support from agriculture, business or consumer interests, making it likely to fail in Congress.

What about a "Sleeping Beauty" option - Doha goes to sleep, but does not die, until a future U.S. Congress provides a new administration renewed negotiating authority?

April Doha mini-ministerial canceled

Frances Williams reports that the April 30 deadline for reaching an agreement on Doha Round negotiating modalities will be missed: WTO admits defeat on Doha deadline (Financial Times, April 23):

Is that it for Doha?

An impasse in negotiations, a weakening American President (who will be a lame duck when an agreement would come before Congress), an opposition that's seen the potential benefit of the protection card (a key element in the Dubai Ports World), and that can be expected to make gains in the 2006 mid-term elections.  None of this augurs well for a successful Doha Round.

Both Daniel Drezner (Bill Thomas reads Doha its obituary , April 4) and Joel Trachtman (Doha Despair?, International Economic Law and Policy Blog - April 4) report today that the Chair of the House Ways and Means Committee is calling Doha a dead end, and encouraging the administration to focus on bilateral free trade agreements (FTAs) while he still has fast-track negotiating authority.

It doesn't look good for Doha

It doesn't look good for the Doha Round, say Gary Hufbauer and Jeffrey Schott: The Doha Round after Hong Kong  (Institute for International Economics, February 2006).

Not much progress was made in Hong Kong, and not much more is likely in 2006 (remember, because of a time constraint on the U.S. President's negotiating authority, the deadline for a completed agreement is basically the end of 2006)

Doha at Davos

Dan Drezner links to, and quotes from, Financial Times and Bloomberg stories on the informal meeting of trade ministers during the Davos World Economic Forum: Those trade ministers mean business!!

This could take quite a while

The Doha Round negotiations are beginning to jerk forward again with informal trade minister meetings at the Davos World Economic Forum.  Are we likely to see progress this year?

Simon Evenett  (of the University of St. Gallen) doesn't see the Doha Round ending until 2009 if things don't come together shortly: The WTO Ministerial Conference In Hong Kong: What Next?.

There are reasons to worry about the prospect of a deal in 2006:

How can the U.S. move the Doha Round forward?

The Doha Round is moving forward slowly.  That might not be so bad, but time is running out.  The Hong Kong meeting of member nation ministers didn't accomplish much.

Claude Barfield surveys the views of some knowledgeable observers ("The Doha Round: Bang or Whimper?") and comes down on the pessimistic, "whimper," side.

Agricultural interests in the E.U. are a key stumbling block to progress.  Large developing countries are also reluctant to make the industrial and services concessions that might give the E.U. a pretext to compromise.   

Two short papers look at political steps the U.S. could take to put pressure on the large developing countries, and/or the E.U., to move the negotiations forward.

Following The Hong Kong Ministerial

The WTO's Hong Kong meeting of trade ministers begins tomorrow.  The ministers will be trying to make progress on the Doha Round of trade negotiations.

Here are some helpful sources of information:

Dipak Patel and Doha

Less developed countries (LDCs) don't have a lot of resources to use in trade negotiations, like those involved in the Doha Round.

Alan Beattie brings this home in his story Dipak and the Goliaths (Financial Times, Dec 9 - access not restricted).  He personalizes issues by telling them incidentally to the story of Dipak Patel, the Zambian trade minister.

Physical and human infrastructure is limited:

Effects of liberalizing agricultural trade

The Congressional Budget Office (CBO) has just released a handy survey of economic research on The Effects of Liberalizing World Agricultural Trade: A Survey  (Dec 2005, the author is Bruce Arnold).

Note this right off:

Countries typically adopt trade-distorting agricultural policies—tariffs, tariff-rate quotas, production-distorting subsidies, and export subsidies—to benefit their domestic agricultural producers. In doing so, however, they often impose costs on their consumers (who must pay more for agricultural products subject to tariffs and tariff-rate quotas), domestic taxpayers (who must pay for any subsidies), and competing foreign producers (who lose sales). The costs to domestic consumers and taxpayers alone are usually greater in dollar terms than the benefits to domestic producers. Therefore, eliminating those policies is generally beneficial.

Looking for Doha Support

Mobilizing the stars

Rock star Bono's African development NGO,  DATA , views trade as a potentially valuable development tool, and is lobbying for a productive Doha Round.

Last week, the Washington Post carried a story by Sebastian Mallaby on DATA-sponsored briefings to prepare Brad Pitt for a Doha advocacy role:  Trade and Aid: Stars Are Aligned  (Nov 21):

Draft Ministerial Declaration for Hong Kong

The first draft of a declaration for the Doha Round Hong Kong meeting of WTO member trade ministers was released today: DOHA WORK PROGRAMME. Preparations for the Sixth Session of the Ministerial Conference. Draft Ministerial Text  (Nov 26).

Why is this so difficult?

A Doha Round trade agreement should make most people better off.  It can play a role in reducing poverty in developing nations.  Why are the negotiations so difficult?  Why is this so painful?

In March, Aaditya Mattoo and Arvind Subramanian argued that the negotiations would only produce a modest result:  Why Prospects for Trade Talks are not Bright (Finance & Development, March 2005).

Mattoo and Subramanian noted that the pressure for past multilateral trade agreements has come from business interests in developed countries.

Many businesses may benefit enough to find that working for an agreement is a good investment (Global trade advocacy offers huge commercial returns,  Peter Gallagher, July 20, 2005).  People who might also benefit as individual consumers or workers, either may not see the connection between liberal trade rules and benefits, or may not benefit enough themselves to find an investment in this issue worthwhile.  Thus the importance of business leadership, although Mattoo and Subramanian don't get into this.

They do note, however, that this time business interests have been relatively disengaged.  And, Mattoo and Subramanian argue, why not:  Many developing countries have been reducing trade barriers unilaterally, often at the urging of the World Bank and IMF.  This reduces the incentive of businesses in developed countries to negotiate.  They can also get much of what they want through regional trade agreements.  Moreover, multilateral agreements take a long time to reach - bilateral or regional agreements may be quicker. 

Moreover, areas in which developing countries have special interest - agriculture, textiles, labor mobility, and services - are very sensitive for developed countries.

A Doha Development Skeptic

Our word is our weapon is a development blog by Jim of North London.  Jim posts occasionally on the development dimension of the Doha Round.

Jim is skeptical that the Doha Round will benefit the world's poor: CGD Blog and thoughts on the Doha round :

Tuesday in Geneva

More than 20 trade ministers from WTO members meet at 2 PM this afternoon in Geneva for talks meant to  advance the Doha round negotiations.

Monday evening, representatives of the US, EU, Brazil, India, and Japan, met in the Indian embassy for six hours of negotiations.  The New Economist reported early Tuesday morning that, although the talks were productive, ultimately things didn't come together: WTO trade talk hopes fade .

Early Tuesday afternoon Richard Waddington and William Schomberg reported that trade ministers were now beginning to think about scaling back on the goals for Hong Kong: Trade ministers may have to delay WTO push  (Reuters, Nov 8).

Brazil and the Doha Round

This week's Economist has a special report on Brazil's agricultural potential: Brazilian agriculture. The harnessing of nature's bounty. (Economist, Nov 5, subscription required)

Brazil has enormous agricultural potential; a successful Doha Round may help to unlock it:

Proposed Farm Subsidy Extension to 2011

Elizabeth Becker reports that the Senate retained a measure (in budget legislation) to extend at least some subsidy provisions of the 2002 farm bill beyond their current expiration date in 2007, until 2011: U.S. Senate showdown on farm subsidies is threat to trade talks (International Herald Tribune, Nov 3):

But on Thursday, the Senate raised no objections to extending those subsidies by four years, to 2011. The White House had wanted the Senate to let stand the expiration date of 2007, when Congress is scheduled to rewrite the entire farm program. Now, critics contend, it will be harder to convince U.S. trading partners that the farm lobby is willing to give up some of its approximately $19 billion in annual subsidies.

Where are the East Asians?

The East Asians have a lot to gain from trade negotiations, so why aren't they playing a greater leadership role in the Doha round of negotiations, asks Guy de Jonquières Doha failure harms Asia most. (Financial Times, Oct 31, subscription required).

FarmPolicy.com

Farm issues are central to the current Doha Round negotiations.  In the United States, budget debates, and early debates over the upcoming 2007 farm bill, have important implications for the negotiations.

The web site and free daily email newsletter, FarmPolicy.com by Keith Good is a helpful resource, with a useful survey of media coverage of farm issues. 

Today's newsletter surveys media coverage of yesterday's House Agriculture Committee hearings on the Doha Round, other media coverage of the Round, coverage of French objections to the EU's negotiating proposals, and domestic EU farm subsidy politics.

U.S. ag subsidy extension

French farmers aren't the only ones trying to place constraints on the scope of a Doha agricultural agreement.

Elizabeth Becker reports that:

U.S. lawmakers are scheduled to vote Thursday on whether to extend the huge commodity subsidies for American farmers to 2011 from 2007, adding a new complication to the already complex negotiations for a global trade agreement.

A damper on WTO talks? (International Herald Tribune, Nov 3)

The World Won't End...

The world won't end if there is a weak result from the Doha Round, or even if there is a failure to complete the round.

But the world will be a better place if we do.  Economics columnist Martin Wolf takes up the theme: If trade liberalisation fails (Financial Times, Nov 1, subscription required).  In addition to explaining what we stand to lose, he has some advice on how to conduct the negotiations:

What's in it for Brazil?

What's does the Doha Round agricultural negotiation have to offer a large emerging economy like Brazil's:

New EU proposals

The EU made its new agricultural proposals today.

This press release from EU Agricultural Commissioner Mariann Fischer Boel provides details: EU tables new offer in Doha World Trade talks; calls for immediate movement on services and industrial goods.

The EU proposes:

New EU proposals tomorrow

EU leaders, meeting at a summit in the UK, announced that a revised set of negotiating proposals will be presented on Friday: EU confirms to make new WTO offer on farm trade tomorrow (AFX News, Oct 27, via Forbes).

There are a lot more episodes in this serial

The Doha Round has gone through more perils than Pauline . 

Peter Gallagher puts the current cliff-hanger into perspective, and points out that there are more to come: High drama and low politics .

Gallagher points out that a sense of crisis "helps governments press beyond established positions."  The negotiations aren't over when the current crisis is resolved.  Don't expect the agricultural package to be completed when the EU submits its new agricultural proposals (probablyThursday this week).  A lot of issues will remain; expect a lot more crises.  The agricultural package may not come together until next April-June. 

EU gives Mandelson go-ahead, again

The EU's chief trade negotiator, Peter Mandelson, has been given authority to make new agricultural proposals: Mandelson Wins Backing to Make New WTO Farm Offer   (Jennifer Freedman , Bloomberg, Oct 25).

``This offer would be a conditional offer which would enable other WTO members to make further moves in relation to agriculture, industrial goods and services,'' Mandelson's spokesman, Peter Power, said in a statement today. ``It was agreed that the EU offer should be substantive and credible and within the mandate'' of the bloc's agriculture policy.

As I understand it from earlier stories, a new offer could be put forward on Thursday, in time for a scheduled Friday teleconference between negotiators from five key countries (EU, the United States, India, Australia and Brazil).

Doha on the "knife's edge"

Not a lot of surface Doha Round action today (Monday), but Sophie Walker surveys the day's rumors: EU farm struggle casts doubt on WTO Hong Kong meet (Reuters.UK, Oct 24). 

Two points from this: