What About Doha?

Although it's received almost no attention since the Hong Kong Ministerial meeting in December, the World Trade Organization continues to work toward an agreement on the framework (or 'modalities') of the Doha Round of trade liberalization talks. The Doha Round kicked off in 2001, with the goal of delivering substantial liberalization of agricultural trade, with attendant benefits for everyone - but especially less developed countries. Progress has come in fits and starts - almost exclusively when it was felt that Doha was on life support. Most recently (at Hong Kong), Europe agreed in principle to give up its agricultural export subsidies by 2013, pending an overall Doha Round agreement.

Now there is a theoretical deadline of the end of April for agreement on the parameters of a final deal. Countries are all supposed to approve the broad brushstrokes within which a deal will be negotiated. They will then hash out the actual provisions of a deal between now and December, when the final accord will be put on paper - theoretically.

The problem is that Europe is unwilling to actually put its cards on the table and agree to real openness in agriculture. Or maybe it's that Brazil won't agree on opening its industrial market, or the US won't go further on reducing its agricultural price supports. There's plenty of finger-pointing.

While there are apparently no real deadlines in trade talks that are governed by consensus, there is one real deadline in US law. Trade Promotion Authority (TPA) - or Fast Track - or whatever you like to call it - expires in mid-2007. Simply put, TPA requires the Congress to vote yes or no on a trade deal - to accept or reject it without amending it. If our trading partners know that Congress has the power to change a deal after the President has signed it, they will never sign on to an overall Doha agreement with the US. So for there to be a Doha Round agreement, it probably has to be signed, sealed and delivered by the end of 2006. No one wants to bet that Congress will be willing to extend TPA in the foreseeable future.

Into all this, the move of Rob Portman from USTR to OMB has set off shock waves. Our trading partners say that it sends the signal that the US doesn't take Doha seriously. They're implying that this might mean the end of the Doha Round.

Frankly, this is nonsense. Rob Portman - and before him Bob Zoellick - worked tirelessly to revive Doha when it seemed dead. Their shuttle diplomacy and their willingness to push the boundaries on what Congress might ultimately accept in a deal have helped keep the process moving. Europe has been unable to get down to brass tacks in these negotiations - largely because France will not contemplate further changes to farm programs, and especially not before their 2007 Presidential election. To the extent that Portman's departure means anything about Doha, it means that the US is recognizing that the intransigience of our trading partners means success in Doha is unlikely.

If you're interested in reading a critique of Europe's Common Agricultural Policy, written by those on the inside, check this out.