Wednesday, October 28, 2009

More Demands, No Solid Commitments, Fewer Concessions, And Mockery! - America's New Strategy At The WTO?

Contrary to popular belief, the United States actually has developed a formal negotiating strategy as part of the WTO's Doha Round of multilateral trade negotiations.  It has not, however, made this double-super-top-secret strategy public.  Instead, I've intensely analyzed almost 9 whole months of data and have employed my unparalleled* powers of deduction to systematically determine the Obama administration's grand WTO battleplan.  And I'm providing it today to you, my dear reader(s), free of charge.  So here you go:

Step One: Disavow any and all prior US negotiating commitments.  In the dark, pre-hopenchange days of July 2008 (and without Trade Promotion Authority), the US delivered its most ambitious negotiating proposal as part of the WTO's Geneva "Mini-ministerial."  The deal worked from the United States' December 2005 negotiating proposal and offered steep cuts in agricultural subsidies and increased visas for temporary workers.  And it almost led to a final Doha agreement.  (Hopes for a deal collapsed at the last minute when parties could not agree on smaller issues like agricultural safeguards).  Since the inauguration, however, the Obama administration has steadfastly refused to accept any of the Bush administration's WTO offers or commitments.  As USTR Ron Kirk said back in May, "We are suggesting that we have to be open to all possibilities."  'Nuff said.

Step Two: Express vague support for the Doha Round while hinting at the need for changes before you could commit to a final agreement. Over and over and over again.

Step Three: Do nothing!  (...while saying you're "reviewing" existing US trade policy and will issue a revised, formal Doha position any day now.)

Step Four: Make loud public demands of your trading partners.  See, e.g., the United States' very public demands over the last month on "sectoral" tariff elimination agreements and intensified services negotiations.

Step Five: Privately backtrack from previous commitments.  According to Bridges, US negotiators have quietly sought more import protection for American farm products during small group meetings at the WTO.  In particular, USTR wants the United States to be allowed to designate an additional 2 percent of agricultural tariff lines as "sensitive" and thus not subject to the overall tariff reduction commitments set pursuant to an eventual Doha Round agriculture agreement.  (As Bridges points out - and needless to say - other WTO Members were not amused by the US suggestion, especially considering steps 1-4 above.) 

Step Six: ???

Step Seven: Profit! 

Unfortunately, Step Six appears to be the real sticking point (see below), and I haven't quite figured it out yet. I think it involves magic beans, unicorns or significant hopechangification - maybe all three.  But fortunately, what this "strategy" lacks in realism, it has more than made up for in hilarious, nonsensical diplo-speak from some of America's trading partners.  For example, Reuters reports on EU Trade Commissioner Catherine Ashton's bizarre non-response on Monday when asked directly about the United States' commitment to the Doha Round:
A top European Union official said Monday she believed President Barack Obama was serious about reaching a deal in long-running world trade talks, but the time has come for all countries to show their cards.

"I think first of all this administration is committed to open trade. It is committed to trying to resolve the Doha round," EU Trade Commissioner Catherine Ashton said at the Paul H. Nitze School of Advanced International Studies.

"I'd like also to say, but I'm not certain, that we'll see significant breakthroughs in the next few weeks and months. But I do think there's no question in my mind that the energy and commitment of the new USTR (U.S. Trade Representative Ron Kirk) is absolutely there," Ashton said when asked if she had a clear picture of the Obama administration's trade policy.
To recap:  Ashton is confident in US commitment to Doha, but the time has come for, ahem, "all countries" (hint, hint!) to show their cards.  And when asked if she had a "clear picture" of the United States' trade policy, Ashton responded by changing the subject, noting USTR Kirk's energy, and boldly proclaiming that she kinda, sorta maybe thinks that there might possibly be a "significant breakthrough" in the next few "weeks and months."

Seriously, what the... ??? 

Baroness Ashton's kind-yet-incoherent words aside, other WTO Members and WTO officials are rather peeved with the United States' current negotiating plans. The same Reuters article noted that "Many WTO members believe the blockage in the [Doha] talks comes from Washington, where trade has taken a back seat to issues such as economic stimulus, healthcare, the war in Afghanistan and financial regulatory reform."  Indeed.  And according to Bridges, WTO Director General Pascal Lamy has expressed doubts that the current pace of negotiations would lead to a 2010 conclusion of the Round, and delegates from Brazil, Argentina, Tanzania, China, Switzerland, Turkey, and Taiwan also expressed far more extreme - and pointed - frustration with the state of the negotiations.

Yet despite Ashton's thinly-veiled hopes and all of the public and private grousing over the new US "strategy" at the WTO, the White House does not appear to be changing things any time soon. Here's Reuters one last time:
A U.S. trade official who attended the SAIS event with Ashton and Swedish Trade Minister Ewa Bjorling said the Obama administration "clearly ... has been conducting a broader review of U.S. trade policy."

But there seems to be a mistaken impression "that this review would conclude with a nice leather-bound volume, which would be the Holy Bible of the Obama administration's trade policy and make everything perfectly clear," said the official, who asked not to be identified.

Obama has made a number of choices that already define his trade policy, such as a decision to keep "the shoulder to the wheel" on Doha and to build support at home by increasing enforcement of trade pacts, the official said.

But Obama and U.S. Trade Representative Ron Kirk also have been clear "the biggest mistake we could make is to come back with a Doha agreement that would be rejected politically by the U.S. Congress," the official said.
So the current US strategy of "review, delay, demand and backtrack" is producing (at best) confusion and (at worst) serious doubts that the entire Doha Round can be completed according to the current amorphous negotiating format - a format necessitated by the United States' strategy!  And even America's closest allies are calling on it to make some real commitments and to finally "put its Doha cards on the table."  Yet the United States' immediate response is to repeat the same old tired cliches and mock its detractors with bizarre, ill-informed retorts about leather-bound trade bibles.

Impasse resolved!  Huzzah!

In all seriousness, maybe this anonymous "US trade official" wasn't appointed yet when USTR repeatedly stated that it would complete a formal review of US trade policy and would enunciate the new US "policy framework" at some point (supposedly this fall at the latest).  Or maybe he/she doesn't understand how formal trade negotiations are conducted at the WTO, and that other WTO Members simply refuse enter into substantive trade negotiations with the United States until it has formally provided its negotiators with a negotiating mandate that states clearly where the US stands on the current WTO negotiating texts and its previous offers.  Or maybe he/she does know all of this and is just stonewalling, albeit poorly, until ObamaCare, Cap-and-Trade, Afghanistan, and whatever else is "resolved," and the Obama administration can finally feel like it's in a sufficiently comfortable political place to put some real skin in the WTO game.


Well, whatever their reasons, the Obama administration's current "strategy" is proving to be an abject failure.  WTO Members are no longer listening to American demands.  They are openly grousing about the US failure to commit.  The Doha Round is once again on the brink of collapse, and bilateral and regional FTA activity has exploded as nations search to expand trade by other, admittedly less ideal, means.  So if the White House really is going to stick to this strategy - if these are the United States "cards" and nothing changes before (or after) the December 2009 WTO ministerial in Geneva - Doha is doomed.

And anonymous US snark and derision is certainly not going to save it.

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