Fri, Aug 04, 2006 - Page 9 News List

Collapse of the WTO: Another reason to hate the US

By Oliver Morgan  /  THE OBSERVER , LONDON

The US may blame the rest of the world for the breakdown of the world trade talks, but the rest of the world blames the US. In fact, for emerging economies, the collapse is another reason to hate Uncle Sam -- a dislike that could have deep ramifications for US Inc.

For decades, poor nations have railed against the austere economic policies imposed by the IMF and the World Bank -- institutions dominated by Americans. What's more, US farm subsidies worth hundreds of millions of dollars lower commodity prices and see produce dumped on overseas markets.

Now that the US is in the dock for blocking a trade round designed to help the developing world haul itself out of poverty, US experts believe there could be further damage to its reputation.

Andrew Kohut, president of the Pew Research Center, an independent Washington-based polling organization, says: "This reinforces the view that America is conducting its foreign policy -- in this case trade -- in its own interests. Our surveys show one of the biggest criticisms of foreign policy is its unilateralism."

The US in general -- but Bush in particular -- has been criticized for unilateralist tendencies. Bush's first presidential term saw him attacked for his agricultural policy and the tariffs he introduced to protect the domestic steel industry, and Kohut believes the Doha failure will add to the bad feeling over these issues.

In addition, he says: "American policies are seen to increase the gap between rich and poor countries, and [the trade talks collapse] speaks to that fear as well."

But he adds that US priorities may remain unchanged because of the lack of profile these issues have at home.

"The world is more sensitive to what we do in trade than Americans are. When steel tariffs were in place, we did a poll across Europe and most people in Europe were aware of them and critical; most people in America were not aware at all," he says.

If this is true, then criticism of the US -- over the collapse of Doha, as with other "unilateralist" actions -- may intensify because the US electorate appears so indifferent to it. But will this kind of anti-Americanism translate into a more dangerous kind: the sort that might harm its commercial interests?

In the developing world, there are already examples of US products being boycotted: the Indian state of Kerala has shunned Coca-Cola for years. India and the US are also at each other's throats over Washington's tough response to what it regards as the "dumping" of shrimp exports on to its markets by India and other developing nations.

Meanwhile, Russian President Vladimir Putin is planning to prevent US companies Chevron and ConocoPhillips from developing the enormous Shtokman gas field. And sales of iconic US brands such as Marlboro, Coke and McDonald's fell in countries such as France and Germany in the aftermath of the Iraq invasion.

Does the failure of the Doha round increase the likelihood of an anti-US backlash? Stuart Eizenstat, a former adviser to presidents Jimmy Carter and Bill Clinton, believes the link between US policy and brands is too simplistic.

"People separate out American investment, job creation and consumer products, which are attractive, from trade talks," he says.

But he says of the Doha failure that "everyone is a loser," and points out that with the US a prime proponent of opening markets (and given its pledge at the G8, along with other nations, to make concessions to get a deal), the whole affair has been "a blow to American leadership."

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