Though nothing has come of the WTO’s Doha Development Round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. However, this time, the negotiations will not be held on a global, multilateral basis. Rather, two huge regional agreements — one transpacific and the other transatlantic — are to be negotiated. Are the coming talks likely to be more successful?
The Doha Round was torpedoed by the US’ refusal to eliminate agricultural subsidies — a sine qua non for any true development round, given that 70 percent of those in the developing world depend on agriculture directly or indirectly. The US’ position was truly breathtaking, given that the WTO had already judged that the country’s cotton subsidies — paid to fewer than 25,000 rich farmers — were illegal. The US’ response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving millions of poor cotton farmers in the lurch in Sub-Saharan Africa and India, who suffer from depressed prices because of Washington’s largesse to its wealthy farmers.
Given this recent history, it now seems clear that the negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific — except for China — are not about establishing a true free-trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the West.
There are a few basic principles that those entering the discussions will, one hopes, take to heart. First, any trade agreement has to be symmetrical. If, as part of the Trans-Pacific Partnership (TPP), the US demands that Japan eliminate its rice subsidies, the US should in turn offer to eliminate its production and water subsidies, not just on rice — which is relatively unimportant in the US — but on other agricultural commodities as well.
Second, no trade agreement should put commercial interests ahead of broader national interests, especially when non-trade-related issues like financial regulation and intellectual property are at stake. For example, the US’ trade agreement with Chile impedes Chile’s use of capital controls — even though the IMF now recognizes that capital controls can be an important instrument of macro-prudential policy.
Other trade agreements have insisted on financial liberalization and deregulation as well, even though the 2008 crisis should have taught the world that the absence of good regulation can jeopardize economic prosperity. The US’ pharmaceutical industry, which wields considerable clout with the Office of the US Trade Representative (USTR), has succeeded in foisting on other countries an unbalanced intellectual property regime, which as it is designed to fight generic drugs, puts profit ahead of saving lives. Even the US Supreme Court has now said that the US Patent Office went too far in granting patents on genes.
Finally, there must be a commitment to transparency, but those engaging in these trade negotiations should be forewarned: The US is committed to a lack of transparency. The USTR’s office has been reluctant to reveal its negotiating position even to members of the US Congress; on the basis of what has been leaked, one can understand why. The USTR’s office is backtracking on principles — for example, access to generic medicines — that the US Congress had inserted into earlier trade agreements, like that with Peru.
In the case of the TPP, there is a further concern. Asia has developed an efficient supply chain, with goods flowing easily from one country to another in the process of producing finished goods. However, the TPP could interfere with that if China remains outside of it.
With formal tariffs already so low, negotiators will focus largely on non-tariff barriers, such as regulatory barriers. Yet the USTR’s office, representing corporate interests, will almost certainly push for the lowest common standard, leveling downward rather than upward. For example, many countries have tax and regulatory provisions that discourage large automobiles, not because they are trying to discriminate against US goods, but because they worry about pollution and energy efficiency.
The more general point, alluded to earlier, is that trade agreements typically put commercial interests ahead of other values — the right to a healthy life and protection of the environment, to name just two. For example, France wants a “cultural exception” in trade agreements that would allow it to continue to support its films, from which the whole world benefits. This and other broader values should be non-negotiable.
The irony is that the social benefits of such subsidies are enormous, while the costs are negligible. Does anyone really believe that a French art film represents a serious threat to a Hollywood summer blockbuster? Yet Hollywood’s greed knows no limit and the US’ trade negotiators take no prisoners. That is precisely why such items should be taken off the table before negotiations begin. Otherwise, arms will be twisted and there is a real risk that an agreement will sacrifice basic values to commercial interests.
If negotiators created a genuine free-trade regime that put the public’s interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists, I might be optimistic that what would emerge would strengthen the economy and improve social well-being. However, the reality is that we have a managed trade regime that puts corporate interests first and a process of negotiations that is undemocratic and non-transparent.
The likelihood that what emerges from the coming talks will serve ordinary Americans’ interests is low and the outlook for ordinary citizens in other countries is even bleaker.
Joseph Stiglitz, a Nobel Prize in Economics laureate, is University Professor at Columbia University.
Copyright: Project Syndicate
Because much of what former US president Donald Trump says is unhinged and histrionic, it is tempting to dismiss all of it as bunk. Yet the potential future president has a populist knack for sounding alarums that resonate with the zeitgeist — for example, with growing anxiety about World War III and nuclear Armageddon. “We’re a failing nation,” Trump ranted during his US presidential debate against US Vice President Kamala Harris in one particularly meandering answer (the one that also recycled urban myths about immigrants eating cats). “And what, what’s going on here, you’re going to end up in World War
Earlier this month in Newsweek, President William Lai (賴清德) challenged the People’s Republic of China (PRC) to retake the territories lost to Russia in the 19th century rather than invade Taiwan. He stated: “If it is for the sake of territorial integrity, why doesn’t [the PRC] take back the lands occupied by Russia that were signed over in the treaty of Aigun?” This was a brilliant political move to finally state openly what many Chinese in both China and Taiwan have long been thinking about the lost territories in the Russian far east: The Russian far east should be “theirs.” Granted, Lai issued
On Tuesday, President William Lai (賴清德) met with a delegation from the Hoover Institution, a think tank based at Stanford University in California, to discuss strengthening US-Taiwan relations and enhancing peace and stability in the region. The delegation was led by James Ellis Jr, co-chair of the institution’s Taiwan in the Indo-Pacific Region project and former commander of the US Strategic Command. It also included former Australian minister for foreign affairs Marise Payne, influential US academics and other former policymakers. Think tank diplomacy is an important component of Taiwan’s efforts to maintain high-level dialogue with other nations with which it does
On Sept. 2, Elbridge Colby, former deputy assistant secretary of defense for strategy and force development, wrote an article for the Wall Street Journal called “The US and Taiwan Must Change Course” that defends his position that the US and Taiwan are not doing enough to deter the People’s Republic of China (PRC) from taking Taiwan. Colby is correct, of course: the US and Taiwan need to do a lot more or the PRC will invade Taiwan like Russia did against Ukraine. The US and Taiwan have failed to prepare properly to deter war. The blame must fall on politicians and policymakers