Thursday, November 10, 2005

Bring Out Your Dead

President Bush just returned from a summit in South America. While there, he unsuccessfully tried to defribulate the comatose talks to create a Free Trade Area of the Americas. This agreement is sort of the Holy Grail of regional pacts. It would link 34 western hemisphere democracies in a loose trade bloc (think NAFTA writ large, not the EU). Cuba, by the way, is one country on the outside looking in. It turns out this is unlikely to happen. The US and Brazil are at loggerheads over agricultural subsidies and Venezuela is not exactly on good terms with President Bush (or Pat Robertson) either.

The bigger issue for the FTAA may just be that there is a bigger issue: finishing the Doha Round of WTO talks. That also looks like it need life support. The US and EU have made a proposals over the past month to reduce tariffs but neither side is happy with the other's proposal. The EU, driven by the French, insist the the US proposal cuts subsidies too deeply. Still, the US proposal is not a deep enough cut to satisfy some developing countries. That sound you hear is that approaching stalemate.

It appears that this impasse has actually grown into a breakdown. According to a transcript of a USTR briefing, USTR Portman said: "I am sorry to report that we've not made the progress that we had hoped to make in order to put together a program for the Hong Kong meeting that would enable us to set forth a framework or as the WTO language would be 'modalities' in order for us to complete the negotiation more rapidly." Without a framework for negotiations, the WTO meeting in Hong Kong may be useless.

The meeting could result in an agreement on the non-controversial low-hanging fruit. That would allow everyone to declare victory. Or, the meeting might be cancelled or postponed to let negotiators get past this hurdle. Or, the meeting might be held and fall apart. That would be a terrible blow to the WTO which is already staggering. But, it's not dead yet. Actually, it may be feeling quite a bit better. Perhaps Seattle and Cancun were nothing but flesh wounds.

The US did succeed in getting a deal with China to limit textile imports starting January 1, 2006. The deal imposes quotas on 34 categories of clothing through 2008. That is a win for the Administration and the domestic industry. Predictably (and reasonably), retailers see it differently.

1 comment:

digital signature PDF said...

I agree with you that The meeting could result in an agreement on the non-controversial low-hanging fruit. That would allow everyone to declare victory. Or, the meeting might be cancelled or postponed to let negotiators get past this hurdle.But I wish for first case to happen