|
|
 |
|
| Politics & Policy |
Shepherd and Goad
Daniel T. Griswold
02/02/2004
|
While the collapse of the World Trade Organization’s global trade talks in Cancun in September was an undeniable blow to the cause of free trade, the setback to the efforts of the 146-member body to make progress in the current round of negotiations is likely to be temporary. In the short run, it means we will not see final agreements on reduction of subsidies and tariffs until 2007, if not later, which will delay progress on the liberalization of the still heavily protected markets for agricultural goods and services. But any hope of progress in the longer run will hang heavily on whether the United States exercises its leadership in the global economy.
Multilateral negotiations often follow a torturous path. Previous rounds have missed deadlines and flirted with failure. The successful Uruguay Round almost fell apart in 1990 over European reluctance to deal with farm subsidies and barriers. At ministerial meetings in 1982 and again in 1999 (remember Seattle?), members failed even to agree to launch a round. The current Doha Development Round, begun in late 2001, may be following the same messy path toward achieving its aims.
Much is at stake in the Doha Round for the global economy and American workers and investors. If the negotiations lead to a successful reduction in agricultural and intellectual property subsidies and tariffs, this could add hundreds of billions of dollars annually to world output by raising productivity in rich and poor countries alike.
Critics who claim free trade benefits only the rich countries should know that some of the highest trade barriers in the world today are aimed at products of export interest to poor countries—farm goods, textiles, apparel and footwear. Poorer countries also suffer from the effects of the $330 billion that rich countries, like the United States, spend to subsidize farm production—policies that drive down global food prices, depressing incomes for the 70 percent of the world’s poor who live in rural areas and derive their income from agriculture.
|
|
|
|
|
|
|
