Keeping disputes away from Doha

Date: 06/06/02

By Mike Moore

EU-US disagreements don't threaten development agenda.

A GREAT deal of media attention has been focused in recent months on a number of disputes between the US and the EU, but it is important not to lose perspective on matters such as this.

Disagreements over steel and farm subsidies concern only about 5 of the trade between the two powers. Moreover, it should be remembered that Washington has taken steps to protect certain sectors ahead of previous trade rounds - steel in the 1970s and automobiles in the 1980s.

At this stage, I can say in all honesty that the current disputes have not adversely affected the negotiations in the Doha Development Agenda to any great extent - yet. That could obviously change as we shift from negotiations on process to negotiations on substance.

But keeping disputes from tainting the negotiations will be essential because of the very tight deadline - 1 January 2005 - to complete this round of talks. The target is achievable, provided we waste no time and provided that Brussels and Washington exhibit the necessary leadership.

For decades, the US and EU could simply get together, strike a deal on a trade agreement and effectively impose that agreement on the rest of the world. This is no longer the case. With 144 member governments, the World Trade Organisation (WTO) is now too big and developing countries such as China, Brazil, India, South Africa, Malaysia and Egypt have had great success in shaping its agenda to better reflect their priorities.

That said, those who criticise the influence of the major players in the WTO are often the first to complain when the EU, US or Japanese economies slow down and imports contract. This is not surprising when you consider that taken together these three trading powers absorb nearly half of all global imports.

European and American leadership has led the trading system through seven successful rounds of trade liberalisation negotiations as well as to the creation of the WTO in 1995. A system which has been instrumental in raising living standards, combating protectionism and economic nationalism and resolving disputes in a relatively civilised manner owes much to US-EU cooperation.

As trade minister in New Zealand in the 1980s, I often remarked that the only thing worse than the US and EU getting together was their not getting together.

We saw a superb example of such cooperation before and during the Doha Ministerial Conference last November. EU Trade Commissioner Pascal Lamy and US Trade Representative Bob Zoellick worked together brilliantly.

The two men know each other well. They share the same commitment to the multilateral trading system and they are sensitive to the political needs and concerns of each other's constituencies.

This sort of understanding was helpful in finding solutions to problems in a wide range of issues in Doha including agriculture, intellectual property and medicine, anti-dumping, investment and competition.

Sensitivity to the political concerns of each trading partner will be important throughout these negotiations. And there is reason to believe that such sensitivity is present. There are many trade policy officials who believe that President Bush would not have achieved his victory on Trade Promotion Authority (TPA) in the Senate without concessions to senators from steel and agriculture producing states. A House-Senate conference must still resolve some issues on the legislation, but there is good reason to believe the bill will pass and that the president will sign it into law. This is something recent administrations have failed to achieve.

Angry though many of America's trading partners may have been following Washington's steel and farm decisions, there is an appreciation, in some quarters at least, of the political calculation trade liberalisers in the administration and Congress have had to make. Moreover, there is vivid recognition in the halls of the WTO that failure to secure TPA would have been a major blow not only to President Bush's trade policy but to the Doha negotiations as well.

I am by nature an optimist and I believe the EU-US trading relationship will not only survive the current rash of disputes, but will emerge stronger and more vibrant. I am also a realist and I know that if I'm wrong and the transatlantic relationship deteriorates too much further, it will be the WTO and the many poor nations it represents who pay the price. After all, the big players have bilateral and regional trading options not available to the poor.

• Mike Moore is director-general of the World Trade Organisation.

Viewpoint article by the director-general of the World Trade Organisation.

Website: World Trade Organization https://www.wto.org/index.htm

---