business & economy
Movement in stalled WTO talks
by Eric Jackson, mainly from other media
From several continents come signs that the Doha Round of world free trade talks, which have been suspended since July, may not be a dead letter after all. The negotiations among the 149 member countries of the World Trade Organization broke down over agricultural issues, with the United States and the European Union leading the resistance against industrialized countries' cuts in farm subsidies and a coalition led by India, Brazil, China and South Africa resisting the duty-free access of subsidized farm products to their domestic markets. That impasse in turn provoked a US-EU row, with the Europeans accusing the Americans of intransigence that's blocking progress.
There are also some big differences about trade in services and manufactured goods that would have to be resolved before the WTO could come to an agreement in the round of talks that began in Doha, Qatar in 2001.
The WTO is the successor to the General Agreement on Trade and Tariffs that was hammered out in a 1946 conference in Bretton Woods, New Hampshire at which US and British economists led the way in setting the basic structure of world trade after World War II. Although there have been detours and setbacks along the way --- the collapse of the Bretton Woods exchange rates among major world currencies in the early 1970s and oil exporters' revisions of energy equations in the years that followed probably being the most noteworthy --- the old GATT organization has increased its membership and powers over several rounds of talks and transformed itself into the WTO. If the Doha Round ultimately fails, it would be the first time since World War II that a round of world trade talks failed to result in an agreement.
Against that prospect, countries on both sides of the agricultural divide have apparently come to the conclusion that it's probably better to have a WTO than not to have one.
In Switzerland WTO director general Pascal Lamy, who halted the process in July because of the impasse, has called a meeting of the Trade Negotiating Committee, the steering committee for the Doha Round talks, for the purposes of getting the negotiations back on track.
Meanwhile the European trade commissioner, Peter Mandelson, has been in India pleading for a compromise agreement. His offer to India is to allow the world's second most populous country to continue the protection of its large subsistence agriculture sector in exchange for some opening of its market to farm imports. He pleaded for greater flexibility in the negotiating stances of both sides.
At the same time at the Asia Pacific Economic Cooperation forum in Vietnam, the Pacific Rim countries that account for most of the world's commerce agreed on a statement advocating a resolution of the Doha Round's impasse by "making deeper reductions in trade-distorting farm support by major players, creating new market access in agriculture, making real cuts in industrial tariffs and establishing new openings in services trade."
So where does this leave Panama? Mainly as a spectator.
The Torrijos administration and its predecessors have been conducting free trade talks with the United States under the assumption that a lot of the agricultural issues about subsidies and tariff barriers would be sorted out in the WTO. The stalemate in US-RP free trade talks parallels the one in the WTO and is precisely about agricultural issues.
That President Torrijos has the votes in the National Assembly to pass whatever agreement he submits to it and that many Panamanian farmers will object to any agreement lowering protective tariffs are two basic facts in the bilateral trade talks --- the former trumping the latter as far as the president is concerned. Whatever deal might be made, a lot of Panamanians will accept it because it has the "free trade" label attached, a smaller number will oppose it for that very reason, and as the details leak out others will find themselves unexpectedly affected and raise objections. That dynamic is taken as given by virtually all parties concerned with the trade issue.
The issue is really not what the Torrijos administration can get away with, or even a fundamental disagreement among the political parties or within the ruling PRD. The last several Panamanian administrations seem to have been content to accept whatever the Americans were giving on most issues while waiting for global forces to set the agricultural rules. At the moment, however, the PRD-led government runs the risk that if it is too quick to accept farm concessions of a sort that prove to be unacceptable in the context of a Doha Round agreement the party will not only lose some of its rural base of support but also look foolish to some of the more astute players in the business sectors. It wouldn't much affect this administration, but it would reduce the PRD's chances in the 2009 elections.
So look for developments in the WTO's Doha Round, as well as the change from Republicans to Democrats in control of key US congressional committees, to affect the free trade talks between Panama and the United States.
Unclassified Ads | Calendar | Outdoors | Dining | Science | Sports | Español | Front Page
Archives | Wappin' Radio Show
Make the Executive Hotel your headquarters in Panama City --- http://ww.executivehotel-panama.com
Find the boat of your dreams through Evermarine --- http://www.evermarine.com