Friday, August 26, 2016

THE SILLY TRADE DEBATE BY THE SILLY CANDIDATES IN THE SILLY CAMPAIGN

“Don’t tax you, don’t tax me, tax that fellow behind the tree.”
The well-known maxim came from then Senate Finance Committee Chairman Russell B. Long (D-La), who was bluntly explaining the underlying motivation behind tax reform legislation that was then moving through Congress back  in the 1970s.
It’s still true today when it comes to tax – and trade – legislation in Congress.  And the country’s two Presidential candidates – former senator and secretary of state Hillary Clinton and businessman Donald Trump, both of whom should know better – are taking up the antitrade banner in earnest.
Substitute “tariff” for “tax” and you have both candidates’ policies in a nutshell – imposing tariffs on other countries will make life better for Americans by creating new jobs and increasing living standards – without any negative impact here.
Not quite so.
Lower consumer prices for imported goods contributes to more disposable income for Americans – especially poorer folks – and provide US manufacturers with the inputs they need so their finished products can be sold competitively on the world market.  Don’t forget the United States – although it maintains a goods deficit – is the second largest manufacturer exporter in the world.
And recent World Bank statistics confirm what pro-trade advocates have said for a long time – that there indeed is an exploding middle class of consumers in once dirt-poor developing countries.  That now includes China – the world’s most populous nation.
The opportunity for US trade and exports should not be ignored.
But Mr. Trump and Mrs. Clinton ignore that fact and envision a US economy in isolation from the rest of the world.  Globalization is here and well-established.  There is no going back to the decade of the 1930s.
Rhetoric broadcast almost daily from Presidential candidate Trump that suggests a country having a trade surplus with the United States should be enough reason to trigger tariffs is both simplistic and wrong-headed.
And simplistic and wrong-headed is exactly what both candidates’ trade policies amount to – the notion that all trade agreements are bad and all US manufacturing jobs lost over the past 30 years can somehow be regained if we “renegotiate” the North American Free Trade Agreement and kill the TransPacific Partnership.
That kind of thinking clearly does not hold muster with most Americans.  Overall, according to recent public opinion polls, Americans understand that they stand to benefit from trade – both in terms of jobs and lower consumer prices.  Recent polls also suggest that many Americans, who express opinions on trade, support TPP – which our two Presidential candidates would have you believe is not the case.
In sum.  The whole Presidential debate is silly – and woe to the country if the winner in November does not do what is natural for politicians and ignore his or her campaign promises.

Mary and Jim Berger
WTD

Thursday, June 16, 2016

Why Is Obama Strangely Silent on the Pacific Trade Deal?

Here’s a blog from the Cato Institute which hits dead on President Obama’s attitude toward the TransPacific Partnership and trade in general.


Why Is Obama Strangely Silent on the Pacific Trade Deal?
By Daniel J. Ikenson

This article appeared on Newsweek on June 3, 2016.

Barack Obama assumed office promising to restore some of the U.S. foreign policy credibility notoriously squandered by his predecessor. But if Congress doesn’t ratify the Trans-Pacific Partnership (TPP) agreement before Christmas, the president will leave office with American commercial and strategic positions weakened in the Asia-Pacific and U.S. credibility further diminished globally. The specter of that outcome should be keeping the president awake at night.

The TPP is a comprehensive trade agreement between the United States and 11 other Pacific-Rim nations not called China. It is the economic linchpin of the administration’s “strategic pivot” to Asia, which in 2009 heralded U.S. intentions to extricate itself from the messes in Iraq and Afghanistan and to reassert its interests in the world’s fastest-growing region.

One would assume TPP ratification an obvious policy priority in Washington, but the lack of enthusiasm for considering the deal in Congress is exceeded only by the president’s unwillingness to break a sweat pitching its merits.

Superficially, one could blame election-year politics and a metastasizing popular antipathy toward trade agreements for the situation, but the original sin is the president’s lackluster effort to sell the TPP to his trade-skeptical party and the American public.

President Obama is down to his last chance to fulfill his obligation to posterity.
In the administration’s division of labor, those tasked with negotiating the TPP kept their noses to the grindstone and brought back an agreement that reduces taxes and other protectionist impediments to trade, establishes precedents for tackling new kinds of barriers that have emerged in the 21st century and positions U.S. businesses, workers, consumers and investors to capitalize on the region’s growth.

Meanwhile, those responsible for explaining the deal’s merits domestically spent too much time on the golf course. With scarcely greater frequency than a couple of sentences in his past two State of the Union addresses has President Obama attempted to articulate the importance of trade and the TPP to the American public. Even then, his “advocacy” has been grudging and couched in enough skepticism to create and reinforce fears about trade and globalization.

When Hillary Clinton—the president’s former secretary of state, co-architect of the Asian pivot and champion of the TPP—announced her opposition to the negotiated deal because it became a political liability for her, President Obama remained silent.

If the president really believes in the trade agenda his administration has pursued for eight years, his decision not to challenge Clinton was a significant tactical error—and a profoundly lamentable display of cowardice. Foregone was a prime opportunity to inject an affirmative case for the trade deal into the fact-deprived election debate.

And how could Obama let Clinton’s political ambitions take priority over his policy agenda? How could the president of the United States be so cavalier about actions and inactions that amount to kneecapping the U.S. foreign policy agenda and subverting American commercial interests?

The president’s near total absence of promotion of the TPP explains why, in the waning months of his tenure, ratification of the economic centerpiece of the vaunted Asian pivot is unlikely. In this absence emerged a fallacious, hysterical narrative about the allegedly deleterious effects of the TPP on jobs, the environment, public health and even cancer rates, which became the dry tinder that fueled the fiery anti-trade rhetoric of this year’s demagogic presidential campaigns.

As if that rhetoric weren’t already enough to render congressional support for TPP extremely difficult in Rust Belt districts (and beyond), the U.S. International Trade Commission’s assessment of the deal’s likely impact on the U.S. economy, with estimates of only very modest improvements in income and gross domestic product, is offering insufficient counterweight for politicians who might otherwise be inclined to push back against the populist narrative.

But entirely too much significance has been attached to the ITC analysis. It focuses exclusively on the easily quantifiable terms of the agreement and makes no effort to estimate the benefits of provisions that are qualitatively liberalizing, but too difficult to model quantitatively.

How would one measure the benefits of rules designed to curtail the monopolistic behavior of state-owned enterprises anyway? Moreover, the TPP’s importance exceeds its value as a single, static trade agreement, and the costs of its failure would be much greater than the immediate economic benefits of its success.

There is a strategic rationale for trade agreements and those kinds of arguments can be more politically persuasive than the economic ones. Indeed, the post-WWII liberal global trading order reflects the lessons of history: Commerce and economic interdependence are the best guarantors of peace. Or as the French economics writer Fredric Bastiat is alleged to have quipped a century earlier: “When goods don’t cross borders, armies will.”

It was with those lessons in mind that President George W. Bush paid a visit to the Senate in June 2005, with legislation to implement his Central American Free Trade Agreement (CAFTA) facing uncertain prospects. Citing the rise of Hugo Chávez in Venezuela and the return of Daniel Ortega in Nicaragua, Bush urged his colleagues to consider CAFTA an agreement that would serve long-standing U.S. strategic interests—with a sprinkling of economic benefits to boot. The following day the agreement was ratified.

President Obama is down to his last chance to fulfill his obligation to posterity. Success requires that he put the TPP into its broader geopolitical and geoeconomic contexts and describe a world with and without its ratification.

The president attempted as much in a Washington Post opinion piece last month, describing the TPP as an opportunity for the United States to write the new rules of global trade before China does. It was a laudable start, if not too reliant on the myth of trade as a competition between the United States and China.

With so many Americans leery of China’s rise and U.S.-China relations growing more contentious over economic and security issues, the president may be tempted to describe the TPP as an agreement that “excludes,” “contains” or “isolates” China. That characterization would certainly resonate with members of Congress looking for cover to support the TPP.

But portraying the TPP as a weapon of economic warfare essential to “beating” or “defeating” China is short-sighted and fraught with the perils of self-fulfilling prophesy. Our economic relationship with China is more collaborative than competitive and the costs of estrangement would be felt deeply in the United States.

Instead, President Obama should argue that U.S. leadership, and immersion in the process of crafting the 21st-century rules that will govern the trade of China’s most important partners, will leave Beijing with no better alternatives than to embrace those rules. Accession to the TPP is open to all newcomers that can meet the deal’s relatively high standards, and that, importantly, includes China.

The president’s comprehensive case for the TPP must go well beyond the static benefits estimated by the ITC. It must include the benefits associated with the liberalizing policy reactions of other countries in the region, as they aspire to become parties to the agreement.

It must include the benefits associated with TPP expansion to include South Korea, the Philippines, Indonesia, Thailand, Colombia, Taiwan and China. It must include the benefits of TPP as a catalyst for an eventual Free Trade Area of the Asia Pacific to include countries like India and Russia. And it must include the benefits of the TPP as an inducement to Europe, Brazil, South Africa and the rest of the world to resuscitate the process of multilateral trade liberalization, which has been mostly defunct for over 20 years.

These enormous potential benefits of TPP ratification this year are also the costs of failure to ratify this year. If the United States fails to ratify the agreement this year, TPP members that are also party to the China-centric Regional Comprehensive Economic Partnership negotiations will be drawn more deeply into China’s ambit.

While that doesn’t mean that U.S. entities will be excluded from engaging in commerce with entities in those countries, it does mean that existing China-centric investment and supply chain relationships will be reinforced, new ones will emerge and become established and the costs of reorienting those relationships in the event of some future TPP implementation will increase with each passing year.

But at a deeper, institutional level, failure to ratify would impair U.S. commercial and diplomatic interests in the region. Foreign governments that incurred political costs to push the TPP in their countries with expectations of U.S. participation wouldn’t soon forget that the United States proved to be an unreliable partner.

Expectations that the United States is still capable of leading the world to the economic liberalization it so desperately needs would erode, and with that diminished credibility U.S. policy objectives would become more difficult or, in some cases, impossible to meet.

Those would be the costs of a U.S. failure to ratify the TPP this year. Avoiding that outcome is President Obama’s obligation to posterity.

Daniel J. Ikenson is director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.

Wednesday, June 8, 2016



Read any good reports lately?

With summer nearly upon us, it’s time to start gathering a list of good reads – both fiction and nonfiction – for those long lazy days at the beach.

USTR Michael Froman already has a  and list sorted out.

And his top candidate in the nonfiction category remains the Peterson Institute for International Economics’ opus on the TransPacific Partnership.

What not to read, according to USTR, is the just-released International Trade Commission analysis of the TPP.

One – the study by the Peterson Institute – reflects the opinion of the “editors” there who generally want to make sure that the end-product tracks their own philosophy that “free trade is good for all.”

The other – the ITC report – suffers from heavy-handed pre-publication editing by an irascible overseer in the form of the US Congress.  The numbers in the report are likely to be correct even though the writing is stilted and lacks adventure.

Even before advance copies of the ITC reached the bookstores, USTR was busy blasting ITC and praising Peterson.  Two days before its release, USTR sent pre-publication reviews to journalists touting how much better the Peterson report was.

In fact, USTR suggested that Congressional testimony by the American Potato Council was a better read.

(An aside.  The day before release of the ITC report a long-time Washington trade wonk remarked to me about the audacity of the Public Citizen organization pointing out the weaknesses of the ITC study – even before it was issued.   He did not know that USTR was following Public Citizen’s lead.)

USTR suggested there was lack of imagination in the ITC report – and the plot took the reader nowhere.  According to USTR, the ITC lacked any type of adventurous speculation – and thus lacked imagination.  It was simply not a good read, according to USTR.

In contrast, the Peterson report was liberal in its speculation that the TPP would put the United States – and the world in general – on the right road to eternal economic happiness.

Public Citizen said both were fictional – “way-out” science fiction with no relation to fact or history.

WTD’s recommendation for long days on the sand:  Plutarch’s Lives, which is much peppier and captures the reader’s imagination while holding to the facts – or various versions of the facts.  Neither the Peterson Institute report nor the ITC analyses contain stories of wife swapping.   Plutarch does.  He was no dummy.  He knew how to get readers’ attention.

The economic bottom line – Peterson predicts a national income increase attributable to TPP of 0.5 percent over 15 years; the ITC says 0.25 percent.  Both could be considered rounding errors.

NOTHING TO GET EXCITED ABOUT!

Jim Berger

Tuesday, April 19, 2016

IN DEFENSE OF TRUMP!


 (I THOUGHT THAT WOULD GET YOUR ATTENTION)


With all the ruckus over Republican Presidential contender Donald Trump’s manners and what he does know and what he doesn’t know about trade, he said one thing right recently.
Mr. Trump told an audience in Vandalia, Ohio, last month that he liked Caroline Kennedy – current ambassador to Japan – but said she is not the type to negotiate trade with the country.  Trade – and righting the out-of-whack trade balance – would be his ambassador’s prime responsibility under a Trump Administration.
Japan currently holds a $69-billion annual surplus with the United States.
Instead, Mr. Trump says he would choose a US envoy who would be a “horrible” human being – crude and vicious – “who nobody would want anything to do with.”
I’ve been in this trade reporting business for a long time.  Here’s a true story that proves Mr. Trump’s point.

The individual will remain nameless to protect his innocence.  This professional trade negotiator was at the height of his career at the time.  He was charged with negotiating a long-standing sticking point in an important trade negotiation with Korea.
The negotiator jetted off to Seoul – unprepared for an extended stay.  No room was booked and he didn’t even have a suitcase packed.  The negotiator got on the airplane, arrived in Seoul and was promptly shuttled off to an official welcoming dinner, according to a very reliable source.
Determined, the negotiator started his work and stayed at the dinner until the early hours of the morning – refusing even to take a break and begin talks afresh in the morning.  The negotiator’s clothing – already rumpled – presented quite a contrast to the impeccably dressed Koreans.
Like Mr. Trump, the negotiator flaunted his typically New York City mannerisms, abruptly calling things as he sees them, with little concern for State Department-style diplomacy.
(An aside, the US negotiator had ripped his pants in a strategic location on the trip and managed to “fix” them with a borrowed stapler – which I suppose made getting agreement from the Koreans all the more urgent.)
Refusing to break off the talks temporarily, the US negotiator continued to pick at his Korean dishes with his fingers – disgusting the very polite Koreans.  Around four in the morning, one Korean negotiator was heard to say to his colleague that he had had enough – and gave in.
Off went the US negotiator to the airport in the same rumpled clothes having settled the issue less than 12 hours from when he arrived.

Yep.  Trump got it right.

Jim Berger


Sunday, January 3, 2016

The Three Stooges In Nairobi




When I was little I looked forward to Saturday mornings to watch Three Stooges reruns on tv  – not so much because they were particularly funny or amusing, but because I was fascinated by the unthought-out antics the three concocted and how things ended up.  It was – for a six year old – mind expanding to see how illogic and stupidity can lead to ridiculous and often disruptive circumstances.

That introduction brings me to the US Trade Representative’s press office run by three contemporary Stooges – assistant USTR for public affairs Matt McAlvanah (Moe), his underling Trevor Kincaid (Curley) and press secretary Andrew Bates (Larry).  And don’t leave out USTR’s head Stooge – US Trade Representative Michael Froman – who reminds me of Shemp Howard, the “fourth Stooge,” who is often cast as an extremely near-sighted bumbling idiot who can’t see past the end of his nose.

Since the beginning of the current USTR’s term two-and-a-half years ago, USTR’s Three Stooges have thrived on attacking Washington Trade Daily almost continuously –


Here’s some of the episodes over those years – all worth a blog of their own –


EPISODE 1 –   WHOOPS,  I’M AN INDIAN!

●        A year ago WTD had an exclusive story from Geneva that the United States and India had reached a deal on the crucial Trade Facilitation Agreement – which was immediately denied by USTR.  Of course, we were correct.  But according to USTR, we were not because a compromise was not final until it was publicly announced by President Obama.  (Huh?)
Deputy USTR Michael Punke immediately went to work in Geneva, sending urgent e-mails from the US mission to the other missions at the WTO saying WTD was wrong and we would retract the story right away.  (Huh?)
Then the follow-up by the Stooges’ office.  We were taken off USTR’s press list and all ties with WTD were cut off – even to the extent that we did not receive ordinary press releases or announcements of public meetings.  Added to that – and what I really can’t dismiss – was charges from Stooge Curley (Kincaid) that our reporting was “un-American.”  (Huh?)


EPISODE  2 –  GRIPES, GRUNTS AND GROANS

●       The same Stooge (Kincaid)  – who apparently now is USTR’s liaison with WTD – took aim at WTD’s reporting on USTR’s “sacred” TransPacific Partnership negotiations for reporting both sides of the issue, particularly Congressional views.
Of course, according to USTR, WTD knows nothing about trade or reporting.  Of particular note is an incident that involved one of the many Capitol Hill press conferences with members opposed to TPP.  It was led by TPP critic Rep. Rosa DeLauro (D-Conn) – a 25-year veteran of Congress.
Well, according to USTR, Rep. DeLauro also “knows nothing about trade” and only parrots what she is told by Public Citizen.  (Huh?).


EPISODE 3 –  MONKEY BUSINESS
●        Another circumstance – gone unreported until now – was a small brief press conference outside of USTR Froman’s office at the Winder Building with visiting European Commissioner for Trade Cecilia Malmström.  Of course WTD was not invited – even though Inside US Trade, Politico Trade, Bloomberg BNA and other “invited guests” were.
Well, WTD got into the building anyway and attended the stand-up press conference.  Overheard was Moe (USTR’s McAlvanah) saying to his European Commission counterpart that we were not supposed to be there.  (Huh?)


EPISODE 4 –  SO LONG, MR. CHUMPS

●        All along over the past two years WTD has received numerous e-mails from USTR calling our reporting inaccurate and wrong.  We regularly requested corrections or clarifications from USTR.  No responses ever emanated.
After a string of such electronic harassments, I finally had it.  The final straw was reached with a series of e-mails complaining – as ususal – about our reporting.  In this case, we were accused of siding with India and not following the Stooges’ spin.  
We did not respond to the emails – but we collected them – until Curley emailed Mary, my wife and partner in WTD, late one evening asking her to talk to me about my biased reporting and that I was ignoring USTR’s communications.
Mary told me about the email and I responded to Curley, saying — “You’re a f***king nut.”


EPISODE 5 –  IDIOTS DELUXE

●       The latest and most nonsensical escapade – again launched by Curley – came two week ago during the WTO Nairobi ministerial conference.  

For further entertainment by the misadventures of USTR’s Stooges follow the verbatim emails below.

(Scene Setting – It was the eve of the World Trade Organization’s 10th anniversary Ministerial Conference in Nairobi.  USTR was contacted several times in advance that WTD would be there and would appreciate being included in any briefings or press conferences.  The response – NONE.
Then a series of mishaps started off with charges by Curley that our Geneva correspondent – Ravi Kanth – participated in an “invite-only” telephone briefing on the upcoming meeting.  In the first email Curley expressed extreme disgust with WTD for its unethical behavior.
(Huh?)  What briefing?  Knew nothing of it and Ravi did not participate.


First e-mail from WTD’s Ravi Kanth to USTR Curley –


Hi Trevor,

I will be in Nairobi from Saturday and request you to include me in all background and other events so to report for WTD.

Appreciate it very much if you could confirm .

Best

Ravi




USTR – NO RESPONSE





Second email from Ravi Kanth to Curley –

-----Original Message-----
From: RaviKanth Devarakonda <drkanth@yahoo.com>
To: TKincaid <TKincaid@ustr.eop.gov>
Cc: Washington Trade Daily <trigtrig@aol.com>; Jim Berger - Washington Trade Daily <washingtontradedaily@gmail.com>
Sent: Sat, Dec 12, 2015 8:35 am
Subject: Wish to attend your briefings in Nairobi


Hello Trevor, 

I wish to request you to include me in background and other briefings during the WTO's ministerial meeting in Nairobi. I have already reached Nairobi and look forward to your assistance so to report for WTD during the next seven days.

Awaiting for your response.

best regards

Ravi Kanth




THE RESPONSE FROM CURLEY –


Ravi

I just landed from Brussels. I understand you were on a call that was invite only. This level of ethical disregard is troubling. I know Andrew explained this very clearly on the call but I wanted to make sure there was no ambiguity over the ground rules. 

The entire call was deep background.  Our definition is below and link is provided where it is available online.

Also, it was made clear the information from the call is embargoed until 12:01a ET Sunday. 


Jim and Mary, I am including you to make sure in the editing process that these rules are respected. Also, I wanted to express my level of disappointment in behavior that I consider lacks journalistic integrity. 

Thank you


NOTE:  On Deep Background
The source cannot be quoted or identified in any manner, not even as "an unnamed source." The information is usually couched in such phrases as "it is understood that" or "it has been learned." The information may be used to help present the story or to gain a better understanding of the subject, but the knowledge is that of the reporter, not the source.- 

>https://ustr.gov/about-us/policy-offices/press-office/Ground-Rules-for-Interviewing-USTR-Officials<

Trevor Kincaid
Deputy Assistant U.S. Trade Representative
Office of Public Affairs
Executive Office of the President




RESPONSE FROM WTD (almost immediately from WTD in Washington)


Trevor, 

  I'm not aware of this situation, so I'm a little confused. Was this a press call that we were supposed to be excluded from participating in?
Thanks in advance for clearing this up
Mary




CURLEY – NO RESPONSE 




Email from WTD in Washington to Ravi Kanth in Nairobi


On Mon, Dec 14, 2015 at 4:33 PM, Washington Trade Daily <trigtrig@aol.com> wrote:

Froman had an article in the Financial Times, which we reported on in the around the globe section today.    USTR told us you were on a phone conference call that you were not invited to -- I think on Saturday or Sunday.  That is what I was referring to.  Were you on that call?   Was it a press call?  What was said -- anything?

That's all.

Jim 




E-mail response from Ravi Kanth to WTD in Washington


Jim: I have no clue because I don't know what he said. but will check and get back.

Best,
Ravi



email from WTD to Ravi –


On Mon, Dec 14, 2015 at 4:51 PM, Washington Trade Daily <trigtrig@aol.com> wrote:
Hi Ravi, 
  I've copied below the email that we got from Trevor, which I assume you received as well. I emailed Trevor asking for more information about whether this was a press call that you were not invited to be on, but never heard anything back from him. Do you have any idea what he's talking about?
Regards
Mary





Email from Ravi Kanth to WTD from Nairobi


Jim,

I don't know what Trevor was talking about because I have not spoken to him or attended any call by the USTR. My wife was furious that I didn't complain about what he is referring to because I never spoke to this guy, nor attended any call.  Please, ask him.  He is telling a lie. I'm very angry. Please check with him.

best
Ravi





Email from Ravi in Nairobi to WTD in Washington 


Dear Mary,

I saw a message from the US spokespersons office about their Geneva visit and sent the following email which I had marked it to Jim.


Hello Trevor, 

I wish to request you to include me in background and other briefings during the WTO's ministerial meeting in Nairobi. I have already reached Nairobi and look forward to your assistance so to report for WTD during the next seven days.

Awaiting for your response.

best regards

Ravi Kanth

After that he sent that nasty email and I reported without raising any murmur. I just checked with the Inside Trade guy who says he was not invited.  You can ask him  [Curley] what he is referring to when I did not participate any of his briefings.  Tell him that I responded to their email about who would be there is Nairobi. 

Best

Ravi





RESPONSE FROM RAVI KANTH IN NAIROBI TO CURLEY


Thanks Trevor.

I just saw it and the rules are fine with me. 

Look forward to your assistance.

best

Ravi



CURLEY  – NO RESPONSE



email from WTD to Ravi Kanth in Nairobi


Ravi

On Mon, Dec 14, 2015 at 3:07 PM, Washington Trade Daily <trigtrig@aol.com> wrote:
You can ignore USTR completely and use your other sources.  They won't be in contact or answer any questions from you.  That is their standard operating procedure with us.

I will be checking the wires from this end from Nairobi.   What did USTR say at that secret phone briefing anyway.  (we asked the press guy if it was a press call.   He did not respond.  I assume Froman outlined what was in his Financial Times article.

Unless things improve there tremendously with the press people I will be in direct contact with Froman once he returns to Washington.   Froman and myself have a good relationship.




Email from WTD to Ravi in Nairobi – 


On Mon, Dec 14, 2015 at 5:21 AM, Washington Trade Daily <trigtrig@aol.com> wrote:

Ravi:
 Just checking to see if we have a connection or if there are any problems -- or if Punke has killed you yet.

Jim





email from Ravi Kanth to WTD in Washington 


From: Ravi Kanth Devarakonda <ravikanth.devarakonda@gmail.com>
To: Washington Trade Daily <trigtrig@aol.com>
Sent: Mon, Dec 14, 2015 8:39 am
Subject: Re: Nairobi

No I have not heard anything from Punke yet.
Also, none from Kincaid and will navigate carefully.
Best

Ravi





WTD’s e-mail to Ravi Kanth in Nairobi


Ravi:  Just wanted you to see this from USTR

USTR NEWS
UNITED STATES TRADE REPRESENTATIVE
www.ustr.gov               Washington, D.C. 20508          202-395-3230

USTR Press Office Week Ahead
December 11, 2015 – December 18, 2015


Friday, December 11
From December 11-19, Ambassador Vetter will travel to Kenya for the WTO Ministerial Meeting.
Nairobi, Kenya
Open press opportunities
For media inquiries, please contact Trevor Kincaid at TKincaid@ustr.eop.gov.


Tuesday, December 15
From December 15-19, Ambassador Froman and Ambassador Punke will travel to Kenya for the WTO Ministerial Meeting.
Nairobi, Kenya
Open press opportunities
For media inquiries, please contact Trevor Kincaid at TKincaid@ustr.eop.gov.



Hi Ravi.  I see that the climate is the same in Nairobi as in Geneva and Washington.    I hope you don't expect to get on a ustr call.   Are they doing one every day?   Let me know.    There is an eight hour difference.  It is 7:40 am here.  We'll do an issue tonight.



Jim 






December 18  Email from Ravi Kanth to WTD  –


Jim:  By the way, Kincaid called Politico and the Inside US trade guys for a background briefing, but not me.

best

Ravi




“THE END”
 by Jim Berger   WTD


Tuesday, December 29, 2015

A Right-On Analyis of What Transpired at the World Trade Organization's Nairobi Ministerial Conference by Tuft's University's Global Development and Economic Institute

Don't Buy the Spin
The WTO talks in Nairobi ended badly and
India will pay a price

Biraj Patnaik and Timothy A Wise
Scroll (India)
December 24, 2015


It didn’t take long for the spin masters to begin working their magic on the latest dismal World Trade Organisation summit in Nairobi. WTO Director General Roberto Azevedo waxed eloquent about the “historic” agreement, stating in a post-meeting press conference that the agreement “will improve the lives of those who most need to benefit from trade, especially those in Africa”.

But what really happened in Nairobi and what does it mean for future trade negotiations?

We've had the Financial Times declaring the Doha Development Agenda dead, if not buried. For those unfamiliar with the Doha Round, it has been the only negotiating platform to discuss the concerns of developing countries, particularly with reference to agriculture and farm subsidies, in the 15 years at the WTO.

While the claims of Doha death are, as Mark Twain might have said, premature, there is no doubt the development agenda has been undermined. Developing countries got very little in Nairobi, official press releases aside, and they are likely to get even less in a future characterised by Southern incoherence and Northern dominance.

Taking stock of the real development outcomes

Beyond the future of Doha, Azevedo and  claimed major advances were made in Nairobi. They touted the “breakthrough” on export competition between countries, cited advances on the controversial issues of special import protection for the agriculture produce of developing countries, and the public stockholding of food. A permanent solution on the public stockholding issue would allow countries like India to buy food grains from farmers at the minimum support price and provide it to the poor under the provisions of the National Food Security Act.

While India has a “peace clause” that allows it to continue with the programme, till such time that a permanent solution is reached, developed countries like the United States, European Union and Japan continue to stall the permanent solution and have rejected every constructive proposal put forth by the developing countries.

In Nairobi, WTO leaders also pointed to the technology agreement and hailed market access agreements for the world’s Least Developed Countries, which are home to some of the planet's poorest and most marginalised communities. And they claimed long-overdue action on cotton.

Sounds good, doesn’t it? Don’t believe the spin.

The technology agreement? It does not affect all countries, just the ones that opt in. China opted in. Kenya didn't. A win for developing countries? Nope: it’s great for technology exporters. Not too many of those in Africa right now.

What about the LDC package? Surely, enhancing access to rich country markets for goods produced in LDCs is good for development? The agreements reached in Nairobi extend so-called “duty-free, quota-free” exports from LDCs, but not all exports are covered. Industrialised nations exclude “sensitive” tariff lines on products such as textiles to such an extent that more than 90% of LDC exports may be excluded.

Agriculture subsidies

The most misleading spin, however, concerns measures in agriculture, so oversold that one Kenyan paper headlined the end of rich country agricultural subsidies. Not by a long shot, in fact, they weren’t even on the table.

What was agreed was an elimination of export subsidies and limits on other forms of rich country export promotion, such as food aid and subsidized export financing, practiced extensively by the United States. This is indeed a positive step – export subsidies are the most trade-distorting of all as they undercut markets in importing countries by defraying some export costs, which in turn makes products from the European Union and the US cheaper in foreign markets. Those products, and the companies that make them, get an unfair competitive advantage, and the WTO long ago agreed in principle to eliminate them.

But the Nairobi agreement really did little more than put a firm cap on existing practices. The EU had already stopped subsidizing its exports, and US resisted putting binding restrictions on most of its export promotion, so the Nairobi deal is unlikely to reduce export promotion much from current levels.

And other Northern agricultural subsidies? They remain untouched, removed from the agenda by the United States and other rich countries. These are indeed the most trade-distorting agricultural policies in rich countries today, as they are very large and encourage overproduction of crops, which then get exported cheaply to developing countries.

The 2014 US farm legislation, in fact, has been shown to likely result in subsidies in excess of the country’s current WTO commitments and well beyond the commitments negotiated in the Doha Round before the US walked away from the negotiations in 2008. And that’s one of the reasons the US walked away.

Spinning cotton

Kenya’s Amina Mohamed put a particularly heavy spin on the cotton agreement reached in Nairobi, saying it “will contribute even more to economic growth in all countries, particularly the Cotton 4 (the four major cotton producing countries in West Africa – Benin, Burkina Faso, Chad and Mali, popularly known as the Cotton 4 or C4) which have been waiting for this outcome for many years”.

But the much-touted cotton deal only gives preferred market access for some cotton products and expedites the elimination of export subsidies. It does not touch domestic subsidies in the United States, by far the greatest source of trade distortion.

So the C-4 can expect to see continued US cotton subsidies estimated at $1.5 billion per year, which will increase US exports 29% and suppress cotton prices 7%. This will cost the C-4 an estimated $80 million per year in lost cotton revenues. That is more than 300 times the gains last year from market access under US Africa Growth and Opportunity Act, which totaled just $264,000.

Jump-starting further negotiations?

Officials most hailed the Nairobi agreement for reinvigorating the WTO’s negotiating function, and there is no doubt that reaching an agreement prevented the complete abandonment of the institution by rich countries.

But the agreement itself, by failing to reaffirm clearly the commitment to the Doha Round, eliminated any incentive for rich countries to negotiate. They can now condition further negotiations over “outstanding Doha issues” on the inclusion of “new issues”, a huge setback for developing countries.

Developing countries won only vague commitments in Nairobi to resolve the public stockholding issue and to enable a safeguard mechanism to slow import surges that undermine domestic producers, a right rich countries have enjoyed for years. Expect no further progress unless developing countries are prepared to pay a price, such as putting public procurement that favours domestic industries on the chopping block.

After Nairobi, it is hard to imagine US negotiators even discussing reductions in its domestic farm subsidies. If they do, what will India need to give in return? Perhaps a WTO version of the kind of investment agreement that India has firmly rejected in bilateral talks with the US.

India caved in

At Nairobi, despite a valiant fight put up by Indian negotiators, in the final moments of the drafting of the ministerial declaration, the political leadership caved in and refused to seek amendments to it, or block it, as they could have done. Commerce Minister Nirmala Sitharamans’ predecessors Murasoli Maran and Kamal Nath had done precisely this in past ministerial summits, protecting India’s interests at the WTO.

But with little support from the political leadership at the highest level, Sitharaman, invited into the select group of five countries (with the US, EU, Brazil and China) to negotiate the final text of the Nairobi agreement, let the rich countries have their way. In the end, she merely expressed her “disappointment” at India’s red lines being breached with no reaffirmation of the Doha Development Agenda in the final ministerial, no permanent solution on the public stockholding issue and just a promise to negotiate an unspecified safeguard mechanism for developing countries.

The price that India will pay for this in the years to come will be far higher than what the government is willing to concede now, as future generation of negotiators will discover.

Biraj Patnaik is the Principal Adviser to the Commissioners of the Supreme Court in the Right to Food case. Timothy A. Wise is a researcher at Tufts University in the United States.
 
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