Wednesday, August 29, 2012


There are no expectations here in Geneva – regardless of who wins the Presidential election in the United States – that negotiating activity will be anywhere near as rapid and furious as it was during most of the previous 10 years of the Doha Development Agenda negotiations.

However, when World Trade Organization trade envoys return here next week from their traditional August recess, they will meet up with some unfinished business. For a start, they are expected to intensify ongoing negotiations on trade facilitation – a leftover piece of the moribund Doha round.

Trade facilitation remains an area of importance to industrialized countries, particularly the United States. A number of developing and some least-developed countries also view it as important – but for different reasons. The last round of TF meetings in July saw a huge turnout of officials from least-developed countries thanks to travel funds provided by the European Union and Norway.

So far, progress in the negotiations has been halting due to the continued wrangle over some very big trade-offs. Industrialized countries, for the most part, want binding commitments on a range of very specific disciplines – publication and availability of information, advance rulings, expedited appeal procedures, fees and charges, the release and clearance of goods aand expedited shipments and transit.

But developing countries want to see some promises from industrial countries on things like special and differential treatment – particularly on technical and financial assistence to implement their TF commitments. They also want more commitments on customs cooperation.

The next four months will show whether members are ready to enter into a give-and-take phase to advance the negotiations towards closure next year.

Some countries also might press for an honest discussion on "balance" issues within the TF negotiations and between TF and other areas, such as the "LDC package", "cotton" and agriculture export subsidies. China, India, Brazil and South Africa have already strongly suggested that it would be difficult for them to join the trade facilitation agreement without knowing the fate of the DDA negotiations.

The fact remains at this point that big developing countries still doubt the intentions of some industrialized countries over whether they would continue to embrace the Doha agenda if an agreement on TF is concluded.

Another priority for the United States is a plurilateral agreement on services liberalization. Washington has succeeded in mobilizing support for what it calls an international services agreement.

The United States has some powerful backers – including Mexico, Chile, Colombia, Peru, Costa Rica, Singapore, South Korea, Hong Kong, Pakistan, Taiwan and Israel, among others.

But in spite of several rounds of intensive technical meetings since last March, the plurilateral negotiations remain stillborn. It is without any defined or distinguishable features, particularly about the level of ambition concerning the coverage of sectors and the compatibility with the General Agreement on Trade in Services.

Opposition from some other big developing countries – including China, India, Brazil and South Africa – is more basic. They view the plurilateral effort as an attempt to poison the multilateral framework in general, and Doha negotiations in particular.

Next year will also be at least symbolically important for negotiators as the political process begins toward choosing the next Director General. Pascal Lamy, by the end of next year, would have served two full terms.

A former European Commission official and French technocrat, Mr. Lamy took over the WTO reins long ago in 2005. Unfortunately, Mr. Lamy was not able to bring the Doha negotiations to a close. Its final demise, expected to be pronounced next year at the December Bali ministerial meeting, will have been the first major multilateral trade negotiation to fail.

The Director General, however, is not to blame. He can only try to direct what the majors want – and do his best efforts to get members to go along. Unfortunately, the major players – particularly the United States – never really had their priorities set on a successful conclusion. That especially was the case during the second part of the Bush Administration and the last four years of the Obama Presidency in the United States.

Some here blame Mr. Lamy’s excessive emphasis on selective ministerial involvement which sidelined the majority of members – mostly developing and least-developed countries. In retrospect, some here say a more comprehensive envoy- and official-level involvement would have kept the oxygen flowing to the patient. It would have led to "agreed" compromises at the working level, reserving ministerial involvement to simple "yes’s" or "no’s".

Some also blame the French bureaucrat for remaining indifferent to calls for more democratic and decentralized functioning within the organization. That process inevitably led to low morale among Secretariat staff and member delegations. Institutional memory and plurality of views are two major ingredients of any big multilateral effort, such as Doha. But diplomats here – many playing the role of "Monday-morning quarterbacks" – see Mr. Lamy’s two successive terms as having eroded these "noble" conventions.

Already the political tussle for the top job has commenced. Most suspect the final contest will be one between a South American and African candidate. Neither continent has had a chance to lead the WTO or predecessor General Agreement on Tariffs and Trade.

Expectations remain high for US leadership after the November Presidential elections. With most diplomats here self-described as "die-hard" internationalists, few seem to savor the prospect of a conservative Republican becoming US President. They look forward to a second-term President Obama to shift emphasis away from persistent domestic economic problems – many of which have led to some questionable protectionist practices – to the international arena.

Should current chief White House international economic advisor Michael Froman become US Trade Representative, envoys here suggest movement beyond Trade Facilitation – perhaps leading to reinvigorated discussions on expanding duty-free treatment for much technology goods, like information and communications equipment.

With the recent entry of Russia into the world trade body, the BRICS – Brazil, Russia, India, China and South Africa – also are expected to assume a bigger role in WTO decisionmaking.

The least-common denominator for next year is that by the time of the Bali ministerial, there will be a Trade Facilitation agreement ready for final approval and the formal close to the ill-fated Doha round.

Optimists are suggesting that 2014 might see the launch of a new round of negotiations on sectoral agreements.


Ravi Kanth and Jim Berger

Thursday, August 16, 2012


Whether it’s the Financial Times, the New York Times, the Dubuque Telegraph Herald or a newsletter like Washington Trade Daily, reporting is serious business.
Mistakes can be made, but they must be inadvertent and quickly corrected. Otherwise, serious mistakes can have serious ramifications.
At a well-attended forum of the Woodrow Wilson Center for International Scholars last week which focused on the ongoing TransPacific Partnership negotiations, one Mexico participant – gladly not a negotiator or government official – explained that Mexico City, and especially members of the Mexican Senate, were perturbed over a comment by chief US negotiator Barbara Weisel.
In remarks in San Diego to the University of California’s Americas Institute at the beginning of the last formal round of TPP negotiations in July, Inside US Trade reported that the official stated that when – and if – Japan decides to the link up to an anticipated completed TPP agreement, the text would be opened for renegotiation.
The Mexican trade consultant said the problem seen in Mexico City is that while late-comers like itself and Canada would not be able to even discuss "agreed" aspects of an uncompleted agreement, Japan would have a "carte blanche" to essentially reopen the negotiations when it joins.
What Ms. Weisel said at the open forum was that any prospective new entrant to a final accord – including Japan – could bring to the "table" issues that are of particular interest to itself. If the other signatories agree, those issues could be subject to negotiation, possibly resulting in the changes to the final text.
The US trade official responded to a question from the audience about how Japan’s entry would be handled.
WTD took pity on the rooky trade reporter and told him what Ms. Weisel actually said. Writing wrote what he said he would write would result in a correction or retraction, we advised.
The reporter essentially told WTD to mind our own business. He said since the chief US negotiator had cited Japan as an example of what could happen when a new members joins, "she meant Japan." He was sticking to the story.
USTR staff told other reporters covering the negotiations that the Inside Trade story was wrong. Inside Trade never carried a correction.
Last week Inside US Trade was roundly congratulated at the Woodrow Wilson center event – including from its supposedly informed staff of experts – for having a major "scoop." In fact, the Inside Trade story was poop.
WTD – unlike Inside US Trade – takes it reporting responsibilities seriously.

Jim Berger

Tuesday, August 7, 2012


The national election in the United States is still three months away, but all the attention – and news reporting – is turning to the campaign.
Trade – with the exception of the North American Free Trade Agreement a quarter of a century ago – has not been a major issue in any national campaign. For the most part, Democrats and Republicans see trade – both exports and exports – as good for the economy.

President Obama.

Candidate Obama is out in the hustings campaigning full time by mostly attacking his opponent rather than defending his accomplishments. That’s because there has been none. The recession continues strong and deep.
But recently Candidate Obama has grasped the catch-phase of wanting to be America’s "in-sourcing" President. He has continued to blast former Massachusetts governor and rich private businessman Mitt Romney as the "out-sourcing" candidate, who made his millions by helping US companies move overseas and taking jobs from Americans.

President Obama has little else to talk about when it comes to trade. His accomplishments over the past four years have been zilch.

When a Presidential candidate has to resort to the "trade" card in campaigning, you can assume that things are indeed desperate.

Now to Mr. Romney.

Apparently Washington Trade Daily had an impact on the Romney campaign a couple of months ago when it published a detailed interview with chief trade campaign advisor Carlo Gutierrez. His answers to our questions were extensive and detailed.
We learned that the article dusted up some controversy within the campaign between those – unlike Mr. Gutierrez – who want candidate Romney to steer away from details on specific issues until necessary.
Just last week Mr. Romney seemed to side with Mr. Gutierrez – and some others in the campaign – by mentioning in a speech in Golden, Colorado, that he would push for free trade with Latin America.
If Mr. Gutierrez – and WTD – is to be believed, expect a real business approach to economic growth, with a lot of focus on tax reductions and trade. Aside from the renewed approach to trade with Latin America – an idea first raised by President Reagan – you can expect Mr. Romney to re-start the nation’s trade engine. Mentioned by Mr. Gutierrez in the interview were closer US trade ties with the fast-growing economies of the Association of Southeast Asian Nations and even a free trade agreement with Japan.

How to tell.

The best scenario for President Obama is that the November 6 election outcome will be very close. But one thing is certain, whoever wins the Presidential "gold" will likely have to deal with a difficult and split Congress.

Political pundits often describe the second term of any sitting President as focusing on foreign policy. They suggest Mr. Obama would naturally turn to international economics and trade rather than repeat failed US military foreign adventures in exotic areas of the world.
What to look for –

US Trade Representative Ron Kirk will not be around for the second term – something he has already said.
Should the White House pick the President’s current chief international economic advisor, Michael Froman, for the post there is hope. There was a lot of "rumor" talk around Washington about a year ago that Mr. Froman – who has demonstrated a positive interest in a forward-moving trade policy – would replace Mr. Kirk at that time. But Mr. Obama is loathe to do away with any of his cabinet members – no matter how badly their performances. So Mr. Kirk stayed on.

(In fact, at that time a high-ranking US trade official asked WTD in confidence – and almost in desperation, but in earnest – when Mr. Froman was coming on board. WTD had no good news for that negotiator.)

If it’s Mr. Froman, you can expect somewhat of a turn around – which could be described as a resurrection from the moribund US trade policy of the past four years.
If it’s someone else – say current Deputy US Trade Representative Demetrios Marantis – look for more of the same in the second term.
A second-term President Obama might even leave the post vacant, since he is still personally committed to a "go-nowhere" plan to build a super trade department, essentially doing away with USTR.

If it’s Romney, look for retiring California conservative Republican David Dreier to assume the USTR post. The current House Rules Committee chair and strong free-trade advocate has been expressing those wishes to friends in Washington for quite some time.
Another big plus for a resurrected US trade policy would be the selection of Sen. Rob Portman of Ohio to be Vice President. Mr. Portman was President Bush’s US Trade Representative and is well respected by pro-trade advocates in the United States and foreign diplomats who knew him during his one-year stint from May 2005 to May 2006. Apparently, he is on Mr. Romney’s short-list of candidates.

Actually a lot hangs in the balance for US – and global – economic recovery.

Jim Berger