Rescuing Trade

Sunday, April 30, 2006

TODAY WAS SUPPOSED to be the deadline for a breakthrough in the Doha round of global trade talks. But since setting this target at their Hong Kong meeting in December, trade ministers have made virtually no progress, and they seem ready to give up. That would be an awful error. A trade deal would secure important gains, and the negotiating obstacles are surmountable. The key is for a coalition of pro-trade governments to isolate France.

A successful Doha round would contribute to the struggle against poverty. Negotiators have agreed to scrap nearly all the barriers faced by exporters from at least 32 of the world's poorest nations and to eliminate the export subsidies that help farmers from rich countries compete unfairly against poor ones. These concessions, along with the faster global growth generated by cuts in barriers faced by rich and middle-income countries, would lift perhaps 10 million people above the $2-a-day income line over the next decade, judging from scenarios constructed by the World Bank. Meanwhile, rich countries would gain also: from expanded opportunities for exporters; from cheaper imports for consumers; and (in the U.S. case) from the obligation to trim trade-distorting farm subsidies that damage the environment and waste taxpayer dollars.

The chief obstacle to a deal is the European Union, driven by countries with highly protected small farmers -- Ireland, Poland and, above all, France. Last year the Bush administration proposed cuts in farm subsidies that, even after stripping out accounting tricks, amounted to a genuine concession. It was then up to the European Union to reciprocate, but removing such tricks from its proposal left virtually nothing of substance. When negotiators tried to shift the Europeans at the Hong Kong meeting, French President Jacques Chirac personally called officials to ensure that progress would be blocked.

Since then France has become even more of a problem. Mr. Chirac's government recently withdrew, in the face of student protests, a modest reform of labor law. After that show of weakness, there is no prospect that this non-leader will confront France's protest-happy farmers by cutting agricultural protectionism unless the rest of the world confronts him with a clear dilemma: Quit blocking Doha or accept the shame of causing its failure.

So far that choice has not been put to Mr. Chirac with sufficient clarity. Negotiators have engaged in evenhanded diplospeak, urging all parties to contribute commensurately, blah blah blah. Where they have alluded to French obstructionism, they have been quick to add that the U.S. farm offer is not perfect or that Brazil, India and other middle-income countries have yet to spell out cuts in industrial tariffs. These qualifiers are true; but the larger truth is that French farm politics is the single biggest holdup. Until the rest of the world says that and particularly until traditional French allies say that, Mr. Chirac will not be shamed into changing his position. He needs to be made to feel that things he cares about -- France's reputation as a friend of Africa, France's close policy ties with Germany -- will suffer if he allows the Doha round to die.

There isn't much time left. The Bush administration cannot negotiate credibly without trade-promotion authority, which guarantees that an intricate deal will be given an up-or-down vote in Congress rather than being picked apart with amendments. That negotiating authority expires in the summer of 2007, and Congress is unlikely to renew it. The window of opportunity is closing fast.


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