A Failure for Trade

Wednesday, July 26, 2006

IN THE AFTERMATH of the terrorist attacks of Sept. 11, 2001, the United States and its allies launched the Doha round of global trade talks. The aim was to reduce trade barriers that particularly harm developing countries, with the hope of spreading prosperity and dimming the appeal of terrorists who assert that the global system is unjust. Five years later, the struggle against Islamic radicalism is hardly going swimmingly. But the world's leaders are tired and complacent. On Monday they allowed the Doha round to collapse.

The failure came one week after the Group of Eight meeting in St. Petersburg, at which the world's dominant powers promised to break the negotiating deadlock. Even in the best of times, the G-8 is a suave issuer of hollow promises, but seldom have any proved this empty this fast. Rather than following up their G-8 pledge by authorizing trade ministers to return to the bargaining table with fresh concessions, the heads of state sent them back into the fray with hardly any extra flexibility. The result was predictable. The Doha round has now been formally suspended, and there is virtually no chance of its revival before the expiration of President Bush's trade promotion authority next summer.

The main players lost no time in pointing fingers at each other. The truth is that both the United States and the European Union made political decisions not to confront their farm lobbies, even though agricultural liberalization is at the heart of the Doha round. European timidity owed something to the diminished status of Britain's prime minister, Tony Blair, who is beset by poor poll ratings and a whiff of scandal, and much to the wimpy French government, which retreats from pro-market reform when bullied by demonstrators. Meanwhile, the Bush administration faces tough midterm elections and has no stomach for alienating farmers. The leading developing countries, for their part, offered only minimal market opening.

Yet while the failure of the Doha round can be explained politically, it makes no moral or practical sense. Many aspects of the war on terrorism involve genuinely hard trade-offs: how to balance security and civil liberties, how to balance military force with the quest for hearts and minds. But pro-development trade liberalization is a win-win, a no-brainer: It is good for the rich economies that cut the trade barriers as well as being good for exporters in developing countries. The Bush administration, like other recalcitrants, chose not to make fresh "concessions" that might have saved the Doha round, but these so-called concessions would merely have limited its funneling of billions in taxpayers' money to large farmers, a policy that makes no sense. Indeed, the administration itself declares that it wants to cut farm subsidies. So what is the sense in triggering the collapse of trade talks in order to preserve them?

© 2006 The Washington Post Company