|When the Senate confirmed Susan C. Schwab as the Bush Administration’s Trade Representative June 8 - the second trade rep in just 13 months - it did so by voice vote, an uncommon occurrence for the usually-on-the-record body.
Contrary to rumors, the Senate’s swift action wasn’t because it needed to lock Schwab into the office before she discovered just what a mess the U.S. negotiating position in the World Trade Organization’s endless Doha Round really is.
Schwab knows that fact all too well. After all, before formally succeeding Rob Portman as America’s top WTO talker June 12, she served Portman as deputy trade rep for troublesome Europe, the Middle East and North and South America.
The closer truth is that the Senate acted fast because America needed her on the job fast. The reason is as simple as it is obvious: the Doha Round is swiftly stumbling toward an empty-handed ending. Every fact, news story and new WTO analysis since her late-April nomination points to it.
For example (or three), take the news of just June.
On June 1, the American Farm Bureau Federation and the leading soybean, sugar, wheat, barley, corn, cotton, milk, rice and canola farm groups sent a tersely-worded letter to President Bush warning the Administration that “American agriculture will not support any deeper cuts in domestic support than those already proposed” by the White House nearly two years ago.
The letter, which restated the groups’ firm quid pro quo - domestic subsidy cuts for increased overseas market access - went on to warn that “if negotiators are forced to scale back the level of ambition from the U.S. proposal” on market access, then the “level of ambition in cutting trade-distorting domestic support must be commensurately reduced...”
If the White House didn’t get the message, Geneva got it loud-and-clear. On June 2, the chairman of Doha’s ag negotiating group abruptly announced the end of informal talks between the world’s big ag players - like the U.S., Europe, Japan, Brazil and India - because no nation had budged one inch in one week.
All bodes badly for an ag agreement, the linchpin for any comprehensive WTO deal, and its July 31 deadline. The U.S. doesn’t need Schwab as much as the WTO needs a miracle and no such water-into-wine (Evian into champagne?) feat is in the offing.
Worse, another exhaustive economic study on the effects a perfect trade deal might deliver again tarnishes all the brassy, boom time talk emitted in Geneva, Brussels and Washington.
The study, titled Winners and Losers, by the highly respected Carnegie Endowment for International Peace (www.carnegieendowment.org/files/BWfinal.pdf), is coldly clinical in its assessment:
“The most important finding at the aggregate, global level is that any of the plausible scenarios will produce only modest gains, on the order of a one-time increase in world income of $40 to $60 billion.”
(Emphasis by Carnegie authors.) “This represents an increase of less than 0.2 percent of current global gross domestic product.”
The puny gain from all today’s gut-splitting and head-banging, the study goes on, “... goes far in explaining the lack of urgency demonstrated by WTO negotiators.”
In short, the negotiators get it. Doha, even if it delivers a fairer, more level global trading field, will put just $8 to $10 in the pockets of each global citizen.
Well, that’s not exactly true. The way today’s corporatized global trade works is that the rich get richer and the poor get stiffed.
Winners and Losers states it this way:
“The benefits of agricultural trader liberalization flow overwhelmingly to rich countries, while developing countries actually suffer slight losses as a group.”
A few (debatably) developing nations - Brazil, Argentina, and Thailand - would gain under a Doha deal.
The biggest losers, however, the Carnegie study shows, are the very nations the Doha Round were to help, “... Bangladesh, the countries of east Africa and the rest of Sub-Saharan Africa, Vietnam, Mexico and China...”
None of this is surprising. Every independent examination of Doha has shown it to be a dog. Rather than kick it, maybe U.S. farmers should let it simply lie.
This farm news was published in the June 21, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.