Doha. Let's take the last of these first. We were not in Kenya last week. Your editor sat out this last WTO Ministerial on a hillside in Portland, Oregon. Still, our strong impression is that clearly articulating this difference within the confines of the Nairobi Ministerial Declaration was perhaps the conference's greatest achievement. And it was collective one, relying as it did on the leadership of USTR
Michael Froman, whose comments in advance of the ministerial pointed the way to just such an outcome; the genius of Director-General Azevędo and his management of the difficult politics of the WTO; and the skill of
Amina Mohamed of Kenya, who chaired the conference, and who was clearly determined to make this first WTO ministerial in Africa a success. Congratulations to all.
Time will tell just how one should look at all of this. We tend to think of those who declare that Doha is dead as more right than wrong. But death, even the death of a negotiation, is only part of a process. There is mourning, and that too is a process.
We were in Hong Kong for the 6th Ministerial. Land is way too expensive there for many to afford a burial plot, but you can rent one for five or ten years. We are fuzzy on the details here. Suffice it to say that Doha is likely to be a staple of WTO declaration for a while longer. But this was the turning point. Yes, it was a case of same church, different prayers. The result, however, is that the church is stronger.
Nairobi and U.S. law. Of the issues highlighted above, two raise the question, will U.S. law need to be changed in any way? With respect to the first of these, the expansion of the Information Technology Agreement, it should be pretty straightforward. Our understanding is that the President's existing tariff proclamation authority is all that will be needed to cut those U.S. tariffs that will need to be cut for the new ITA agreement to go into effect next July. Still, even here there are some procedural formalities - notifications to Congress etc. - that need to be observed.
Agricultural Export Subsidies. As for the commitment by developed countries - certainly including the United States - to eliminate agricultural export subsidies immediately, we assume that, implicitly, the U.S. has already done what needs to be done and that no further changes in U.S. law are required. But that is only an assumption. We are not certain on this point. Moreover, some press reports from abroad suggest that at least some of America's trading partners do expect U.S. practice to change for the products they care about.
On the other hand, there is no hint of a need for such change in the statement issued by Representative
K. Michael Conaway (R-TX) after the conclusion of the Nairobi conference. Mr. Conaway is the chairman of the House Committee on Agriculture. While he praised some elements of Nairobi decisions, he was quite critical of others, especially the decision to give developing countries a pass on certain subsidies. He said:
"I am concerned that the agreement reached in Nairobi allows developing countries to continue to use export subsidies for transportation and marketing for another eight years even though the United States has held the position that the authority of countries to offer these sorts of subsidies expired back in 2004."
Cotton. Here too Chairman Conaway expressed concern. Yes, he was pleased that the WTO acknowledged reforms to the U.S. domestic cotton policy. It was what was missing from the Nairobi decisions that troubled him.
"I am disappointed," he said,
"that some acknowledgement was not made concerning the deeply harmful impacts that China and India's domestic cotton policies are having upon cotton farmers around the world." We think the chairman has a point. Cotton is big business in the United States, accounting for some 420,000 jobs - including both direct and indirect employment - and more than $100 billion in activity. China and India, though, are the really big producers, each with its own support system, and China is by far the world's largest user of cotton.
Against those realities, it is hard to read the WTO's work in this area as economically meaningful to the Cotton Four or anyone else. If the major producers and consumers are developing countries, then a policy that gives developing countries a pass is, almost by definition, not especially meaningful. Having said that, we do not discount the potential significance of China according duty-free, quota-free treatment to cotton from the least developed countries.
The point remains, however: the WTO's work on cotton has arguably been more divisive than constructive, and has felt more like an attempt at managed trade than liberalization.
