Dissapointing News about the Doha Round

July 31, 2008 The media is reporting today that the latest round of WTO talks has (again) collapsed. Having been involved with trade talks since the mid 1970's, my reaction is 'it ain't over until its over.' Talks may string out over time but they eventually pick up where they left off. That being said, today's news comes at a difficult moment for the world economy. The US is finally accepting that it is in recession (housing prices nationwide down 16% yr/yr and where I live 35%) and there is a real credit crunch at this moment. Europe, also suffering from a bursting real estate bubble and run-up in oil prices, also faces a period of slow growth -- perhaps even a downturn. It's at times like these, that our political leaders have to take brave steps of keeping open and expanding markets despite domestic political pressures from declining industries. It is particularly ironic, however, that China and India seem to bear the responsibility for the latest breakdown in the trade talks. Their economies have the most to gain and the most to lose in this period of economic uncertainty. Both have just emerged on the world stage as important exporting nations. With that newfound status playing as equals on the stage of the major industrialized countries, comes the responsibility to resist domestic political pressures to protect traditional markets. Having benefited from GSP and other programs, their products have had for years preferential access to developed country markets with little required in return. To go the next step, the countries will have to make meaningful concessions, particularly in agricultural markets. Ag markets worldwide have been the last to lose protection, but trade barrier reductions in this area that will benefit consumers worldwide, particularly as we see food commodity prices soar and shortages develop. There is no question that overall the world is better off for having undertaken over a half-century of tariff and trade barrier reductions. We are a much more interdependent world and political relations between countries have strengthened as trade ties have increased. It's always a hard sell to the public, but our political leaders know the benefits. And that is why we will have to complete these trade talks, eventually