Rescue the Doha Development Agenda
Following World War II, America's Greatest Generation, working with friends and allies overseas, built institutions they hoped would secure a peaceful, prosperous world for their children. The United Nations, the World Bank, and other international councils were founded on these high hopes.
None of these have succeeded as spectacularly as the institutions created to foster and expand global trade: The General Agreement on Tariffs and Trade and its successor, the World Trade Organization (WTO). Nine multilateral negotiating rounds have increased world trade from $80 billion in 1947 to $15 trillion in 2009, allowing incomes to rise in country after country. The latest of these is the Doha Development Agenda, which could boost the worldwide economy by as much as $700 billion, according to the Peterson Institute for International Economics.
However, the Chamber and its members concur with U.S. Trade Representative Ron Kirk that the Doha Round negotiations are in a very difficult spot. Leading players in the negotiations such as China, India, and Brazil have made negotiating offers to date that promise little or no new market access for U.S. exporters. As a result, the agreement implicit in the current negotiating texts is not politically saleable in the United States.
As several key trade ministers have conceded, the work to date should not be discarded, but the Round needs new thinking and creative approaches to break the logjam that has doomed a series of Ministerial meetings to failure.
For the negotiations to succeed, the United States needs to see much more progress on services, which continues to be an afterthought to the agriculture and industrial goods negotiations. Congress will not approve a Doha deal that fails to generate new access to global services markets.
New market access for manufacturers can be achieved only through the inclusion in the Round of "sectoral" agreements. These agreements aim to liberalize trade for industries of particular promise, with robust participation from developed and advanced developing countries, as well as ambitious results on non-tariff barriers.
The Chamber supports reductions in U.S. agricultural subsidies and will continue to push for responsible reform of agricultural programs. However, such reforms must be matched with market openings by our key trading partners.
Above all, U.S. negotiators must secure greater clarity regarding how all key WTO members — including advanced developing countries — intend to use special exceptions and safeguards that will maintain protectionist barriers around many sectors. To date, the negotiations have been too opaque to allow a clear vision of the Round's likely benefits.
Whether the Doha Round will make a positive contribution to the global economy will depend on whether it provides meaningful new market access for all WTO members, including the United States. In this sense, the Round's success is a shared responsibility. Influential countries such as China, India, and Brazil must join with the United States and the EU to negotiate an agreement that in fact eliminates existing trade barriers. Only a far-sighted and ambitious agreement will provide a real stimulus to global economic growth and living standards.
Chamber Recommendations
- The United States must recommit itself to a successful outcome in the Doha Round for the benefit of American workers and people around the globe, which may require cuts to U.S. agricultural subsidies.
- However, other major players in the Round must reciprocate with more robust offers in services, "sectoral" agreements for key industries, and greater clarity all around.