Time is running out for the Doha Round. It’s been said so many times, but this time it really is true. To see why, count back from July 2007. That is when President Bush’s fast-track authority, which forces Congress to vote on trade deals without the possibility of amending them, is due to expire.
With the president so unpopular, the trade deficit so huge and the
prospect of a Democratic majority in Congress by then, the chances of
fast-track being renewed are vanishingly slim: it only passed by one
vote the last time around.
But without fast-track, Congress could amend
any WTO deal to death, unpicking the bargain American negotiators had
painstakingly struck with the other 148 WTO countries and thus making
it unacceptable to them.
So if July 2007 is the deadline for Congress
approving a WTO deal, early 2007 is surely the absolute latest an
agreement could be reached if Congress is to have enough time to
scrutinise and vote on it.
That in turn means that this July, or at a
real push September, is the deadline for reaching the outlines of a
deal, with the details hammered out in the final months of this year.
So how near are trade negotiators to striking that big political
bargain?
Important elements are in place. The contours of an eventual deal are clear. The grand bargain involves the EU
and the US opening their agriculture markets – the EU cutting its farm tariffs,
the US its subsidies – in return for greater access to industrial and services
markets in developing countries, notably India and Brazil.
The poorest
countries also need to be bought off with duty-free access to EU and US
markets; in particular, the US
has to hack down its cotton subsidies, while the EU has to compensate its
ex-colonies for eroding the margin of their preferential access to EU markets.
Negotiators have a pretty clear idea of each
other’s true bottom lines. What is lacking is political will.
The paradox of Doha is that an ambitious deal is an easier sell than a modest one. A "Doha lite" would still involve political pain, since EU and US farmers will object to any cut in agricultural support, while offering little for exporters to get excited about. They might prefer to spend their political capital on securing bilateral trade agreements instead.
But a more ambitious agreement would not only make cuts in US farm subsidies easier to swallow, by giving US farmers new export opportunities in Europe and elsewhere. It would also give US and EU exporters of manufactures and services eyeing up new markets in India and China something to fight for.
The problem, as always, is getting from here to there. Tony Blair is said to be keen to hold a summit to break the logjam. He had better hope that his good friends George Bush and Peter Mandelson are on the same wavelength.