TradePolicy.ch

WTO - READY FOR A NEW START IN THE NEW YEAR

2012-01-15T15:58:00.003+01:00

After a (let us face the reality) grand failure of Ministerial Conference number 8, December 15 - 17, 2011 (MC-8 in WTO speak) the time has now come to think about a new start - for those that do not agree, check out what WTO knows to say about MC-8 . Fortunately, there were the WTO membership admissions of of Russia, Montenegro and Samoa that could be celebrated.

There are good arguments for a new start, here some facts and related comments:

The Uruguay Round has been and continues to be an extraordinary success - in particular in respect to Trade in Goods. Its main (among the many) achievement - conversion into tariffs of non tariff trade restrictions - has yielded enormous results and continues to facilitate trade for decades to come.

While we can recognize the success of the UR, its results are not fully implemented, yet.
The levels of quality and ambition in the implementation of other commitments, for example in the area of subsidies, continue idling along without much motivation.

Technical barriers to trade in particular have replaced tariffs as the key obstacles on the path towards a vision of free and efficient trade.
Need an illustration?
WTO itself introduces the TBT-Agreement with the following words:

"The Agreement on Technical Barriers to Trade tries (emphasis added) to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles, while ..."

Conclusion:
Trying to do something is not enough, it needs be done.
Why not go for an unspoilt agenda that will set the focus

on just two easy and practical issues ?

UR Implementation in General:
Towards a new Level of Ambition and Quality

Technical Barriers to Trade:
Strengthening of the Institutional and Regulatory TBT Framework - based on 21st Century Trade

Even "Smaller Steps" appear to be beyond the reach of the 8th Conference of Trade Ministers

2011-12-11T11:26:00.003+01:00

For most of the 2 years that followed the failed Geneva Conference of Trade Ministers held in December 2009, trade diplomats in Geneva have been keeping themselves busy by scaling back expectations for the Doha Round in general as well as for specific, measurable results from the upcoming Ministerial Conference, starting December 15, 2011.

A few months ago, a strategy of smaller steps was deemed a possible approach - well, modesty (and not ambition) seems to have become the virtue of turn at WTO headquarters - this conclusion imposes itself when listening to the General Council Chair's statement in respect of the expectations for this 8th Conference of Trade Ministers :

Two main objectives:

Ministers to take stock of the situation and the economy
New approach for successfully concluding the Doha Round

Three main outcomes:

Consensus on a new approach for the way forward
Members recognize that WTO goes beyond negotiation
Agreement / Package for LDCs

The good thing is that WTO appears to be gearing up for a fundamentally new Doha approach - bad is, that this result has been overdue for years, and valuable time was lost.

This new approach will have to account more seriously for legitimate concerns in respect of the limits of the invisible hand that wisely governs free trade .... probably the best example, from the agricultural negotiations:

The need for multilaterally accepted policies
in favor of national / regional food sovereignty

In the meantime, bilateral trade agreements continue to proliferate like malign cancers, creating a framework becoming more complex and confusing at astonishing pace. In fact, the cobweb of bilateral agreements is likely to have become the single most important obstacle to progress for WTO trade agendas - even though nobody dares to mention this matter.

Are "Smaller Steps" way out of the Doha deadlock?

2011-10-23T12:28:00.002+02:00

The Trade Negotiations Committee of WTO eyes a path of 'smaller steps' as a way out of Doha impasse. - click the hot link for details from the Oct 21 2011 meeting.

Unfortunately, smaller steps, concentrating on "... a deadlock-breaking path for the Doha Round perhaps by starting on issues where an early agreement might be possible" only illustrates the situation of despair in which trade negotiators are caught.

Two reflections to underscore this view:

1. Along the now 10 years of Doha-Round negotiations the size of steps - say level of ambition - has been decreasing steadily until approaching the value of zero in the post Hong Kong Ministerial Conference period (2006 to present). The pretension, that the ambition (say steps) can be reduced further from a level of close to zero in order to achieve progress, implies that the only common denominator is the maintenance of the status quo.

2. The world has undergone fundamental changes between 2001 and 2011:

Energy policies become part of, or influence agricultural support measures
Boom of emerging economies
Crisis in Europe and North America

These few elements alone underscore the need for
the single bold step (say a new agenda)
rather than for the infinitesimal steps.

?Is Trade still on the Agenda?

2011-07-03T10:25:00.004+02:00

Dear Visitors

Trade has effectively been removed from the agenda of our society, the politics and the public opinion-making industry.

It is as if nobody remembers that the level of welfare in our today's world is based, to a very large extent, on the efficient exchange of goods and services across regions, borders and continents.

It is as if nobody remembers that the World is still far away from having reached a level of efficiency that merits the use of this expression.

There is really nothing I feel inspired to talk about, for now. I invite you to scroll back across the texts on this site written in the course of the past 6 years.

How has it been possible
to waste so much time and efforts?

Development and Cooperation

2011-05-28T10:00:00.002+02:00

Dear visitors:
In the Swiss paper Neue Zürcher Zeitung, issue May 26, I found a most remarkable piece of analysis, written by Philipp Aerni, WTI, which I would like to share with you (text only in German):

Bessere Spielregeln für die Entwicklungszusammenarbeit

In der Schweiz hat das Parlament der Erhöhung der offiziellen Entwicklungshilfe auf 0,5 Prozent des Bruttonationaleinkommens bis 2015 zugestimmt. Mehr finanzielle Mittel ändern aber nichts daran, dass falsche Spielregeln in der Entwicklungszusammenarbeit oft zu Fehlanreizen und Frustration führen.
Von Philipp Aerni

Die Entwicklungszusammenarbeit verfolgt zweifellos lobenswerte Ziele, und es ist unbestritten, dass die Schweiz gerade im Bereich der humanitären Hilfe viel Gutes tut. Doch wie steht es um die Wirksamkeit langfristiger Entwicklungszusammenarbeit, und wer profitiert davon? Darüber gehen die Meinungen weit auseinander, denn es geht nicht zuletzt um handfeste Interessen. Die Eigeninteressen der involvierten Akteure sind an sich nicht verwerflich, sofern das Hauptziel, nämlich «Hilfe zur Selbsthilfe», auch erreicht wird. Voraussetzung dafür wären jedoch Spielregeln mit geeigneten Anreizstrukturen. Diese sind leider in der Schweiz kaum gegeben, und es erstaunt daher nicht, dass die Entwicklungsvorstellungen unserer Hilfsorganisationen kaum den tatsächlichen Bedürfnissen in Entwicklungsländern entsprechen.

Asymmetrische Informationslage
Das Aufbegehren der Jugendlichen in Nordafrika ist symptomatisch für die Frustration bei alten Ideen und Regeln, welche die soziale und wirtschaftliche Erneuerung verhindern. Es ist daher auch an der Zeit, neue Formen der Entwicklungszusammenarbeit zu testen, die die Grundregeln der Institutionenökonomie respektieren und daher wirksamer und bedürfnisorientierter sind.
Ein Kernproblem der Institutionenökonomie ist das «Principal- Agent-Problem». Damit ist gemeint, dass die asymmetrische Information zwischen Auftraggeber (Principal) und Auftragnehmer (Agent) dazu führt, dass der Auftragnehmer einen Anreiz hat, seinen Informationsvorsprung zu seinen Gunsten auf Kosten des Auftraggebers zu nutzen.
In der Entwicklungszusammenarbeit existiert dieses Problem sowohl in der Schweiz als auch im betreffenden Entwicklungsland. In der Schweiz ist die Hilfsorganisation Auftragnehmer (Agent), während ihr Auftraggeber (Principal) der Spender (oder Steuerzahler) ist. Die Hilfsorganisation nutzt dabei ihren Informationsvorsprung, über den sie dank den Kenntnissen über die jeweiligen Projekte in den Entwicklungsländern verfügt, indem sie dem Spender nur diejenige Information unterbreitet, die jenen im Glauben bestärkt, dass echte Hilfe zur Selbsthilfe geleistet wurde. Dies erklärt, warum in den Broschüren für Spender keine gescheiterten Projekte existieren.
Das zweite Principal-Agent-Problem besteht im Entwicklungsland selbst zwischen der Hilfsorganisation (als Auftraggeber) und dem lokalen Partner (als Auftragnehmer), wobei der lokale Partner einen Vorsprung an Informationen über den tatsächlichen Stand der Dinge hat. Es liegt aber nicht in seinem Interesse, über die wahren Bedürfnisse vor Ort aufzuklären, wenn diese nicht im Einklang mit den Entwicklungsvorstellungen der Hilfsorganisation stehen. Die Hilfsorganisationen sehen ihre Aufgabe nämlich primär darin, traditionelle Gemeinschaften vor den Kräften des Marktes und modernen Technologien zu schützen, damit sie ihre Kultur weiterleben und souverän über ihre Ressourcen verfügen können. Die dadurch von aussen verursachte Stärkung der traditionellen Kräfte führt jedoch langfristig gerade nicht zu mehr Souveränität, sondern zu wachsender Frustration unter den Jugendlichen in der betreffenden Region.
Traditionen sind schützenswert, aber sie müssen aktiv gelebt und erneuert werden. Sonst werden sie gerade von Jungen als repressiv empfunden und führen zu verstärkter Abwanderung. Es ist daher nicht erstaunlich, dass der Aufstand in Tunesien mit der Selbstverbrennung des jungen Kleinunternehmers Mohammed Bouazizi begann, dem es jahrelang verunmöglicht wurde, eine selbständige Existenz aufzubauen. Weder die dortige Regierung noch unsere Hilfsorganisationen erachteten ihn als Teil ihrer Klientele.
Leider passen in die herkömmliche dualistische Denkweise von «profit versus people», welche wirtschaftliche gegen gesellschaftliche Interessen ausspielt, keine Unternehmer am Ort rein, die durch den Aufbau eines lukrativen Geschäfts zugleich auch einen wesentlichen Beitrag zur nachhaltigen Armutsbekämpfung leisten.

Finanzmittel anders einsetzen
Bessere Spielregeln in der Entwicklungszusammenarbeit würden erlauben, dass künftig unternehmerisch eingestellte Jugendliche wie Mohammed Bouazizi effektive Unterstützung von unseren Hilfsorganisationen erwarten könnten. Die staatliche Direktion für Entwicklung und Zusammenarbeit (Deza) hätte die Mittel und den Einfluss, um einen solchen Wandel herbeizuführen. Sie wird oft wegen der wenig transparenten Vergabe von Projekten an Hilfsorganisationen kritisiert. Sie könnte deshalb einen Teil ihrer Mittel als bedingte Transferzahlungen direkt an junge Leute vor Ort überweisen, sofern diese mit persönlicher Initiative in Erscheinung treten und bestimmte Auflagen erfüllen.
Die Auszahlung könnte sowohl in bar als auch in Form von Gutscheinen erfolgen. Mit den Gutscheinen könnten die Jungunternehmer dann Dienstleistungen und Kompetenzen von Hilfsorganisationen einkaufen. Diese würden wiederum ihre verdienten Gutscheine bei der Deza in Bargeld einlösen. Die Wirksamkeit dieser bedingten Transferzahlungen könnte an der Anzahl selbsttragender lokaler Projekte gemessen werden, die dadurch geschaffen werden. Die erfolgreichen Projektmanager vor Ort werden dabei mit denjenigen Hilfsorganisationen weiter zusammenarbeiten wollen, die ihnen auch tatsächlich das liefern, was sie benötigen. Dieser Ansatz würde das doppelte Principal- Agent-Problem weitgehend ausschalten und die Wirksamkeit der Entwicklungszusammenarbeit in vielen Bereichen verbessern.
Ein solcher Ansatz bedeutete echte Hilfe zur Selbsthilfe im Sinne der Spender und Steuerzahler. Mittellose Jugendliche hätten dadurch die Chance, eine eigene Existenz aufzubauen und Arbeitsplätze zu schaffen. Damit würde auch ihr Anreiz geringer, nach Europa auszuwandern.

Philipp Aerni (World Trade Institute, Universität Bern) ist Mitbegründer des African Technology Development Forum.

The Way Out of the Doha Deadlock

2011-04-30T10:33:00.002+02:00

Finally, agonizing Doha Round reached the point where we have been anticipating it to end up for the past 3 years. For once, DG Lamy's view, Trade Negotiations Committee of 29 April, sounds quite realistic. - here the link. and below some significant quotes from the text:

Mr Lamy ... said he will report back to the membership at the next meeting on 31 May ... Several speakers agreed with him that three options will not work: "business as usual" (continuing as before), "stopping and starting from scratch", which some speakers called "rebooting" — "since the issues blocking progress today will be the same ones on the agenda tomorrow," Mr Lamy said — and "'Drifting away' by wishing the issue would simply disappear."

The challenge is therefore to find a viable alternative to these three options, including the possibility of continuing to aim for all subjects to be agreed together or for some to be concluded faster than others, they said.

The issue at stake is indeed the viable alternative. Let us take a look from a wider angle, from the start of the Doha Round and what has been happening since then:

Doha round was launched in 2001 under promising title of Doha Development Agenda

In the years that followed, we have seen astonishing market bubbles and collapses, a quasi break down of the world financial system, the conversion of the USD from a global reference currency to hyper-inflated play money ... you name it.

More importantly, we have seen a boom in the emerging economies that nobody has anticipated or expected to happen at the end of the past century (1997 - 2000), the time when the agenda setting for the Doha Round took place. This coming out (DEVELOPMENT) of the emerging economies has happened in spite of the Doha Development Agenda failure.

During the same time, many of the non-emerging developing economies and of the least-developed ones appear to have completely lost their connection - they either keep themselves busy with civil unrest / war or have accepted to be supply the world with scarce raw materials. In the worst of the cases, they keep themselves busy with a combination of both - resources trafficking for the financing of civil wars -

WTO Members might be well advised to reflect on this certainly complex, but also fundamentally correct observation.

- Is the ambition DEVELOPMENT the right ambition for a trade round?

- Does not the expression development create expectations that cannot be kept by a trade round?

- How significant is the development contribution of fair and open trade?

(It certainly is significant, nobody defends any longer a view of free market access and the absence of any kind of barriers as being a synonym for development)

Re-balancing of the implicit expectations might be a good point
to start from in order "to seek a meaningful way out .. of the deadlock"

Is the Doha Round going anywhere?

2011-03-19T13:49:00.002+01:00

Progress in the talks now "basically depends on the arrangement that
can be reached between the big members" sighed one official ...

This is how ICTSD's Bridges Weekly in it's March 16 issue quotes an unnamed official from obviously a Member Country not belonging to the "Big Member" Group. Reflecting this apparently straight forward statement can offer deeper than expected insight to why things move in the wrong direction. Which countries are the BIG ones referred to here? Simple question with less simple an answer.

Are these US, China, India and Brazil - the above mentioned Bridges text refers to these 4 ...

Senior officials and ambassadors from the US, China, India and Brazil were meeting for bilateral discussions, delegates said, in a bid to explore possible concessions on agriculture, manufactured goods and services. ...

Where is the European Union?

Where is Japan?

Where are the the medium sized vibrant and sustainably successful economies - Australia, Switzerland, South Africa you name it ....

The Doha round has become too exclusive an event. Real consensus forming and decision making has been restricted to early to too few members. Maybe its is right there where the reasons for the standstill / backtrack since the 2005 Hong Kong Ministerial Meeting can be found.

The fact that nothing has been brought successfully to the Ministerial level for more than 5 years does indeed speak for itself.

So, it is a question of going back to the basic rules of broad based consensus building and getting away from an elitist dictate of the self-proclaimed BIG FEW.

Enjoy it.

Davos World Economic Forum instills fresh blood into Doha-Round

2011-02-01T20:14:00.002+01:00

At the margins of WEF, a select group of trade ministers met extra-officially and exchanged views with WTO DG Pascal Lamy. As often with extra-official meetings, this here was quite official and it achieved to produce a committment for a timetable geared to conclude the Doha-Round by the end of the current year. As often the case, I believe that the devil is to be found in the detail - here too, we do seem to have such a detail:

In respect of the trade offs needed for a deal between Emerging Economies (their challenge is the reduction of industrial protection) and the advanced economies like EU, US etc (their challenge is the reduction of agricultural protection) DG of WTO Pascal Lamy is quoted by media as follows:

... Ministers agree that trade negotiations need to be a balanced give and take - the USA do agree with that principle, too - Lamy is quoted saying ....

remains the question why the US participant in that extra-official meeting was not in condition to spell this out himself .

Merry Xmas & Happy New Year - Trade & Climate - where to go?

2010-12-25T16:54:00.005+01:00

At this time of Yule-tide I would like to thank all visitors for their interest and wish you a Merry Christmas and a Happy New Year.

When looking back on this past trade policy year, there is nothing much to add to my review posted on December 5.

Looking on from a wider angle, what however impressed me was the way how seemingly unnoticed the Cancun Climate Summit got past the bigger public and the extent to which trade / climate links were ignored. For an overview, click on this summary, provided by ICTSD. In this same context, I have received an interesting piece (Agri-Trade Forum, Volume 19 No 3, December 2010) discussing issues regarding the measurement of carbon footprint, published by the International Food & Agricultural Trade Policy Council (IPC). I would like to share the contents with you. By way - visiting the referred IPC Site makes an excellent holiday reading.

Here the carbon footprint text by IPC:

Zeroing in on an important trend in international food and agricultural trade, IPC convened jointly with the Agribusiness Council of FIESP, the Business Association of São Paulo, an international seminar on “carbon standards in agricultural production and trade,” on October 26. Distinguished speakers from around the world spoke of the increasing tendency to calculate the “carbon footprint” of food and agricultural products. "This is not just a passing fad," commented IPC member Roberto Rodrigues, Coordinator of the Getulio Vargas Foundation Agribusiness Center and President of the Superior Council of Agribusiness at FIESP, "and we must ensure that we are using the best science in these efforts."
The technical complexity of measuring carbon was best exemplified by the discussion held on biofuels and indirect land use change (ILUC), during which Marcos Jank, President of UNICA, the Brazilian Sugarcane Association, and IPC’s newest member, pointed to "alarming differences over calculations." EU and US speakers agreed that an international agreement on climate change is preferable, but that governments also needed to act by establishing sustainability criteria. European Commission representative Signe Ratso indicated that "transparency is very important as these efforts unfold." Scientists and economists are not only attempting to measure the relative carbon content of biofuels versus fossil fuels, but also undertaking sophisticated life cycle analyses on other food and agricultural products. These efforts are driven by companies, often working in concert with producers and civil society organizations. IPC member Jason Clay, Vice President of the World Wildlife Fund, explained that incorporating carbon in the value chain presents challenges, but also important opportunities to safeguard natural resources while contributing to greater efficiency and increased economic rewards for agricultural producers. Conference participants learned about a wide-ranging effort by the global dairy sector, to undertake a sector-wide analysis to determine the carbon footprint of dairy, and about Kenyan horticultural producers who have calculated life cycle analyses of their products in order to meet private carbon standards. Speakers emphasized that similar efforts are also being undertaken in order to calculate water embedded in agricultural products.
Given the technical complexities involved in life cycle analyses, conference participants agreed that an international standard to help guide such calculations would be very useful, but acknowledged that this was not likely to be achieved soon. IPC member Pedro de Camargo Neto, Former Secretary of Agricultural Production and Trade, cautioned that "as governments impose sustainability criteria, they must be mindful of their international trade obligations." Likewise, private sector and civil society efforts to establish carbon footprints must be undertaken responsibly: they should use the best scientific methods available, educate the consumer and help guide producers.

With my best wishes for the New Year

Doha Round: It's the Final Countdown (Lamy)!-is it?

2010-12-05T20:07:00.004+01:00

WTO Director General Pascal Lamy has announced, once again, a "final countdown" for distressed Doha Round talks - for a summary by ICTSD - click here - for the info piece by WTO - click here.
Well, nothing against yet another "final chance" announcement by WTO Director General - we have been seeing so many over the past years, that one more or one less indeed does not make much of a difference.

However, the facts are different: Global trade, while suffering from the economic crisis of 2008 and 2009, has proven to be be quite resistant. WTO Members have been respecting trade rules, defraying from using protectionist measures, to an extent which is surprising. The minor exceptions (mainly some globally irrelevant export restrictions) prove the trend.

The Uruguay Round trade rules have proven to be resistant and reliable. Doha Round has therefore vanished from the priority list. The challenge of this decade will be the stabilization of the financial system.

The call for the umpteenth final countdown is useless - worse, it denies the depth of the achievement of the Uruguay Round.

DG Lamy should not announce yet another final countdown - instead, he should proudly affirm:

WTO and its trade rules have successfully passed the "recessionist/protectionist test
Improving the quality of Uruguay Round Implementation remains the challenge ahead

So much for today.

Striking Observations

2010-10-31T19:49:00.004+01:00

Monetary policy has by now fully replaced trade and trade poicy from the global agenda - difficult to understand why so few care about and discuss the intimate interlink between these issues.

On a more practical note - a few days ago I really was proud to be Swiss - read on:

EU Proposal for the Reform of the CAP (common agricultural policy)
Officially still a confidential report, the concepts of a ag policy reform has become part of the public domain a few days ago - for details a) this link (ICTSD) and b) this link (capreform).
What is quite surprising (to say the least) for a humble Swiss citizen interested in agricultural trade policy is the apparent fact that the EU seems to have discovered the Swiss agricultural policy as the very role model for its future ag strategy - just compare the EU Proposal - dated October 2010 and Article 104 of the Swiss Constitution (as amended in the constitutional reform of 1999, at the end of the past century - here the link to the download of the Swiss Constitution as of April 1999.

EU - AG Strategy - October 2010

... Prepared by the Commission’s Directorate-General for Agriculture and Rural Development, the draft document recommends that a future Common Agricultural Policy (CAP) for Europe should focus on three objectives: viable food production, sustainable management of natural resources, and balanced territorial development. ...

Federal Constitution of Switzerland April 1999 - Agriculture:

Art. 104 Agriculture

¹ The Confederation shall ensure that agricultural sector, by means of a sustainable and market oriented production policy, makes an essential contribution towards:

a. the reliable provision of the population with foodstuffs;

b. the conservation of natural resources and the upkeep of the countryside;

c. decentralised population settlement of the country.

² In addition to the self-help measures that can reasonably be expected in the agriculture sector and if necessary in derogation from the principle of economic freedom, the Confederation shall support farms that cultivate the land.
.....

I do not think that there is much that needs be added - lest one point: EU / Brussels: Do not attempt to invent the wheel once again - it is there, just give credits.

TRADE POLICY - OWNERS AND DRIVERS

2010-10-03T11:52:00.005+02:00

Yesterday, I had the opportunity to participate in the celebrations of the 10th anniversary of the World Trade Institute (WTI) a highly reputed offspring of the University of Berne and which has made its distinct name with the MILE Program (Master in International Law and Economics). This is a unique Master Program for University graduates that focuses on international trade law and the economic mechanics and principles that influence trade policy making.

Among the events was a panel discussion with the title: "A Decade of MILE ... What is Next in Trade Related Education?"

The question that dominated the discussion was whether private sector / business implications/views/interests should get increased space on the teaching and work schedule of the MILE Program.
Academics and MILE graduates now working in international organizations were among the most prominent in the discussion.

Discussants appeared to question the need of increased private sector coverage. Implicitly, there seemed to prevail the view that trade policy and trade legislation is a matter of government.

Even though only as messages between words and lines, I perceived a most surprising lack of understanding for the significance of the interface Government - Private Sector - Civil Society among academia and the many international organization trained participants.

The facts:

Trade policy making and trade law (which fundamentally is the implementation of the trade policy) is indeed responsibility of government

Trade policy and subsequently trade law respond to the needs of civil society and business of the constituency in question.

Consequence:
Any teaching in trade [policy] related matters needs
to address the interface

Government - Business - Civil Society

How to wake up the Sleeping Beauty

2010-08-29T17:47:00.006+02:00

The Grimm Brothers recounted, many years ago, the Tale of the Sleeping Beauty - after a century of lying dormant she got her waking up kiss from her beloved prince.

WTO and the Doha Round in particular remind me very much of that very tale - they have fallen asleep (say vanished from public perception) quite some time ago - for evidence of this statement, just google the search words WTO or Doha Round, have a look at the list of search results and you will accept this statement ...

WTO, with this year's WTO PUBLIC FORUM, goes for another attempt waking up this sleeping beauty called Doha Round.

I am less than convinced that the sober title

"FORCES SHAPING WORLD TRADE"

and the proposed core themes

The WTO and the players that influence the multilateral trading system

The economic, political and technological factors shaping world trade and the role of the rules-based multilateral trading system in contributing to the global economic recovery
Coherence between the WTO and other areas of global governance
Looking to the future: What post-crisis agenda for the WTO in a shifting-power scenario?

are of a kind and type to bring forward the emontional, hot, contradicting, provocative, insulting and inspiring waking up kiss the Doha Round so desperately requires.

Remember the pacifist movement saying:

Imagine there is war and nobody goes there

The Doha Round is right there.

Why not a WTO PUBLIC FORUM entitled:

IMAGINE WTO AND NOBODY CARES

G8 and G20 have dropped Doha Round - it is time for PPM

2010-07-03T11:38:00.005+02:00

A week ago, G8 leaders met in Canada for their customary powwow on the whereabouts of the world. They went through the yearly ritual underlining their commitment to work towards the conclusion of the Doha Round - with a slight difference: Unlike before, they forgot - or conveniently omitted - to put a target date, such as "by the end of 2010" or "by the end of 3010". Click this link to Reuters in order to get an overview.

Back to back to the G8 met the G20 - the larger Club of significant established and emerging economies of our globe. Most significant, this larger Group endorsed G8's position on the Doha Round - what follows is an extract from the G20 Toronto Summit Declaration (June 26 - 27, 2010):

38. We therefore reiterate our support for bringing the WTO Doha Development Round to a
balanced and ambitious conclusion as soon as possible, consistent with its mandate and
based on the progress already made. We direct our representatives, using all negotiating
avenues, to pursue this objective, and to report on progress at our next meeting in Seoul,
where we will discuss the status of the negotiations and the way forward.

I always admire how nicely diplomats can word statements that in fact mean more something like: ... we don't care ... / ... this is of no significance, but we can't say it this way ...

On a more serious note, we do need to recognize that one fundamental error is being made consistently: Everybody reiterates that the Doha Round should be pursued ... consistent with its mandate and based on the progress already made ... I am convinced that:

1. The Doha Mandate no longer reflects the thrust of evolution of global trade

2. "The progress already made" has reached a dead end without exit except the way back.

In short:
It is now the moment to call that progress what it is - a failure
It is now the moment to declare the Doha mandate expired
It is now the moment to word a mandate that takes up the real challenges of the future

Such a mandate must, before all, forget all the haggling about tariffs, duties and subsidies but embrace a vision for global trade patterns that truly contribute to a sustainable global economic and political system - sustainable in the true and full sense:

Brundtland Commission of the United Nations on March 20, 1987: “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

A mandate focusing this vision will imperatively have to address the outdated position of WTO view on "like" products.

Products, be these steel, beef or energy, must no longer be considered like products purely based on their physical specifications (this is as it is today) - products need to be identifiable by specifications and by the social and environmental costs accrued along the respective production processes.

It is time to elevate the PPM issue (Production and Processing Methods) from key argument of WTO opponents to a center piece of a new mandate.

For a backgrounder on ppms - click here

Facts prove us to be right

2010-05-29T19:21:00.002+02:00

A fortnight ago, we concluded our post with the following conclusion:

With a difference as spectacular as the one we see (Role of Emerging Economies, financial crisis, de facto bankruptcies of European Economies .... you name it) a new launch - starting with the review of the very Mandate - sounds convincing - Who fears such a step?

Among the rationales / arguments, we brought forward the fact that, since the inception of the Doha Round, now close to ten years back, roles and specific weights in WTO of industrialized countries and emerging economies have been undergoing quite distinct an evolutionary pattern.

On and around the days of May 19 and 20, 19 significant WTO Members met under a series of plurilateral settings "in order to reach a common diagnose ... of the problem governments face in trying to conclude the Doha Round trade talks" (Quoted from ICTSD Bridges Weekly)

The above already referred ICTSD Bridges Weekly provides us with an excellent summary of these 19 Member strong talk - for your reading pleasure (and in order to prove my reasoning a fortnight ago) I would like to share with you some of the more noteworthy elements of the summary (all quoted)

... served to underline the gaps separating central players such as the US and large developing countries like Brazil, China, and India.

Many were "dumbfounded" by the depth of the differences, said one official who attended the "very educational" meeting. "There is a huge gulf separating the sides, and for the time being it is insurmountable," the source told Bridges. Countries were divided not just on the substance, but on how to approach the negotiation. "They cannot negotiate yet - they need to agree on how," ...

... US Ambassador Michael Punke said that the terms for cutting subsidies and tariffs outlined in draft texts dating back to 2008 would not be politically saleable in Washington ...

... Brazil, meanwhile, said that it was already at the outer limits of what it could agree to in terms of industrial market access. And India warned that if the package on the table unraveled, it would take another decade to conclude the round. Picking apart one aspect of the draft texts - industrial goods, say - would open up others, such as farm subsidies, India said, according to sources ...

For the full report check here

Not much to add, it seems.

Back to Square One - or even beyond!

2010-05-16T11:39:00.002+02:00

Trade policy interested folks will once again focus Geneva - India and the EU will host a gathering of some 19 Doha Round key players "... in order to attempt to revive the trade talks that have been moribund for two years ..." (quoted from Bridges Weekly) - the same Bridges Weekly delivers, under the title of "All Eyes on US Ahead of High-Level Doha Meeting", a detailed analysis of the situation and the stakes - Click it and read!

Cutting the exhaustive Bridges / ICTSD analysis short:
The positions look way further apart than at the outset of the Round back ... was it in 2001? - in other words: back to square one, if not way farther.

Of course, everybody that lives on the moribundly creeping Doha Round will reject such a conclusion. This is understandable - less understandable is however the systemic resistance of all players to go back to the Doha Mandate in order to check whether the root cause of the uselessly revolving merry-go-round talks is not right there.

Looking far-fetched at first sight, such an analysis starts to make true sense once we start comparing global economic, political and trade maps at the end of the second millenium A.C. with those then years into the third millenium.

With a difference as spectacular as the one we see (Role of Emerging Economies, financial crisis, de facto bankruptcies of European Economies .... you name it) a new launch - starting with the review of the very Mandate - sounds convincing - Who fears such a step?

NO NEWS ARE BAD NEWS

2010-03-07T12:12:00.019+01:00

Unlike parents who trust that no news from their adolescent children are usually good news - Doha Round is the place where no news usually spell bad news. Assuming this to be true then the trade talks are clearly worse off than ever since their launch back in 2001. Never since the start in Doha we seem to have seen such an extended no news / no developments period as we are crossing now. This is significant for two reasons:
First, media seem to have lost interest in the matter
Second, even those making a living from the Doha Round - Negotiators, consultants ... you name them ... have turned silent.

In the absence of further comment worthy matters related to trade, I would like to redirect the reader's attention to an interesting aspect of the financial crisis.

Entitled "The gods strike back" (link may require subscription), The Economist published in its February 11th edition a special report on the world's ability to manage financial risk. The role of modelling obviously was part of the discussion.
The Economist's print edition of March 6th gives us the pleasure of some most thoughtful comments from readers (see Letters) - I would like to share them with visitors:

SIR – As a card-carrying technocrat I take exception to your characterisation of the financial crisis as technological in nature (Special report on financial risk, February 13th). There was no “technological shift” or “new technology-driven order” in the mismanagement of risk you described, but there was an over-reliance on whizz-kid “quants” who didn’t know the difference between models and the real world. Mathematics and modelling are not the same as “technology”, even if the quants did use computers in their calculations. As for the folly of “trying ever harder to capture risk in mathematical formulae”, that is called “chasing zero” and is a serious mistake for any engineer to make.

Banks should hire more engineers who know that “all models are wrong, some are useful”, who are trained to include safety factors in their calculations for that very reason, and who know that just because you can calculate to the fifth decimal place doesn’t mean that the last digit means anything. And when employing scientists, hire those who will remind you that as much as economics would like to be a science, it has a way to go yet.

Richard Poeton
Bennington, Vermont

SIR – It is astonishing that you did not discuss the massive losses and risk-management failures that were caused by fraud and corruption, the Madoff saga being just one of many cases. Fraud was a material part of the mortgage collapse, a big factor in commercial property and loan losses and a component in investment banking and private-equity losses that did more damage than acknowledged.

Mathematical models cannot predict or uncover fraud as well as some may think. Overhauling capital requirements and eliminating Level-3 risk might in some way minimise systemic risk and damage, but it will not eliminate the ongoing material risk associated with the continuing fraud schemes that today’s risk managers, boards and banks do not seem to take all that seriously.

We need more independent people on risk committees who recognise fraud. No risk manager can be really useful without being able to analyse whether the multiple sales and lending activities of his institution will fall victim to those who understand how best to steal.

Jeff Klink
President and chief executive Klink & Co., Inc
New York

* SIR – I take issue with your claim that the failures of complex models “point to greater use of judgment and less reliance on numbers in future”. Instead, both should be replaced with respect for uncertainty. I am an engineer and in my field we have a saying about models: “garbage in, garbage out”, or when your inputs or assumptions don’t match the expectations of the model, then the output of the model will be a waste.

If a model overestimates the lift around an aircraft’s wing, then the actual plane might not get off the ground. This gives rise to a culture that understands that paper and computers can only go so far to predict reality, and that uncertainty abounds until a track record is established. Perhaps, if a financial institution sacrificed gains in the bubble by replacing reliance on judgment and numbers with more accommodation of uncertainty, then it would have come out of the crisis leaps and bounds ahead of the competition.

Steve Bryant
Houston

* SIR – Far from reducing the prop-trading activities of investment banks, the best way to manage risk and deal with compensation issues is to make it intrinsic to every bank’s business. Traders and bankers would consider their risk-taking more carefully if a reasonable proportion of their previous year’s bonus, say 50%, were used to mirror the following year’s activity.

For example, if a trader takes 10% of his book for a ten-year swap, then 5% of his previous year’s bonus is used for the same position. Likewise a banker arranging a structured finance has a proportion of his bonus in the junior debt arising from that transaction.

Oliver Blaydon
Head of risk
eg. 1
London

* SIR – You depicted the reckless disconnect between the default rates predicted by the ratings agencies and the actual default rates. Ratings firms assert that they are not liable for losses suffered by those relying on their credit reports as those reports are protected as free speech.

But Oliver Wendell Holmes long ago reasoned that free speech does not protect a person who falsely shouts “Fire!” in a theatre. The logical equivalent of his reasoning also is true: free speech cannot be used to protect one who falsely shouts that “All is well”, when in fact a financial fire is raging all around.

Jeff Meller Cambridge, Massachusetts

What Hinduism, Buddhism and the Doha Round have in common

2010-02-20T16:02:00.003+01:00

Asian religions believe in the power of words MANTRAS - typically repeated stoically during long periods - as means to create transformation.

As a matter of fact, interested parties led by DG General Lamy have been repeating - mantra-like:
- that "progress is at hands", that "nobody throws the towel", that "substantial negotiations are ahead", that "agreement on technical issues is promising" .... you name it.

What we have been seeing since maybe the Hong Kong Ministerial (this was in 2005 - freshen up your memory!!!) is a slowly revolving merry-go-round with mantra spelling trade and government officials sitting on the artfully crafted horses.

Let us see whether the upcoming (Feb 22) Report by the Chairman of the Trade Negotiations Committee to the WTO General Council will prove us wrong - here the proposed agenda:

GENERAL COUNCIL: MEETING OF 22-23 FEBRUARY 2010

I. Report by the Chairman of the Trade Negotiations Committee

II. Work Programme on Small Economies — Report by the Chairman of the Dedicated Session of the Committee on Trade and Development

III. The financial and economic crisis and the role of the WTO — Communication from Argentina, Ecuador and India (WT/GC/W/617 and ADD.1)

IV. Accession of developing countries — Communication from Gabon on behalf of the informal group of developing countries (WT/GC/126)

V. Information on EU schedule CXL — Statement by the European Union

VI. Appointment of Officers to WTO Bodies

VII. Election of Chairperson

Other business back to top

New Doha impetus from WEF / Davos

2010-01-31T19:33:00.004+01:00

Already a matter of routine, a interested group of trade ministers met at the sidelines of WEF in Davos in order to discuss state of play and next steps for troubled DOHA Round. Even for the trade ministers, optimists by proefession, the result is meager, as reported by Reuters:

DAVOS, Switzerland (Reuters) - Trade ministers expressed gloom on Saturday about the prospects of concluding stalled global trade liberalization talks this year, with many blaming the United States for foot-dragging.
Davos: China | Davos

Ministers from about 20 major economies held informal talks on the sidelines of the annual World Economic Forum meeting in the Swiss ski resort of Davos, but Egypt's trade minister said they made little progress.

"I don't think very much came out of this meeting unfortunately," Rachid Mohamed Rachid said.

"If we don't have the participation at ministerial or even ambassador level from the United States, of course it doesn't give us a positive signal," he said.

Symbolizing the Obama administration's reluctance to commit to an endgame in the long-running negotiations, the world's biggest economy sent only a deputy ambassador who was not authorized to speak.

"We had other representatives who could not take the floor because they were not ministers," Swiss President Doris Leuthard, who chaired the meeting, told a news conference. "Those who are not present don't have the floor."

Leaders of the G20 grouping of major economies, including U.S. President Barack Obama, agreed in Pittsburgh last September on the goal of wrapping up the Doha round of World Trade Organization negotiations in 2010.

Rachid said there was very little prospect of meeting that goal, adding: "We are not optimistic, we are very concerned."

Many participants say domestic politics and the impact of the financial crisis and high unemployment in the United States and Europe have made chances of an early trade deal more remote.

David Shark, deputy U.S. envoy to the WTO, declined comment on the complaints at the level of U.S. representation but said: "It was interesting as always. It was just a conversation."

"FRANK EXCHANGE"

The long-running 153-nation talks collapsed in 2008 over a dispute between the United States, India and China on protection for farmers in developing countries. Other unresolved issues include cotton subsidies, trade in services and in environmental goods and services.

Brazilian Trade Minister Celso Amorim suggested that G20 leaders should get involved, as at last month's Copenhagen U.N. climate talks, to make key trade-offs needed to clinch a deal.

But WTO Director-General Pascal Lamy told reporters any such top-level engagement would require lengthy preparation to boil down the complex issues to simple, manageable choices.

Leuthard said ministers agreed the strength of the WTO system had safeguarded free trade during the recession, but the longer the world went without a new pact, the bigger the risk of a retreat into protectionism.

India's Trade Minister Anand Sharma agreed there was an urgent need for trade negotiators to learn lessons from the global financial crisis.

"It was a rules-based system that has prevented the world trade from collapsing during the economic crisis and the global economy stands to gain much," Sharma said.

The Obama administration has said big emerging economies such as China, India and Brazil must open their markets more to make a global trade deal worthwhile for U.S. business.

Australian Trade Minister Simon Crean saw hope in the fact that Obama's State of the Union address on Wednesday had underscored the link between free trade and job creation.

"Look at President Obama's speech where he talks about the objective of doubling exports. That can't be done unless trade is liberalized," he said.

Senior officials are due to conduct a stocktaking exercise in late March to see if an outline WTO deal is possible this year, and participants said no one would want to put negotiating cards on the table at this stage.

(Additional reporting by Ben Hirschler, writing by Paul Taylor and Dominic Evans, editing by Hans Peters)

The Reuters Report speaks for itself and there is little to add. There is however on piece of additional info that makes interesting reading. Frau Leuthard, Swiss trade minister and host of the referred meeting was slightly more outspoken to Swiss media - we quote from the HandelszeitungOnline:

WTO-Minister wollen Freihandelsrunde wieder in Fahrt bringen

Die festgefahrene Liberalisierung des Welthandels soll wieder in Bewegung kommen: Unter der Führung von Bundespräsidentin Doris Leuthard plädierte eine informelle Ministerrunde in Davos für einen Versuch, der stillstehenden Doha-Runde wieder Leben einzuhauchen.

Es sei beschlossen worden, dass die Chefunterhändler bei der Welthandelsorganisation (WTO) im Februar und März eine Liste von Schlüsselthemen erstellen sollten, die noch konkretisiert werden müssten, kündigte Leuthard vor den Medien am Rande des Weltwirtschaftsforums (WEF) an.

Dabei gehe es um technische Bereiche wie etwa Verhandlungen im Industriesektor, Abbau der Zölle für bestimmte Sektoren, Antidumping-Massnahmen oder Massnahmen gegen Überfischung, sagte die Schweizer WTO-Chefunterhändlerin Marie-Gabrielle Ineichen-Fleisch auf Anfrage der Nachrichtenagentur SDA. Erst dann könne eine nächste Ministerrunde mit neuen oder revidierten Papieren vorbereitet werden.
"Am Schluss geht es natürlich um den politischen Willen", sagte Leuthard nach dem Treffen von 17 Ministern und WTO-Generaldirektor Pascal Lamy. Hier stünden einige Staaten immer noch abseits. Ohne gemeinsamen politischen Willen werde diese Runde nicht vorwärtskommen.
Über einen Abschluss der sich bereits acht Jahre hinziehenden Doha-Runde noch heuer zeigte sich die Bundespräsidentin skeptisch: Zwar sei die technische Seite unproblematisch. "Da ist das Jahr 2010 immer noch im Bereich des Möglichen. Aber auf der politischen Seite wird sich das Ganze nicht realisieren lassen, wenn gewisse Staaten keine Verpflichtungserklärungen abgeben."
"Wir brauchen die USA. Das macht uns allen Sorgen, dass auch hier US-Präsident Barack Obama sehr zurückhaltend ist und seine Prioritäten anderweitig setzt", sagte Leuthard weiter.

The text is unfortunately in German - two points are interesting:
one: the ground note is substantially more optimistic

second: Frau Leuthard, going more into details than the Reuters report, enumerates the areas where
....trade negotiators at WTO will establish, in the course of February and March, a list of key issues that still need concrete work .... we refer thereby to issues such as technical matters in the industrial sector, anti-dumping or measures against over-fishing ...
certainly more than interesting the areas that are being skipped and that therefore do not appear to be in need of concrete work (whatever that means)

HJN

EU Commission 2009 - 2014 designate - interesting!

2010-01-24T17:26:00.002+01:00

The new Barroso Commission designate for the period 2009 to 2014 is out - and it is indeed interesting to have a look at the list (click here) - check out in particular their CVs and their national origin.

Interesting in our context here the nomination to the succession of Frau Fischer Boel , the agricultural commissioner - the Romanian Dacian Ciolos - check out his CV - CVciolos_en.pdf - and a summary of a hearing in the European Parliament - both make interest reading and are most self-explantory.

Preference Erosion - a key obstacle to DDA conclusion being removed?

2010-01-17T16:44:00.002+01:00

Trade negotiators appear to have returned rather quietly from their X-Mas leaves - nothing much has been catching public visibility so far. However, the news on a common proposal by ACP, Latam and the EU in respect of how to deal with the issue preference erosion, seem to me much more significant than the little of news coverage this proposal has so far received beyond the really specialized media channels.

For a full report and backgrounder on preference erosion
you best go to Bridges weekly - click this link.

In fact, a common proposal from those with directly opposite interests in the matter is more than remarkable - this is not a small step but a huge jump towards a DDA conclusion.

Antibiotics in animal farming - an issue with relevance for global trade

2010-01-02T19:52:00.010+01:00

The wide spread use of antibiotics in animal farming has been causing concerns for quite some years, now.
The absence of globally binding rules governing the use of antibiotics as feed additives and clear disciplines for the veterinary application of the same - say SPS and TBT related issues in WTO speak - are rightfully on track to turn trade barriers much more important than tariffs. In this respect, I found a most interesting backgrounder drawn up by Keith Good on his Farm Policy site. For easy reference, here his text:

Quote

Associated Press writers Margie Mason and Martha Mendoza reported yesterday that, “[M]ore and more Americans — many of them living far from barns and pastures — are at risk from the widespread practice of feeding livestock antibiotics. These animals grow faster, but they can also develop drug-resistant infections that are passed on to people. The issue is now gaining attention because of interest from a new White House administration and a flurry of new research tying antibiotic use in animals to drug resistance in people.

“Researchers say the overuse of antibiotics in humans and animals has led to a plague of drug-resistant infections that killed more than 65,000 people in the U.S. last year — more than prostate and breast cancer combined. And in a nation that used about 35 million pounds of antibiotics last year, 70 percent of the drugs — 28 million pounds — went to pigs, chickens and cows. Worldwide, it’s 50 percent.”

The AP article stated that, “The rise in the use of antibiotics is part of a growing problem of soaring drug resistance worldwide, The Associated Press found in a six-month look at the issue. As a result, killer diseases like malaria, tuberculosis and staph are resurging in new and more deadly forms.

“In response, the pressure against the use of antibiotics in agriculture is rising. The World Health Organization concluded this year that surging antibiotic resistance is one of the leading threats to human health, and the White House last month said the problem is ‘urgent.’”

Yesterday’s article noted that, “More than 20 percent of all human cases of a deadly drug-resistant staph infection in the Netherlands could be traced to an animal strain, according to a study published online in a CDC journal. Federal food safety studies routinely find drug resistant bacteria in beef, chicken and pork sold in supermarkets, and 20 percent of people who get salmonella have a drug resistant strain, according to the CDC.

“Here’s how it happens: In the early ’90s, farmers in several countries, including the U.S., started feeding animals fluoroquinolones, a family of antibiotics that includes drugs such as ciprofloxacin. In the following years, the once powerful antibiotic Cipro stopped working 80 percent of the time on some of the deadliest human infections it used to wipe out. Twelve years later, the New England Journal of Medicine published a study linking people infected with a Cipro-resistant bacteria to pork they had eaten.”

The AP writers pointed out that, “Antibiotics are a crucial part of [farmer and veterinarian Craig Rowles'] business, speeding growth and warding off disease.

“‘Now the public doesn’t see that,’ he said. ‘They’re only concerned about resistance, and they don’t care about economics because, ‘As long as I can buy a pork chop for a buck 69 a pound, I really don’t care.’ But we live in a world where you have to consider economics in the decision-making process of what we do.’

“Rowles gives his pigs virginiamycin, which has been used in livestock for decades and is not absorbed by the gut. He withdraws the drug three weeks before his hogs are sent for slaughter. He also monitors his herd for signs of drug resistance to ensure they are getting the most effective doses.

“‘The one thing that the American public wants to know is: Is the product that I’m getting, is it safe to eat?’ said Rowles, whose home freezer is full of his pork. ‘I’m telling you that the product that we produce today is the safest, most wholesome product that you could possibly get.’”

With respect to policy related issues, the AP article indicated that, “Some U.S. lawmakers are fighting for a new law that would ban farmers like Rowles from feeding antibiotics to their animals unless they are sick.

“‘If you mixed an antibiotic in your child’s cereal, people would think you’re crazy,’ said Rep. Louise M. Slaughter, D-N.Y. [FarmPolicy.com Note: See related news items on this issue from Congresswoman Slaughter here (July 2009), here (September 2009), here (October 2009), and here (October 2009). A related release from the House Rules Committee, which is chaired by Rep. Slaughter, is available here (July 2009)].

“Renewed pressure is on from Capitol Hill from Slaughter’s bill and new rules discussed in regulatory agencies. There is also pressure from trade issues: The European Union and other developed countries have adopted strong limits against antibiotics. Russia recently banned pork imports from two U.S. plants after detecting levels of tetracycline that the USDA said met American standards.”

On the other hand, the article stated that, “Opponents, many from farm states, say Slaughter’s law is misguided.

“‘Chaos will ensue,’ said Kansas Republican Congressman Jerry Moran. ‘The cultivation of crops and the production of food animals is an immensely complex endeavor involving a vast range of processes. We raise a multitude of crops and livestock in numerous regions, using various production methods. Imagine if the government is allowed to dictate how all of that is done.’

“He’s backed by an array of powerful interests, including the American Farm Bureau, the National Pork Producers Council, Eli Lilly & Co., Bayer AG, Pfizer Inc., Schering-Plough Corp., Dow AgroSciences and Monsanto Company, who have repeatedly defeated similar legislation.”

With respect to legislative and administrative history on this issue, the AP article explained that, “The FDA says without new laws its options are limited. The agency approved antibiotic use in animals in 1951, before concerns about drug resistance were recognized. The only way to withdraw that approval is through a drug-by-drug process that can take years of study, review and comment.

“In 1977 the agency proposed a ban on penicillin and tetracycline in animal feed, but it was defeated after criticism from interest groups.

“There has been one ban: In 2000, for the first time, the FDA ordered the poultry medication Baytril off the market. Five years later, after a series of failed appeals, poultry farmers stopped using the drug.

“In 2008 the FDA issued its second limit on an antibiotic used in cows, pigs and chickens, citing ‘the importance of cephalosporin drugs for treating disease in humans.’ But the Bush Administration — in an FDA note in the federal register — reversed that decision five days before it was going to take effect after receiving several hundred letters from drug companies and farm animal trade groups.”

Unquote

Your contribution:
Make sure and inquire with your supplier, whenever you purchase animal products - i.e. beef, pork, poultry, aquaculture fish and seafood, eggs, dairy products - that those were produced without antibiotic feed additives and that relevant and trust worthy certification is at hand.

You may also request your government / authorities to expedite legislation banning the use of antibiotic feed additives in your country and in the products to be imported into your country.

No Xmas bang from the Doha Round - but my best wishes for a Merry Christmas and a Happy New Year

2009-12-13T12:46:00.002+01:00

Dear Visitors

Some may have hoped that the Conference of the Trade Ministers in Geneva might open the door for a "Doha-break-through-bang". It is now clear that this will not be the case.

As a matter of fact: negotiators have returned swiftly to day to day business and they concentrate on praising themselves for the good jobs done; trade ministers have returned home affirming - once again - that the Doha Round will be brought to a conclusion in 2010.

In short, accepting that 2009 has passed away, what remains to be done is the contribution towards a good starting mood in 2010.

With this, we have time to exchange our best wishes for a

Merry Christmas &
Happy and Joyful Next Year

hjn

Acrobatics on the Trade Negotiation Floor - Geneva Ministerial

2009-12-06T12:16:00.003+01:00

The NZZ newspaper has presented in its Saturday December 5 edition a most inspiring summary of the state of play of the Doha Round (unfortunately in German only)

upload the pdf here: 091205NZZ.pdf

The text gives a nice view of the boldness of the WTO as an organization and the difficult relationship among established (such as USA, EC) and potential future (Brazil, India, China) global leaders - tensions cropping up on platforms such as the G-6 (Australia, Brazil, the EU, India, Japan and the US).

Further, the text comments the difficult art of allocation of benefits and losses generated by progressive trade liberalization (i.e. displacement of trade flows).

Last but not least, the text shows us that the Geneva Meeting - perhaps because the Doha Negotiation was not part of the formal agenda - has added fuel to the fading Doha fire.

Setting the stages for the Ministerial - officially and extraofficially!

2009-11-29T12:22:00.004+01:00

Past week, we made an effort provide some real food for thought to the upcoming trade ministers meeting. Within that text, we did make a hint to P. Lamy's report to the General Council - "trying obviously to set the informal agenda" - this latter report (to the General Council) is a public WTO document, so it was worded quite carefully and balanced, while still trying to set the extra-official trade negotiation agenda in the otherwise "housekeeping" centered Conference.

In the meantime, P. Lamy, this time in his function of chair of the TNC (Trade Negotiations Committee), assembled the heads of delegation. I understand this to have happened on November 27, going with them through the state of play of the negotiations.

While the text of the report to the General Council is a publicly available document, this is not the case for the TNC 'Speaking Notes' of Mr. Lamy.

Probably, these latter 'Speaking Notes' would provide a better picture of what the real situation is.

I would not be surprised to hear, judging from what has been moving over the past months, that:

agricultural negotiations continue to dodge forward, slowly but steadily, making headway in all these technically difficult but necessary details;

in non-agricultural market acess (NAMA), virtually no progress has been made.

Most likely, I guess, this lack of progress would have to be credited to preference erosion - for a backgrounder, feel free to upload the enclosed WTO Working Paper

ersd200505_e.doc

(click the link)

There certainly is a very broad consensus that agricultural subsidies need be reduced further (not least due to the recession-suffering, cash-strapped public coffres). In contrast, reduction of agricultural tariffs is only of second importance - agricultural trade is no longer so much influenced ty tariffs than it is by domestic subsidies - check out the WTO cotton case if you dubt.

So, while unpopular domestic subsidies are the centerpiece in agriculture, NAMA really deals with tariffs, primarily - indeed, reaching a consensus where some need to give up 'trade goodies' called preferences so that the whole market place gets really even is a huge challenge. A challenge fare beyond the even most ambitious agricultural endeavor.

Food for Thought - Right in Time for the upcoming meeting of Trade Ministers

2009-11-22T12:09:00.002+01:00

Trade Ministers will meet Nov 30 to Dec 2 in Geneva, trying to keep up the once established bi-annual conference schedule. It was only possible to convene this conference by formally excluding Doha-Round issues from the agenda - what did not prevent P. Lamy to address the General Council, in the wake of the Min-Conference, primarily with a stock-taking of the Doha-Round - trying obviously to set the informal / extra-official agenda of the Meeting - click the link for his report to the General Council.

The real contribution to what might be a decent "house-keeping" agenda comes however from a little known Canadian Trade and Development Think Tank

- iisd / International Institute for Sustainable Development -

Right in time for the ministerial conference, the institute has published a most interesting piece of work:

A Sustainable Development Roadmap for the WTO, by Aaron Cosbey

click the link in order to get an upload of the full document

For those in a hurry, read thru the potential elements of the roadmap, as identified in the document - Ministers in Geneva (and Mr. Lamy) could snatch significant inspiration - good luck to them - here now the elements of the roadmap lined out:

quote (pages 45 & 46)

...
The paper then attempts to lay out a roadmap for the WTO, on the
premise that the organization takes seriously its explicit objectives,
including the need to contribute to sustainable development. Only a
dedicated and inclusive process could elaborate such a roadmap with
any legitimacy, but a number of areas of promise are explored here as
potential elements of a final roadmap. They include:

• Assessment: The WTO should create a regime that will assess how
well it is doing in achieving its objectives in the area of sustainable
development. The regime should perform two basic functions: the
“paragraph 51” function of monitoring and commenting on ongoing
negotiations, and a broader regular assessment against a
roadmap of elements such as the one elaborated above. Ideally
both functions would be performed by third parties, that is by a
credible, legitimate group with broad expertise on the matters of
economy, environment and development and their relationship to
trade law.

• Environment: The WTO should take the lead in liberalizing trade
in environmental goods and services, on reducing or eliminating
perverse subsidies (such as fisheries and fossil fuel subsidies), and
on any needed amendments to the TRIPS Agreement to make it
compatible with obligations under the CBD. It should also grant
observership to MEAs in WTO Committees. The WTO should
attempt, in an exercise that included inter alia environment
Ministry officials, to negotiate agreed understandings or guidance
on what WTO law says on the subject of PPM-based discrimination,
and on the precautionary principle. It should ensure that others
act to address at least two other items on the trade-environment
agenda, but not take a lead role: the cluster of issues that includes
market access, standards and labelling; and assessing the broad
impacts of trade on the environment.

• Development: The WTO should be actively leading in the areas of
trade-related technical assistance, capacity building and trade facilitation.
It should be spearheading a collaboration that has others
going further than this, to efforts designed to build up trade-related
infrastructure, to build productive capacity and to strengthen the
domestic institutions that are key to a healthy investment climate
(bureaucracy, judiciary, regulatory bodies, etc.) The WTO should
explore developing a system of indicators that would link successful
aid for trade to related trade law commitments.

• Negotiation: The WTO should create an independent advisory
body staffed by technocrats, modelled along the lines of the IPCC.
The body (referred to hypothetically in the text as the IPTSD)
would be charged by the Members with delivering advice on a
range of empirical questions of relevance for the achievement of
sustainable development through trade law and policy. Such a body
would improve the quality of the negotiations, which urgently
need to find some reliable manner to link to the Organization’s
objectives, rather than merely to mercantilist national priorities.

• Multilateral governance: The WTO should convene research at a
level adequate to inform the Members—particularly the least
developed among them—whether the rush to regionalism harms
their prospects for sustainable development. This is not a methodologically
simple question, and much research has already been
carried out. But a dedicated effort to advance understanding on
this question would nonetheless be welcome.

• Accession: The WTO should create a new agreement on accession
that lays out objective criteria for deciding what obligations any
given acceding Member should undertake. The agreement should
contain an approval process that eliminates the need for bilateral
negotiations with all interested parties.

• Dispute settlement: The WTO should explore the possibility of
monetary payment as penalty for non-compliance with DSM rulings,
this being an imperfect but superior solution for the problems
that smaller economies encounter with the existing system. The
WTO should make all submissions public documents, and should
open up all dispute settlement proceedings to the public.
...

unquote

FAO World Summit on Food Security - Part of the Problem or Part of a Solution?

2009-11-15T11:30:00.002+01:00

Tomorrow the FAO organized World Summit on Food Security will open its doors. Launched with lot of publicity - such as highly media-covered 24 hour hunger strike by FAO secretary general Diouf - the event still risks to turn another obstacle on the bumpy road towards Global Food Security. Two comments in this respect:

A 24 hour hunger strike by FAO Secretary General for PR purposes is ridiculous and is not being understood as a serious message. In fact, not eating during 24 hours is probably quite a healthy measure for Mr. Diouf, very far away from any link to starvation.

A World Summit is expected to bring together the heads of state and to reach commitments from among the top of the diplomatic hierarchy. It is being commented that heads of state presence will be restricted to gentlemen with glittering names such as Mugabe, Ghadhafi or Chavez. Should this prove correct - please check it out during these coming days - then indeed to organization tasked to fight hunger in the world has a major problem. FAO would be well advised to look deep inside in order to find out why such an event appears to attract the bad species and what would need be done to change that. Worst case scenario will be a summit with a majority of lower ranking diplomats condemned to silence and the three referred gentlemen taking again advantage of a vacant stage to spit out their well known messages. We should not forget: Mr. Mugabe has a unrivaled track record for starving his own people - Mr. Chavez track record is best described as the top scorer when it comes to wasting petroleum dollars for anything except the development of the country entrusted to him - for Mr. Ghadhafi, we leave it there ... Mr. Berlusconi, prime minister of hosting Italy, is expected to give the opening address - it will be in his hands to set the stage so that the above scenario will not occur. Alas this would mean to expect a lot from media tycoon and Ghadhafi-buddy Silvio B.

US Government nominates Chief Agriculture Trade Negotiator to WTO

2009-11-07T23:29:00.002+01:00

Better late than never: the US administration has finally identified a candidate for the position of chief ag negotiator to WTO - for details click here to get to the Reuters news item. Mr Siddiqui's track record is quite promising and raises expectations. Let us hope that the mustering process by Senate and Reps goes thru smoothly.

More important than the name as such is however the fact that the Obama administration has finally got its act together to staff its WTO team - conditions that substance will return to the negotiating floor may improve for early 2010.

Seventh WTO Ministerial Conference

2009-11-01T17:35:00.007+01:00

Exactly two fortnights from now, Geneva will host the Seventh WTO Ministerial Conference.

Earlier this year, the global economic situation had been perceived as so bad that it had been a must for WTO's General Council to focus this upcoming MIN-CONF on the economic situation - WTO Document WT/L/760:

quote

SEVENTH SESSION OF THE MINISTERIAL CONFERENCE

Decision of 26 May 2009

1. Taking account of the obligations set out in Article IV, paragraph 1, of the WTO Agreement, the General Council decides that the Seventh Session of the Ministerial Conference shall be held in Geneva, Switzerland from 30 November to 2 December 2009.

2. The general theme for discussion at the Seventh Session shall be "The WTO, the Multilateral Trading System and the Current Global Economic Environment".

3. The Chairman of the General Council is requested to undertake all necessary action to prepare the Seventh Session in consultation with Members and in co-operation with the Director-General and the Swiss authorities.

unquote

Lucky enough for everybody, the global economic crisis has furnished a politically convenient rationale to skip sickly floating Doha-Round from the agenda of the Ministerial Conference - this may be politically wise - however it will not contribute much towards the goal of wrapping up a Doha Deal some time in 2010.

It will not contribute either to lower the level of frustration of delegates - frustration caused by the gap between political lip-service and self-centered and protectionist negotiation mandates - see ICTSD:

Lamy Calls for Text-Based Talks, Delegates Express Frustration

Delegates need to move to text-based negotiations if they want to spur progress toward a global trade deal, WTO Director-General Pascal Lamy stressed to a meeting of WTO officials on Friday. The mood among delegates was grim, with many complaining of back-sliding and a lack of transparency in the negotiating process, but Lamy remained optimistic. ....

Food Security - again!

2009-10-25T19:56:00.003+01:00

A week ago, we discussed issues related to food security, concluding with the question:

Why is it so hard to accept that food should be produced, to the extent possible, in the region where it is needed?

Seldom I have felt, in the recent past, so affirmed in my views as right now. Read this, coming straight from inside the US Agricultural Policy Brain Tank (for the quote, my thanks to Keith Good, www.farmpolicy.com :

On Friday, Secretary of State Hillary Rodham Clinton and Secretary of Agriculture Tom Vilsack held a conference call to discuss food security issues.

Reuters writer Roberta Rampton reported on Friday that, "The Obama administration wants more flexibility in how it allocates food aid dollars to complement its new strategy to help small farmers in poor countries boost their food production, Agriculture Secretary Tom Vilsack said on Friday.

"Vilsack and Secretary of State Hillary Clinton, who is leading the administration's three-year, $3.5 billion global food security initiative, did not rule out using U.S.-grown food aid as a tool for development projects.

"But they told reporters food aid funding should also be used to buy crops in or near poor countries as a way to benefit local farmers while supporting U.S.-led development projects."

The article added that, "The United States will no longer rely on food aid as its primary tool to help reduce world hunger, Vilsack said, but will continue to use it where needed.

"The focus of its initiative will be on helping small-holder farmers get access to seed, fertilizer, irrigation and markets so that they can feed themselves and earn a living.

'"We’ve got to make farmers around the world more productive,"Vilsack said.'

Bloomberg writer Alan Bjerga reported on Friday that, "Biotechnology will play a 'critical role' in combating hunger, which has become a global security threat with more than 60 food riots worldwide since 2007, U.S. Secretary of State Hillary Clinton said.

"Improved technology will be one of the main tools the U.S. will use to help countries produce more food, Clinton said today in a teleconference with Agriculture Secretary Tom Vilsack, in observance of World Food Day.

"Hunger is becoming a larger economic, environmental and security threat, Clinton said. The number of hungry people worldwide reached 1.02 billion for the first time this year, the UN said earlier this week. The U.S. will be 'investing in all of the tools that are needed to leverage the skills and perseverance of farmers,' Clinton said."

Nothing much to add to this truly bold (and overdue) policy change of the US administration - chapeau.

On a different stage, this policy move underlines the - often disputed - reality that indeed the global food market (whatever that exactly is) is more different from other markets that some would like to make believe.

So much for today - hjn

Global Food Security - is this a real issue?

2009-10-17T18:49:00.000+02:00

Past Friday, I had the opportunity to assist a panel discussion at ETHZ's Department of Agriculturual and Food Sciences (D-AGRL). For details on the panel meeting - click here. (Sorry, no English version). The panel meeting was successful and succeded in bringing together a crowd that spilt over into a second auditorium with video display.

Indeed, the crowd had not come to hear news about food security, but to get an occasion for networking and small talk - as usual drinks and finger food are most important for the perveived success of such an event.
QAuite big was the disappointment among attendees - not because that nothing new in respect of food security was brought up - but because more time than planned was wasted with the panel discussion and less therefore remained for the drinking and networking part.

For myself, I could not avoid a sentiment of despair: I had been convinced that the world had now accepted that food security is, principally, a question of
a) poverty
b) good production practice / say know how / say education / say technology

but no: in spite of all facts, there are people that still believe that food security is a matter of production quantity - irrespective of type and kind and of the location of production.

By coincidence, the Farm Policy Newsletter by Keith Good addresses the same issue in its Friday issue - it is well worth reading:

Food Security

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Stepping into the debate over how wealthy countries should support agricultural development in places such as Africa, billionaire and philanthropist Bill Gates cautioned aid leaders not to let battles over biotechnology versus sustainability create an ‘ideological wedge’ that hinders the need to solve world hunger.

“Gates, the chairman of Microsoft Corp., in his first major address on agricultural development, spoke to a standing-room-only audience at the World Food Prize symposium on Thursday [transcript, video replay]. Given Gates’ status in helping reduce global hunger, his speech at the World Food Prize further elevated the symposium’s profile.”

Mr. Clayton added that, “With renewed recent emphasis on the world stage to reduce global hunger, Gates’ speech also represents his foundation elevating its focus from aiding specific projects to weighing in on political issues and challenges. ‘Now is the time,’ Gates said. ‘The food crisis has forced hunger on the world’s agenda. From NGOs (non-governmental organizations) to the G8 to African heads of state, there is a rush of new commitment.’

“But there is a problem, Gates said. Helping to end world hunger is endangered by the ‘ideological wedge that threatens to split’ the movement, he said. Gates highlighted that some groups support technological solutions to increase agricultural productivity without regard to environmental and sustainability concerns. Then there are those who question any emphasis on productivity, he said.”

Yesterday’s DTN article indicated that, “Nonetheless, Gates championed the need to increase agricultural productivity, particularly in Africa. He cited that higher productivity protects land use. ‘When productivity is high, people can farm on less land,’ he said.”

Philip Brasher reported yesterday at the Iowa Politics Insider Blog (The Des Moines Register) that, “Bill Gates, the Microsoft chairman who is pouring part of his fortune into alleviating global poverty, defended the use of genetically engineered crops to help poor farmers increase food production.

“In what was billed as his first major speech on agriculture, Gates chided critics who he said are ‘instantly hostile to any emphasis on productivity’ and ignore the challenges to food production posed by climate change.

“‘They act as if there is no emergency, even though in the poorest, hungriest places on earth, population is growing faster than productivity, and the climate is changing,’ Gates said, giving the keynote speech at the World Food Prize symposium.

“Gates said transgenic crops ‘can help address farmers’ challenges faster and more efficiently than conventional breeding alone.’”

Reuters writers Christine Stebbins and Roberta Rampton reported yesterday that, “The fight to end hunger is being hurt by environmentalists who insist that genetically modified crops cannot be used in Africa, Bill Gates, the billionaire founder of software giant Microsoft, said on Thursday.

“Gates said GMO crops, fertilizer and chemicals are important tools — although not the only tools — to help small farms in Africa boost production.”

The AP reported yesterday that, “The world can make huge strides in reducing hunger and poverty by helping the world’s poorest farmers become more productive, Microsoft Inc. co-founder Bill Gates said Thursday.

“Gates, co-chairman of the Bill & Melinda Gates Foundation, spoke at the World Food Prize symposium, where he said more needs to be done to help small-holder farmers in Africa increase production and get their crops to market.”

Yesterday’s article added that, “Earlier Thursday, the Gates Foundation announced nearly $120 million in grants to help bring a green revolution to sub-Saharan Africa.

“About half the grants will go toward agriculture research in Africa, including experiments with sorghum, millet, legumes and sweet potatoes. Several unusual projects also were announced, including proposals to use cell phones and radio programs to educate small farmers.”

Washington Post columnist Michael Gerson noted in today’s paper that, “When you are Bill Gates — directing a foundation with assets larger than the GDPs of 104 countries — your enthusiasms get amplified on a global scale. Six or seven years ago, Gates read a book by Gordon Conway, ‘The Doubly Green Revolution: Food for All in the 21st Century,’ which argued for a second green revolution, this time in Africa. The Bill and Melinda Gates Foundation has since devoted several hundred million dollars to this cause. It is now on the policy agenda of the president, the secretary of state and the Group of 20, which recently pledged $22 billion to help poor farmers increase their productivity.

“During a recent conversation, Gates described himself as a ‘city boy,’ but spoke with typical wonkish intensity about wheat rust, marker-assisted selection and finger-millet outputs. ‘The world moved away from a focus on seeds and plant disease in a dangerous way for 20 years,’ he told me. Gates is determined to push a revival.

“His reasons are strategic. Approximately three-quarters of Africans are employed in agriculture, but about 30 percent of people on the continent suffer from hunger and malnutrition. Over the next few decades, African farmers will need to feed a growing population without expanding into ecologically important lands, while adapting to climate disruptions that make drought, pests and floods more common. They will need Gates’s help, and more.”

Mr. Gerson noted that, “Will the resistance to genetically modified food by European regulators, activists and media be a problem? ‘It could be a big obstacle,’ admits Gates. This opposition began ‘at a time when the benefits [of this technology] were small — tomatoes that lasted longer on the shelf — and at the same time as Chernobyl and mad-cow disease. People wondered whether scientists were tough enough on themselves about the risks they were creating. Now the benefits are likely to come — offsetting the damage of climate change, addressing the situation of the poor. The maturity of science is greater, and the experience with these crops has been very good.’”

With respect to the EU and GMO’s, Reuters news reported yesterday (article posted at DTN, link requires subscription) that, “The European Union’s farm chief urged governments to stop blocking imports of animal feed if it contains only traces of banned genetically modified organisms (GMOs), saying such policies harmed the meat sector.

“EU Agriculture Commissioner Mariann Fischer Boel said EU countries should look at scientific evidence rather than emotions, as is now the case, when deciding on authorizations for new biotech products.

“‘The last thing farmers need now is an increase in feed prices. For some of them, it would be the last straw,’ Fischer Boel told a GMO panel discussion in Brussels on Thursday.”

Also on the issue of genetically modified crops, Clive Cookson reported yesterday at the Financial Times Online that, “The European Union may still be resisting genetically-modified crops but GM plants continue to spread across farmland elsewhere.

“The leading annual survey of GM in agriculture, published earlier this year by the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), showed the worldwide area of ‘biotech crops’ increasing from 114m hectares in 2007 to 125m ha in 2008, producing a harvest worth $7.5bn. The number of farmers planting GM crops rose from 12m in 22 countries to 13.3m in 25 countries.

“Clive James, ISAAA chairman, says the most significant development last year was the first commercial planting of biotech crops in two African countries: maize in Egypt and cotton in Burkina Faso. Both crops contain Bt genes from bacteria, which kill insect pests. In 2007, South Africa had been the only country on the continent with GM plants: cotton, maize and soya.”

Yesterday’s FT article explained that, “Mr James, a strong supporter of GM in agriculture, says: ‘Future growth prospects [in Africa] are encouraging. The positive experiences in these new regional footholds will help lead the way for neighbouring countries to learn by example.’”

In other news relating to the general topic of food security, Bloomberg writer Alan Bjerga reported yesterday that, “Economic rebounds in China and India will support crop-price gains without spurring inflation in the next 18 months, according to J.B. Penn, the chief economist for Deere & Co., the world’s largest maker of farm machinery.

“Recoveries in Brazil and the U.S. will also be good for farmers, Penn said today in an interview at a global-hunger conference in Des Moines, Iowa. Declines in the prices of corn, soybeans and wheat from records last year represent a ‘rebalancing’ of commodity costs that is laying the groundwork for growth, he said.

“‘As the global economy recovers, we can see demand pick up again,’ said Penn, a former undersecretary at the U.S. Department of Agriculture.”

Yesterday’s Bloomberg article stated that, “Growth outside the U.S. will also be necessary to meet food demand the United Nations expects to increase by 70 percent by 2050, Penn said.

“The number of people going hungry each day has expanded to a record 1.02 billion people, the UN Food and Agriculture Organization said this week. Climate change is contributing to water shortages and land degradation, while dwindling fish catches and the use of crops to make fuel and cereal grains to feed livestock will weigh on food availability, the agency said in a February report.”

Meanwhile, Samuel R. Berger, a former national security advisor to President Clinton, noted in an Op-Ed that was published in today’s Los Angeles Times that, “Every day we wake up to headlines and images of devastating violence in hot spots around the globe. In Pakistan, for example, attacks over the last few weeks have killed scores and seriously injured many more. But beneath the headlines, there is another great challenge that is often the root cause of violence or its unintended consequences: increasing rates of hunger and an alarming lack of food.”

Mr. Berger stated that, “Today, on World Food Day, we must understand that hunger and conflict go hand in hand. Millions of people in poor countries suffer the burden. In 2008, protests over high food prices swept the globe. In Haiti, demonstrations turned into violent riots, killing many and causing widespread looting.

“These explosions are no surprise. Empty stomachs breed panic and desperation, while extremist groups — such as the one in Pakistan that carried out the recent attacks — use food to advance their violent missions while undercutting security.”

Today’s opinion item concluded by saying, “Ensuring that no child goes to school hungry is the single greatest investment we can make in building prosperous, healthy and stable societies. The United States and other developed nations must make nutrition a requirement in peacemaking strategies.”

Why is it so hard to accept that food should be produced, to the extent possible, in the region where it is needed?

A less than uninspiring "trade week" - in spite of the G-20 summit

2009-09-27T19:40:00.000+02:00

Top government officials of about 20 of said to be most influential economies of the world met for a pow-wow in Pittsburgh. Expectations in respect of guidance and leadership in dealing with the present economic crisis were high.

The outcome however is short of even the most modest expectations. Loser, in particular, is WTO and the role attributed to free trade in making a better future. How can salary policies of banks become more important an issue for heads of state than fundamental decisions in the area of (i.e.) trade policy - bad days for all those that are convinced that the free exchange of goods and services all around the globe are the best receipt for maximum global welfare - and therefore, indispensable prerequisite for global peace - ????????

For a first hand impression on the most disappointing summit results, check out yourself these links:
Radio France Internationale (in English)
Neue Zürcher Zeitung (in German)

Back to the real issue - How to bridge the gap ?!

2009-09-20T10:32:00.001+02:00

Our analysis made past weekend "... the Delhi meeting does not seem to have contributed much to bridging the gap between the political ambition and the real world... " has been confirmed by the development of the situation or, as Bridges Weekly reports on September 16 (for the full text, click the link):

Senior Officials Discuss Doha 'Road-Map'
Senior negotiators from major trading nations met in Geneva this week to try to agree on next steps for the troubled Doha Round of trade talks, following a ministerial meeting in Delhi where governments agreed to re-energise negotiations with the aim of concluding the round in 2010 (see Bridges Weekly, 9 September 2009, http://ictsd.net/i/news/bridgesweekly/54723/). However, several delegates expressed scepticism about the prospects for progress in the absence of any movement in countries' actual negotiating positions. ...

Key among the many issues that do not help brifging the gap is certainly the fact that the still largest trading nation, the USA, do not appear to have a clear picture of their respective strategy and goals. At least, the office of the USTR has returned to the floor with a statement on September 18, after having remained silent for more than 4 months - for the full statement click the link here: USTR Statement at Close of Senior Officials' Meeting in Geneva - some elements follow below:

... an important element of moving Doha forward will be for key Members to begin a sustained bilateral engagement to assess the nature of the gaps that exist and address them -- particularly with regard to market-opening contributions under Doha by key emerging markets. ...

A little bit of news as to what the Doha-vision
of the US might be would be helpful.

So much for today.

Delhi Meeting 'Breaks Impasse' in Doha Talks - Does it?

2009-09-13T16:06:00.000+02:00

The title of our today's column is inspired (once again) by Bridges Weekly Trade News Digest - Volume 13 - Number. For the full article click the link. Interesting is the following section of Bridges text:

The technicalities of the talks were officially off the agenda at the Delhi meeting; the ministers instead focused on overcoming political hurdles to progress toward a deal. Judging from the officials' public pronouncements, at least, that objective seems to have been achieved.

With all respect to the highly prized analysts: The above sequence is worse than an outright admission of failure. For the past years, the Doha Round has been facing only technical hurdles. If anything hang around in abundance, then it was political lip service in favor of swift conclusion of the Doha Round. Most conveniently, politicians left the leg work to the technical workers (some call them negotiators or trade diplomats) and they did not worry about the unbridgeable gap between visionary political will and the real world of so called technical issues.

In short, the Delhi meeting does not seem to have contributed
much to bridging the gap between the political ambition
and the real world of technicalities.

So much for today.

Follow Up

2009-08-23T21:40:00.000+02:00

Completing past week's "reflections during the WTO Summer Break" - I would like to add as an illustrative element the Grain Market Report of the International Grains Council issued on July 30 (download report: gmrsumme.pdf) - read through the document and look in particular at the development of stocks .... enjoy your reading!!!

WTO Summer Break - Time for reflection

2009-08-15T16:23:00.000+02:00

With his speech to WTO General Council on July 28 2009, Director General Pascal Lamy raised the stakes and thel level of ambition for activities in fall and winter:

"Our task now is to match political promise with negotiating performance" - Lamy

Director-General Pascal Lamy, in his report to the General Council on 28 July 2009, said that at the informal Trade Negotiations Committee meeting the day before, "there was unanimous agreement that if we are to get to our destination on time, the renewed level of political re-engagement by leaders urgently required translation into tangible progress in the negotiations". He also reported that the second WTO Aid for Trade global review was a success and "a clear demonstration of our collective resolve to address the capacity challenges facing developing countries".

Raising stakes and levels of ambition is one thing - taking stock of the situation, keeping in touch with the reality the other. I would like to share with you some thoughts I had earlier today when running to the top of the Niesen mountain.

We stand at an interesting moment in time. The global economic crisis, said to last forever some months ago, has been starting to show signs of bottoming out. The number o silvery strips detected on the horizon has been growing and businesses start to plan for a return to expansion and growth of demand.

It might well be a good moment to look what happened to world trade in the past say 2 years - and I would like to focus primarily on agricultural markets - and to reflect on what the lessons might be for negotiators, so that stakes and levels of ambition are not set for nothing.

Here some of the thoughts in random order:

Volume of world trade decreased, affecting the whole value added chain, from producers of raw materials and commodities straight thru to industries, transport services, .... you name it.

Markets, including agricultural markets have proven to be quite efficient, producers reacted swiftly to price signals, increasing supply, some 2 years ago - and they have started to scale back with prices collapsing - this holds true for relatively liberal markets as well as for those benefitting from significant levels of protection.

Export restrictions for food - or thoughts about implementing them - or other means to influence market behaviour have been turning more prominent - be it restrictions on exports by Argentina (an important supplier of grain and meat to the world) or "Buy American" campaigns by another WTO Member that claims to feed the world provided markets permit to do so.

The expected food crisis in the NFI LDCs (Net food importing, least developed countries) does not seem to have happened - even though interested organizations continue to claim so - where food was a problem over the past 12 months it was caused by elements unrelated to the economic downturn - elements well known and unchanged (see Darfur, Zimbabwe, etc)

R. Zoellick, World Bank CEO, APRIL 2008: (Food) Prices are unlikely to drop soon. The United Nations Food and Agriculture Organization says world cereal stocks this year will be the lowest since 1982. - What a blunder!!! And nobody worries about cereal stocks an year later.

The listing could move on for a while - but let us think about what this means:

1. The decoupling of agricultural support is effective - ag markets work and members can use ag policy space.

2. No, markets do not work: as soon as shortages of supply show up - even in agricultural power houses - export restrictions surge or other means to (inevitably) prefer the domestic consumer over the one abroad are put in place.

3. Economic analysis and politics of international organizations have little to do with reality and much with institutional interest - and FAO is one of the more telling examples.

For our ag negotiators in Geneva, the signal is simple:

Pursue the path of decoupling - reduce direct subsidies to production / keep policy space with well defined decoupled measures (no country can afford to abandon agriculture)

Enter into serious discussion on what the inevitable return to "Food Sovereignty" means for WTO - It is by now clear that the term coined by Via Campesina is not a far fetched idea, but a concept put in place - though without admitting - by most WTO Members. Any Doha deal will need to reflect this reality.

So much for today.

WTO Doha Round: the gap between political talk and action

2009-07-29T21:14:00.000+02:00

I had it taken fro granted, a couple of weeks ago, that WTO had been going for an early phase in of the summer break, given the scarcity of news and information.

The following recent pieces of information are therefore most interesting before all when put in context:

A) Lamy in the Trade Negotiations Committee, July 24

TRADE NEGOTIATIONS COMMITTEE
Lamy presents road map for the autumn negotiations

Director-General Pascal Lamy, in his report to the informal meeting of the Trade Negotiations Committee on 24 July 2009, said he sensed from recent Summits held in Bali, Paris, L’Aquila and Singapore “a genuine and strong renewal of political commitment to re-engage in the Doha negotiations to conclude it in 2010.” He said the autumn will be “a very busy period” for all negotiating groups, and that “we have to ensure the whole caravan moves forward together and arrives on time.”

B) The reaction of Delegates in General - as seen by Bridges Weekly

WTO Delegates Decry 'Gap' between Talk and Action on Eve of Summer Break
WTO Director-General Pascal Lamy set out an ambitious autumn schedule for technical work in the Doha Round trade talks in two addresses to delegates just before the organisation breaks for its annual August holiday. But many officials were quick to point out the 'mismatch' between strong ambitions for the talks at the political level and

C) Thew specific reaction of one Member / its Head of Mission, respectively - I received this last info from my good friend Hilton Zunckel, Trade Law Chambers, South Africa):

GIs and CBD
Geneva - Switzerland again insisted yesterday that it will not accept a final Doha Development Agenda trade agreement that does not include extension of Geographical Indications to goods beyond wine and spirits, WTD has learned (WTD, 7/21/09).
World Trade Organization Director General Pascal Lamy yesterday held an informal meeting to discuss two TRIPS-related issues - GI extension and disclosure provisions and patent protection for genetic resources. The Director General briefed members on the state of play on the two divisive issues.
Swiss trade envoy Luzius Wasescha criticized opponents of GI expansion - led by the United States and Australia - for their refusal to engage, trade envoys said.
The United States, Australia, Chile, Argentina, Canada and several other farm-exporting countries ruled out any negotiating scope for GI extension, but showed flexibility on the TRIP/Convention on Biological Diversity issue, trade envoys said. Australia has maintained that proponents of GI extension have failed to establish their case that would warrant changes in the TRIPS agreement. They insist it is wrong to link the two TRIPs issues with the Doha mandate.
On the TRIPS/CBD issue, Australia and the United States said they agree on the issues of prior consent and benefit sharing for traditional knowledge and genetic resources, but argued against the need for disclosure norms.
In sharp opposition, India trade envoy Uzal Singh Bhatia pointed out that the levels of bio-piracy have reached alarming proportions. While there is a concerted attempt to upgrade intellectual property rights enforcement under the TRIPS agreement, the same does not seem to apply to traditional knowledge and genetic resources, he said.
Director General Lamy intends to continue his consultations with Geneva-based trade envoys and convene another meeting October 8, WTD was told.

Trade Reports International Group, Washington, D.C. July 28, 2009

The combined effect of these news items is indeed interesting:

Lamy - tough Marathon runner as he is - stubbornly pursues his vision and target

Negotiators cry foul and they do so because they are the ones suffering most from the obvious gap between summit language of their heads of state and the constraints of their respective negotiating mandate.

One member comes up with specifics - unlikely so by coincidence - because product differentiation is seen by many European Members as a significant measure to improve domestic and international marketeability of their produce, once tariffs no longer provide for differentiation by price. Indeed, the EEC must have been happy that Switzerland made this "bold" move.

However, looking at the picture from a certain distance, we conclude similarly as commented here earlier: The level of ambition of the DDA has become too high - for several reasons: Economic situation - Advanced Emerging Economies that continue asking for Developing Country treatment ... and so on. The news items discussed here confirm and support the analysis of my June 21 comment:

10 years after Seattle

Enjoy reading.

10 years after Seattle

2009-06-21T17:22:00.004+02:00

Back in early December 1999, WTO held a Ministerial Conference in Seattle, USA. Expectations were high, as can be seen from the WTO backgrounder prepared for that event. Here some excerpts:

... The ministerial conference is the organization's highest-level decision-making body. It meets "at least once every two years", as required by the Marrakesh Agreement Establishing the World Trade Organization -- the WTO's founding charter.

The Seattle ministerial will be the third since the WTO was created on 1 January 1995.

What's special about this ministerial?

This ministerial will launch major new negotiations to further liberalize international trade and to review some current trade rules. It will also set in motion a work programme to look at other important issues. ... (For the full backgrounder, click here)

So much for the visions and the expectations
linked with the ministerial gathering 10 years past.

Some of the visitors of this site may recall that the Seattle reality, from November 30 to December 3 1999 was different.

Civil Society made the ministerial gathering fail - fail in the crude sense of the word - it was not that trade ministers would have been a priori unable to agree on this or that - the huge protests and public resistance made any decision politically impossible and even inhibited attendance of participants to some of the individual meetings.
For a overview of media and NGO coverage, visit the following sites:

BBC / GLOBALISSUES

The Seattle situation escalated to a point that even the then secretive WTO itself, unheard of before, addressed the public:

Criticism, yes ... misinformation, no!

(click the link)

With 10 years of distance, it may be worthwhile to look at:
- some of the fundamentals of those protests
- the lessons WTO learned
- unfinished business

The fundamentals
I stick to 3 key issues - being well aware that the full reality is more complex.

Fundamental 1: SECRECY - GATT talks had been of little interest to the big public - and WTO continued in the same footsteps. In the early days of GATT, and even when WTO was founded, this was of little concern to the global society. This however started to change with the growing level of ambition that WTO displayed once the Uruguay Round implementation was well under way. Increasingly, public society, through many NGO's, started to feel uneasy about the secretive process among bureaucrats and trade ministers that was expected to have significant impact on the way the world's future was shaped. Seattle was an expression of those feelings.

Fudamental 2: ILLUSION OF A DEVELOPMENT JUMP-START - Trade is a strong driver for development - nobody will reject that affirmation. David Riccardo has shown us why. Largely for political reasons, the dimension of the term "development" has been overstated in the entire post Uruguay-Round era. Entire libraries have been filled with research on trade, development, poverty, food security and the links between these issues. For today, I limit myself to the following statement:
WTO lost sight of the quite simple fact that trade liberalization can only benefit those that have tradeable products. Unfortunately, many of the poorest and most development-needy countries ( i.e. many LDCs) possess little or no tradeable goods. For them, trade liberalizations means primarily less food for free (subsidized surplus disposal) and a higher imported food bill. It is not WTO that can address their immediate needs.

Fundamental 3: THE DECISION MAKING POWER OF THE FEW LARGE TRADING POWERS
In the past, WTO had been driven primarily by the US - and the Seattle incidents may have marked something like the culmination point of that dominance.

The lessons learned by WTO
Of the 3 fundamentals identified above, WTO itself tackled the issue of secrecy. With a level of success that we can replace the word secrecy with Transparency. WTO today has an impressive inclusiveness, involving stakeholders in all processes. A transparency that would have been unbelieveable a few years back.

Recent events, and the success of the UR, have resolved the monopolistic position of the few super powers back in 1999. The US is one in a large group of significant global trading powers - and many of the them are developing or emerging economies. Decision-making power is quite well balanced, now.

Unfortuantely, the illusion of the "development jump start" continues to be fostered by WTO, seemingly against better knowing.

UNFINISHED BUSINESS

Reaching a consensus among widely disparate and complex issues is a true challenge in a secretive and secluded green room. The challenge grows exponentially should the secrecy and exclusivity of the green room be replaced with public exposure and discussion. Well, this is what has happended to WTO.

Where is the problem?

The Doha Round, agreed in 2001, has incorporated a level of ambition adequate for the secluded and secrete negotiation process. It is a level of ambition that cannot be held up with the transparency and inclusiveness that are the mark of 2009. Technicalities aside, I am convinced that it is here where the fundamental obstacle to the successful conclusion of the Doha Round is found. Said this, there is one way out: the level of ambition needs get reduced substantially both horizontally (number of areas under negotiation) as well as vertically (deepness of concessions to be made).

If there is one issue of importance for the Ministerial Conference in Geneva in December 2009, then it is the reduction of the levels of ambition written into the mandate given to negotiators.

Dead Aid: Why aid is not working

2009-06-14T20:20:00.000+02:00

Dambisa Moyo - in her recent book entitled "Dead Aid" she brings forward strong arguments:

... one of the greatest myths of our time: that billions of dollars in aid sent from wealthy countries to developing African nations has helped to reduce poverty and increase growth.
In fact, poverty levels continue to escalate and growth rates have steadily declined—and millions continue to suffer. Provocatively drawing a sharp contrast between African countries that have rejected the aid route and prospered and others that have become aid-dependent and seen poverty increase, Moyo illuminates the way in which overreliance on aid has trapped developing nations in a vicious circle of aid dependency, corruption, market distortion, and further poverty, leaving them with nothing but the “need” for more aid.

Debunking the current model of international aid promoted by both Hollywood celebrities and policy makers, Moyo offers a bold new road map for financing development of the world’s poorest countries that guarantees economic growth and a significant decline in poverty—without reliance on foreign aid or aid-related assistance. ...

Eveline Herfkens, Founder, UN Millennium Campaign; former Dutch Minister for Development Co-operation; and Chair, ICTSD Board, has discussed the text quite extensively in the recent "Bridges Monthly" - while, at a quick glance, her arguments seem quite straight forward - there is one sentence that says it all:

... But regarding her (Dambisa Moyo's) criticism of aid, frankly, I feel the ‘aid-business’ has reacted too defensively. ...

Difficult to find a a better way to spell out, without doing so in straight words, that Dambisa Moyo is right on target with her arguments.

WTO Ministers meet in Geneva in December - will Doha Round be an issue?

2009-05-31T13:09:00.001+02:00

WTO has finally reached a consensus to move forward with a Ministerial Conference, to take place in Geneva late November early December. For the full WTO communication, click here - 7th Ministerial Conference.

Two issues, completely unrelated are interesting, one deals with the setting, that made the conference possible, the other is an anecdote from Switzerland from within the same context.

1 - What has made the Nov - Dec 09 Ministerial Conference possible
Until the very recent past, Mr Lamy has been implying that the next Ministerial Conference's purpose will be that of, if not the conclusion, the inking of significant progress in the Doha Round. In line with what I have been writing on this site since the last Ministerial Conference, there is no real Doha progress.
It is therefore of little surprise that suddenly a Ministerial Conference gets scheduled without major concerns, once Doha is removed from the Agenda - or, in the words of WTO General Council Chair:

... I would like to stress the word "regular", as it has also become clear that this Conference is not intended to be a negotiating session - the DDA negotiations are on a separate track. ...

... This departure from past Ministerial Conferences could help us establish a new model of Ministerial-level meetings conducive to good governance and overall review of the WTO, and one that is not inextricably tied to any particular ongoing negotiations ...

... In this context, the nature of this Conference should be kept firmly in mind - the meeting is not intended as a negotiating session, but rather a regular gathering of Ministers to engage in a broader evaluation of the functioning of the multilateral trading system. ...

Of course, Doha Round will be remain the issue in informal talks. However, this setting may well have lowered pressure and expectations so that progress might now become possible.

2 - The anectote from Switzerland
In the May 27 2009 issue of NZZ, WTO / Doha Round was part of two news items:

Item 1: Swiss Federal Councilor (Trade Minister) Leuthard tells one of the Chambers (Nationalrat), in the course of a debate involving agricultural trade policy matters, that:

... Eine nächste Ministerkonferenz sei bereits Ende 2009 möglich; die Dauha-Runde könnte 2010 abgeschlossen sein ... (... a Ministerial is possible before year end, a Doha conclusion in 2010) ..

Implicitly, Minister Leuthard clearly establishes and underscores the link between Doha negotiations and Ministerial Conference ....

Item 2 (Same day, same newspaper) Title of the news item:

Abgespecktes WTO-Ministertreffen in Genf
Dauha-Runde ausgeklammert

(Scaled down WTO-Ministerial in Geneva
Doha Round excluded)

This unfortunate coincidence eithers shows us a badly briefed Trade Minister - or it illustrates - again - that a political argument is more important than the fact behind ...

Food Sovereignty - taking food security a step further

2009-05-23T21:19:00.002+02:00

Only after reading the following note, I perceived in full the global implication of what had happened in Madagascar in the recent past. But first the note, quoted from Bridges Weekly:

NGOs Cry Foul over Rich-Country 'Land Grab' in Developing World
A recent jump in rich country land purchases in the developing world has caught the attention of analysts in trade and human rights circles. In many cases, governments and private sector parties to such deals have remained mum on the details of the acquisitions, a fact that has caused some concern among NGOs, who worry that the scale of the acquisitions could potentially undermine development and food security objectives. But The World Bank insists that the large-scale purchases of developing country farmland can facilitate the transfer of technology and technical know-how, and ultimately have positive impacts on local populations. (For the full article, click here)

The fears expressed, and I think rightfully expressed, highlight the continental divide between the principles of free trade and what some refer to as "Food Sovereignty". Some the principles of food sovereignty, as coined by Via Campensia more than a decade ago, are merely ideological, others quite straight forward. The concerns as voiced above need serious consideration. Unfortunately, I do not think that the views of the World Bank (see above) address the real issue.

In fact. what wee see is the discussion of what comes first and what second:

Is it global free trade in food?
Is it the interest of ALL domestic consumers, when it comes to domestically produced food?

Some will object and insist, that international trade law offers all the instruments necessary. In fact, one of the big food exporters of the World (Argentina) is world champion in preferring the domestic consumer over the world market - with the application of export taxes going as high as 50% market prices.

The issue here is different, a hypothetical example:
An industrialized or emerging economy X sources its food needs to a large extent from farming operations it runs in LDC Y. De facto, Country X bypasses the international food markets. By circumstances, Y faces a considerable food shortage. Country X continues to supply its market from its Y operations and rejects requests to deliver production to the local Y market. Assume that the Y government has little political or other power to effectively impose its demand.

An unrealistic example? Maybe.

However, should significant quantities of food be withdrawn from open international trade by shortcuts as illustrated above, then the challenge will be there. WTO might be well advised to look closer at the matter. The World Bank view (... insists that the large-scale purchases of developing country farmland can facilitate the transfer of technology and technical know-how, and ultimately have positive impacts on local populations ...) is certainly of little help.

Doha - Negotiations - Skipping Modalities - Cutting of the Gordian Knot?

2009-05-10T11:17:00.000+02:00

The Gordian Knot is a legend associated with Alexander the Great. It is often used as a metaphor for an intractable problem, solved by a bold stroke.

The intractable problem solved by Alexander the Great with a bold stroke compares nicely with the state of play of the DOHA Round. The negotiations, even more with the increased ambition of the new US administration (labor standards ..) have reached a stage where any common denominator still left got definitely lost. This loss is evidently due to the complexity of an agenda that goes beyond the handling capacity of a multilateral, consensus-based decision-making process.

The proposed short cut to a result -

Trade officials in Geneva are considering a new approach to the Doha Round that would bypass the negotiation of modalities - the broad outlines of a deal that WTO Members have been struggling to forge for more than seven years - and move directly into scheduling countries’ specific commitments on cutting tariffs and reducing subsidy levels.

- is therefore more than promising:

The complexity of the agenda is reduced substantially
Thea area of mutual interest based partial agreements is increased
The possibility to come up with (direly needed) visible results becomes real, again

This however has a price:

The multilateral, all-inclusive process is abandoned
Any result will consist of sectoral deals among interested trading partners
Members without real trade interests will be locked out (i.e. most LDCs)
And, of course, any development component that should go beyond market access and straight forward, trade distorting subsidies will have lost its space

Argentina evaluates suspension of Glyphosate use

2009-04-26T10:52:00.000+02:00

Glyphosate, also known under the original Monsanto brand name of "Roundup" is a broad spectrum herbicide. It made, together with genetically modified corn, soybean or canola varities resistant to Glyphosate, the revolutionary no-till agricultural systems possible.

No-till farming has been among the most significant developments over the past decades in agriculture. It made an impressive growth of food and feed production possible. This first by stopping soil degradation and second by enabling the use of vast tracts of land for farming that had to be considered unfit for tilling until then.

The report from Argentina, one of the countries that had been spear heading the no-till revolution, to consider a Glyphosate ban, is alarming and it is potentially very bad news for the world food situation. For details see the report in the "La Nacion" - El Campo Supplement, dated April 25, 2009.

PPM - WTO talks get spiced up!

2009-04-21T18:10:00.000+02:00

The European Union relaunches the epic WTO discussion on product-likeness. Under the cover of "Support to indigenous peoples and local population" the EU proposes legislation with the following policy objectives:

Policy objectives

Arctic indigenous peoples in the EU are protected by special provisions under European Community Law. A key principle of the Joint Statement on EU development policy is the full participation and free, informed consent of indigenous peoples. EU regional policy and cross-border programmes also benefit indigenous peoples, whose organisations participate in the Northern Dimension. Rights of indigenous peoples are a thematic priority under the European Initiative for Democracy and Human Rights.
Hunting marine mammals has been crucial for the subsistence of Arctic populations since prehistoric times and the right to maintain their traditional livelihood is clearly recognised. However, modern human activities have put certain of these species in danger and there is growing concern in the EU about animal welfare. EU policies should continue to take all factors into account, seeking an open dialogue with the communities concerned.
Proposals for action:
Engage Arctic indigenous peoples in a regular dialogue.
Provide opportunities for self-driven development and the protection of their lifestyle.
Support in particular the organisations and activities of the Saami and of other peoples of the European Arctic, inter alia under regional and cross-border programmes. Promote Northern European know-how in reindeer husbandry.
Continue efforts ensuring effective protection of whales especially within the framework of the International Whaling Commission (IWC), including in the Arctic context. Support proposals for the management of indigenous subsistence whaling, provided that conservation is not compromised, whaling operations are properly regulated and catches remain within the scope of documented and recognised subsistence needs.
Conduct dialogues with indigenous and other local communities traditionally engaged in the hunting of seals.
The Community is currently considering banning the placing on the market, import, transit and export of seal products. However, this should not adversely affect the fundamental economic and social interests of indigenous communities traditionally engaged in the hunting of seals. Under the terms of the Proposal for a Regulation of the European Parliament and of the Council concerning trade in seal products [ ~ 92 Kb], seal products resulting from hunts traditionally conducted by Inuit communities which contribute to their subsistence are exempted. The proposal also foresees that trade is allowed in other cases where certain requirements are met regarding the manner and method whereby seals are killed and skinned. The Commission’s dialogue with the indigenous communities concerned will aim to facilitate the practical implementation of these provisions.

While the text of the legislation proposed pushes forward the support to indigenous people and local population, the spirit of the legislation clearly targets Canada and Norway where, local population or not, the slaughtering of baby seals represents an important part of the regional economy. Accordingly, both nations have already started airing their strong objections.

At first sight, the proposed EU legislation looks reasonable. However, the arguments brought forward, and the exemptions granted, look like arguments on thin ground.

Is a seal skin harvested by an Inuit hunting for his subsistence different to a skin hunted by John Nameless, both using exactly the same procedure?

The PPM discussion is critical to WTO

- what are like products as referred to i.e. in GATT Art.I.1. or GATT Art. III.4. ? -

this issue has been put to test in several occasions and those tests have not contributed much to clarify the situation. Unfortunately, the way the EU argues here does not look as if it was to help the matter.

At the same time, it is certain that WTO-law needs to evolve and it needs to admit production differenciation on the ground of production methods, even though such methods should not be discernable in the physical properties of the product. Such differenciation is too important to be left to private labels and the discretion of the consumer. I.e. the ecological (sustainability) footprint of a product will need to become part of its properties - and international trade law will have to ensure exactly that.

The big question is, whether case law, as being forced in the above case, is the right way forward?

The financial services triggered global crisis, G-20 and WTO

2009-04-11T15:10:00.005+02:00

It is kind of ironic that exactly that sector of the global economy that resists most a binding global set of rules - financial services - is the one that triggered the economic crisis in which the world has been caught since some moment in 2008.

It is moot to discuss why international disciplines governing the finance industry never made it off the ground. Facts are:

The trash loan bubble was made possible by a market system that has been lacking everything that would come close to what we might consider a beginning of transparency.

Financial Services continue largely outside any internationally coordinated legal umbrella - for easy reference, just read through the WTO Summary on Financial Services - even the by profession and vocation overly optimistic WTO-Secretariat staffers find it hard to identify the single grain of substance. In short: Financial services continue to be ruled by exclusion rather than competition and by a number of rating agencies that very clearly had lost, time ago, the grip of the reality.

The result is:

A collapsed banking and finance industry (it only continues to operate thanks to the taxpayer) that has drawn the rest of the economy down the drain, too

An International Monetary Fund that has nothing to contribute towards addressing the causes

The Bank for International Settlements is not present on the battlefield, even though its purpose might will justify just that (have a look at their site)

The self-appointed "leaders of the world" - the G-20, an illegitimate organization that operates outside any international legal framework and where erratic parts of the global population are represented - make things worse by raising expectations and by failing to deliver.

My view:
I fail to understand why the otherwise so audaciously optimistic Pascal Lamy, who grabs every opportunity to speak for WTO and its aims, remains so discreet in the wake of this finance industry induced global recession. Take this as an example, quoted from WTO News:

Lamy welcomes G20 Summit’s pledge to support trade finance
WTO Director-General Pascal Lamy today welcomed the G20 Summit’s pledge to support trade finance. “Trade is contracting sharply, exacerbated by the lack of trade finance. The G20 commitment to provide US$ 250 billion for trade finance shows the capacity of the international community to address urgent global needs by helping to restore trade as an engine of growth.”
> G20 communiqué

Why for god's sake does Lamy not stand up and stress that:

... only a financial services industry subject to global rules comparable to those governing trade in goods will be able to withstand the recurrence of similiar incidences in the future ...

... WTO is the best placed organization to do that, provided an international consensus, a real mandate to negotiate, can be agreed upon ...

Food Crisis lingers - is that really so?

2009-03-29T16:40:00.005+02:00

Bridges Weekly Trade News Digest • Volume 13 • Number 11 • 25th March 2009

surprises us with the following headline story:

While Economic Turmoil Grabs Headlines, Food Crisis lingers

I strongly invite everybody to read the full story (click the headline) to make up your own opinion.
In my view, we look at an eye catcher of a headline without there being one single argument in the text manages to substantiate the alarm bell of the headline. The article is stuffed with basically useless, though alarming, research guesswork.
One piece of comment however puts everything in context:

... FAO predicts that yields for cereals in 2009 are likely to be below last year’s levels. For example, winter wheat harvests are expected to fall by 50 percent in Argentina and some parts of China. At the global level, though, more cereal will be produced than will be consumed. World cereal stocks are expected to return to levels not seen since 2002, possibly providing a cushion against volatility. ...

So, instead, instead of ringing the - obviously development community friendly - alarm bell, as done in this article, one could well reach the alternative conclusion that:

... the world food system managed to react with swiftness to the short-term supply / demand shocks of 2007 / 2008. Even experts were surprised how well regional imbalances were compensated globally and how fast production took up market signals ...

Why sells the pessimistic alarm bell so much better?

Compliance (with UR) - done rightfully - a good remedy against protectionist tendencies

2009-03-22T16:54:00.004+01:00

Past week, I argued strongly in favor of ensuring compliance with existing WTO commitments:

... Segregating compliance from negotiation, putting emphasis on on compliance, is not so bad an idea. Though maybe a short term challenge for WTO and the Doha process - Long term success is indeed better served with decent compliance before new horizons are explored.

UBS Wealth Management Research has published, on March 17, a most interesting research paper on protectionism:

Protectionism – a very bad idea comes to life again
(UBS FS Inc. Andreas Hoefert andreas.hoefert@ubs.com)

At a glance
The ongoing worldwide recession has already left deep marks in international trade.
Now, the first signs of "murky" protectionism have been spotted.
This evolution should be carefully monitored because it could ultimately exacerbate the ongoing crisis and delay any recovery.

The remark regarding ... the first signs of "murky" protectionism ... is indeed interesting:

According to a World Bank study, anti-dumping claims and actions increased 20 percent in 2008 compared with 2007, and 55 percent in the second half of 2008 relative to the first half of 2008. Anti-dumping actions are extra import duty on particular products from a specific exporting country by an importing country in retaliation for actual or supposed unfair trade. In this regard, the US was particularly active, initiating 21 new anti-dumping measures in the second half of 2008 compared with only two in the first half.

Other protectionist acts are less visible but not less efficient. In a recent study of the Centre for Economic Policy Research, this sort of protectionism was characterized as “murky.” It encompasses abuses of health and safety regulations, so called “green policies,” clauses in stimulus packages that privilege domestic producers, and clauses in
bailout packages for financial institutions to ensure easy credit for domestic producers.
....
Even more worrisome were remarks regarding national preference (like "British jobs for British workers") and in some cases, first steps taken by some European politicians that blatantly contradict, if not the word, at least the spirit of the European Union.

Comment

Compliance does not only mean to comply with the UR commitments -
compliance excludes "murky" protectionism

In the end, murky is nothing else than a nicer word than circumvention
or abuse for exactly the same infraction - and infraction it is.

Key against protectionist tendencies is respect for all existing agreements
(i.e. including the often forgotten SPS or TBT Agreements)
by all WTO Members.

Back to the Hen and egg question: what comes first in WTO? Compliance (with agreements in force)? Negotiations (of new agreements)?

2009-03-15T16:37:00.003+01:00

Dear visitors: before spending some thoughts on our title phrase, I would like to grab the opportunity to thank my steadily growing group of visitors: For the past six months, this site has been enjoying an average of about 70 daily visits, day after day. I am quite proud to get this level of attention for a topic that is not as "sexy" as celeb-community small talk.

Thank You!

Now our hen an egg question. Two pieces of information make an interesting combined reading:

ONE
From WTO, we got a news item on March 12 as follows:

AGRICULTURE

Committee focuses on monitoring agriculture commitments

EU and US domestic support featured among delegations’ questions in a 12 March 2009 committee meeting devoted almost entirely to monitoring how WTO members are implementing their present commitments in agriculture. (click for the full news item)

The WTO news piece then dedicates a special chapter to:

Overdue notifications

An unprecedented number of questions were asked about overdue notifications, which some delegations pointed out is also relevant for proposals in the current negotiations to strengthen members' monitoring and surveillance of how commitments are implemented. Delegates said the previous assessment of notification and review was in 1998/99.

Argentina, Australia and Canada questioned the EU, Egypt, Iceland, India, Indonesia, Rep.Korea, Malaysia, Mexico, Turkey and the US about their overdue information on a range of subjects. Most replied that they were trying to supply the information quickly.

Comments were largely sympathetic about the difficulties, ranging from a shortage of knowledgeable staff among developing countries to the difficulty of compiling data in federal or decentralized political systems in both developed and developing countries.

An informal discussion produced a number of ideas for how to deal with this, which will be developed further over the coming months. They include various methods of finding out what the problems are such as a questionnaire and workshops, and means of ensuring know-how is preserved and shared in various bureaucracies. The discussion is partly in response to a request from the General Council chairperson to all committees for suggestions on how to reduce delays in notifications.

TWO

Former Dallas, Texas mayor and now candidate to the USTR top job Ron Kirk is quoted from the US Senate hearing as follows:

... the hearing, which was noted for its brevity, Kirk confirmed that his agenda would focus more on enforcing rules governing already established trade deals, rather than actively pursuing new agreements. "I do not come to this job with 'deal fever', Kirk commented, alluding to the multitude of deals seen under the Bush Administration. "We will not do trade deals just for the sake of doing deals." ...
(For the full Bridges Weekly news item click here)

Adding ONE and TWO

Lack of compliance has been the Achilles-heel of WTO since the conclusion of the Uruguay Round. One of the better indicators of this fact is degree of delay of the notification process. The legal basis is clear, Art 18 Agreement on Agriculture (for Ag matters):

Part XI: Article 18
Review of the Implementation of Commitments

1. Progress in the implementation of commitments negotiated under the Uruguay Round reform programme shall be reviewed by the Committee on Agriculture.

2. The review process shall be undertaken on the basis of notifications submitted by Members in relation to such matters and at such intervals as shall be determined, as well as on the basis of such documentation as the Secretariat may be requested to prepare in order to facilitate the review process.
....

It is understood and defined accordingly, that notifications by Members are made yearly, due 90 days after the end of the respective period.

While some sympathy is all right for Members that cannot match the 90 days target, there are limits. Members test and exceed these limits in order to withhold up-to-date data from the Doha-Negotiation process and in order to avoid thorough examination of their policies by the Committee - who cares much about discussing trade policy matters 5 years back?

In short: Segregating compliance from negotiation, putting emphasis on on compliance, is not so bad an idea. Though maybe a short term challenge for WTO and the Doha process - Long term success is indeed better served with decent compliance before new horizons are explored.

Lamy-optimism turns bad judgement

2009-03-08T12:20:00.005+01:00

Early March 09, in the course of a business trip to Australia and New Zealand, P. Lamy, WTO - Director General, sees the Doha Round back on track:

World trade ministers could gather to conclude the Doha Round of trade talks before the WTO’s summer holiday, which starts 1 August, WTO Director-General Pascal Lamy said during a visit to Australia on Wednesday ... (for the full note - click this link to Bridges weekly)

This optimism stands indeed in stark contrast to the realities. Let us just pick out a few points.
The headline news in international trade concentrated, in the course of the past weeks on (click the hotlinks for the full infos):

- Regional integration
- Unilateral subsidy cuts due to budgetry restraints
- Protectionist measures 1
- Protectionist measures 2
- and so on ...

Within all this, the heaviest piece of information slipped thru nearly unnoticed and uncommented:

Obama Trade Agenda Cites ‘Imbalance’ in Doha Talks, Urges Focus on Environment, Labour Standards / click the link

This is really heavy stuff - it seems safe to state that with this simple claim, the US resets the Doha Round back to its starting point. How can you credibly discuss "modalities" if one of the more significant WTO-Members signals the need to look at the negotiating mandate as a whole?

In this context, president Obamas trade policy agenda - I strongly invite you to download the document and have a closer look - for the download click here - provides for some interesting rading. Below I have pasted in the concluding remarks at the end of the introductionary notes of the afore-mentionned policy agenda:

Conclusion

This agenda addresses the underlying goals and priorities for this Administration’s trade policy within the context of a financial crisis and rapidly changing economies. A reading of the last Administration’s trade policy record that follows in this volume makes clear that there are many strategic and programmatic choices that must be made to advance the President’s agenda. These choices will be the work of 2009.

Our agenda is to combine the best elements of previous trade policies, especially a rules-based system of global trade, with a determination to make trade policy a powerful contributor to the President’s national economic agenda for revival of the global economy and renewal of growth that benefits all people. If we work together, free and fair trade with a proper regard for social and environmental goals and appropriate political accountability will be a powerful contributor to the national and global well being.

In short, it is safe to conclude that the US will require most of the year 2009 to turn this agenda into (modified) negotiating positions ....

Once we add this puzzle-pieces together,
then indeed Lamy's optimism
seems so misplaced
that a suspicion of bad judgement
is not far fetched.

An unispired fortnight for global trade

2009-02-28T22:00:00.002+01:00

Past weekend, I lacked even the faintest piece of inspiration for writing about global trade issues.

Now, I have somewhat recomposed, even though the lack of inspiration is still there. No wonder:

Listen to the statement of Amb. Wasescha, chair Non - Ag Market Access talks - reporting on the situation of work in his Negotiating Group (click here): Difficult to believe that some 8 years had to be spent to get so far.

A month gone of Pres Obama taking the job - his only reference to trade appears his inviation to his citizens to "Buy American" in order to help overcome the crippling effects of the gambling banks triggered global crisis. For a taste, check this link - HOWTOBUYAMERICAN -

Argentina, Brazil Clash on Import Policies: - Check out the ICTSD Trade News Digest - (click this link). Protectionist attitudes are back even among the most trade dependent nations.

Comment
Unrestricted global trade will be the centerpiece for the global recovery that will come after the hole into which gamblers turned bankers have thrown the world. Therefore, trade policy will need to become an issue dealt with by heads of states. For so long long this remains a matter delegated fully to technicians, the Doha Round will continue the hibernation in which it got stuck somewhere between 2005 (Hongkong Ministerial) and summer 2008 (July 2008 package).
Hibernation is an important strategy for survival of some species - however, and this goes for the living world, it is important to get out of hibernation in time ... maybe this goes for the Doha round, too - any idea when the present Doha Round Hibernation should come to an end?

Doha Round Farm Talks: Falconer trying to bridge the still unclosed USTR gap

2009-02-15T12:15:00.002+01:00

The Doha talks are up to a slow start in this 8th year of negotiations. Close to a month after the new US administration took the reins, there still is no US trade Representative - Head of USTR - in sight, Bush heritage Peter Allgeier continuing as Acting Rep.

Farm talks head Crawford Falconer does the probably most decent thing he can do in this situation: He tries to bridge the US trade leadership vacuum by resuming his "walks in the woods":
WTO news dated February 12 2009:

Quote
Farm talks start 2009 with rounds of consultations

Chairperson Crawford Falconer told members on 12 February 2009 that he has started consulting various coalitions and individual delegations, and will continue over the next few weeks in order to find out what issues members want to discuss.
...

Ambassador Falconer uses the term “walks in the woods” to describe consultations he held in the latter part of 2008 outside the WTO. He has explained that these involve about 15 delegations, the exact numbers depending on the subject.
Unquote

With a Lake Geneva region beautifully clad in snow as hardly ever seen in decades, walking the woods surrounding Geneva will provide for a beautiful experience in nature, compensating graciously for the absence of talking trade-substance.

Indeed: Rather walks than talks in the wood.

Thanks to WEF - the path forward is now clear!

2009-02-01T20:03:00.003+01:00

A week ago, I ridiculized the capacity of the WEF to anticipate trends and developments.

I had been hoping that the facts coming out of that universal pow-wow were going to prove me wrong.

As of today, I am sorry to have to recognize that even my most modest expectations were proven wrong.

I invite you to:

Read through the summary of the outcome of this years forum (click the title below):

Global leaders urge collaboration and swift action at close of Annual Meeting in Davos

Dowload the detailed outcomes - click here

Look at a most funny webcast:

The Global Agenda for 2009: The View from Davos

I do not think there is much to add to the irrelevance
of what we have been reading and hearing ...

The season of platitudes is back, again / some WEF Davos bashing

2009-01-27T21:57:00.006+01:00

It is flabbergasting to see how many of all the intelligent people all around the globe suddenly had been anticipating the financial crisis and recession the world is going through now.

Not one among them that has not found tracks of early warnings in his texts and quotes.

Most emotional, leaving a lasting impression, is the experience of browsing through the statements of all the high-prized individuals, gathering these days in Davos, Switzerland, at the occasion of the World Economic Forum. I sincerely invite everybody to share that experience - even if it were only to find out that really only the most stupid of the subjects on this world did not see all that economic havoc coming - click the link !!!

What really goes deep, à titre d'exemple, is the statement of the managers of a so-called world-class management consulting firm: "Today's global issues require new leadership, says Booz" Listen to the statements of the two senior officials in order to get enlightened - - if you should miss the enlightening experience, do not worry, we are already two of us. In exchange, we enjoy the privilege of listening to some of the plainest of the platitudes imaginable - a kind of enlightenment, too.

The question not asked is: Why did all these high-priced individuals not bring up the looming economic crisis at their Davos gathering an year ago?

For an organization and a crowd that claims to shape the future, the world should expect slightly more than just the digestion of the past.

Obama's difficulties in naming new USTR Head do not vouch well for the Doha Round

2009-01-18T13:03:00.003+01:00

The president-elect of the US will transform to Mr. Pres a couple of days from now. Media coverage has been hysteric and is likely to increase further, given the extraordinary coincidence of matters: First president with African roots, economic crisis without precedent, regional turmoil in the Far-, Middle and Near East, you name it.

In general, Mr. Obama is praised for the choice of his cabinet. A team composed of personalities rather than one of political buddies that require a reward.
Within all this, the troubles Obama has in naming the head of USTR, the top trade policy job, pass mostly unnoticed.

Early December 08, we read:

Congressman Xavier Becerra, who has called US trade policy “broken completely” and said that he regrets having voted for the North American Free Trade Agreement, will be US President-elect Barack Obama’s choice for the country’s trade chief, media sources reported last week.
(For the full story, click on the link to ICTSD)

By mid-December, Rep. Xavier Becerra tells the editorial board of La Opinion

...that he has turned down the job of U.S. trade representative, having concluded that trade won't be the first, second, or third priority of the Obama administration ...

Next on stage: Former Dallas Mayor Ron Kirk

Ron Kirk, a lawyer and former mayor of Dallas, Texas, has been nominated to be Barack Obama’s US Trade Representative, the President-elect announced at a press conference on 19 December.

(For the full story, click the link to ICTSD)

Yesterday, January 17, the Dallas City Hall Blog, run by the dallas news tells us:

Ex-Dallas Mayor Ron Kirk not a commerce secretary candidate, aide says
(For the full story, click the Dallas City Hall link)

In short, the new US administration will start working without an operational head of its trade policy department. There are no indications whether a lame-duck Susan Schwab will continue in the job or whether the unit will have nobody at all at the helm.

Without wishing to go too far, two points are certain:

International trade policy is not on top of the priority list of the new US Pres for his first period in the job.

It is an undisputed fact that trade talk process is impossible without an operational US participation. This operational capacity got lost some time in the course of 2008. It will only be recovered once a new USTR head will be in place, his team assembled and his place won in the cabinet. Now necessarily a late-comer to the cabinet, the new USTR head will need much time and effort for even reaching an operational stage.

In short:

The WTO World in Geneva will have to continue to hibernate during a prolonged period - say end 2009 / Spring 2010

Trade diplomats and WTO employees are well advised to go on holiday, compensating all the days sacrificed along the past 7 years and building a reserve for the years to come.

High Volatility of Commodity Prices - Poison for decent Production Planning

2009-01-11T15:16:00.002+01:00

The world has been seeing record high volatility in food prices, as the following graphs show, taken from the Farm Policy Newsletter, January 8, 2009, by Keith Good:

The spike and the subsequent drop we have been experiencing are noteworthy. They are of a magnitude that exceeds anything we have been seeing in the resent past. It is moot to discuss, or perhaps a good subject for another forum, why that magnitude.

Compared to "more normal" price fluctuations, we have been seeing TSUNAMI-like shock waves. This as such is not good or bad, it is a fact. A fact however that does have uncomfortable consequences, primarily for the agricultural producer:

The mitigating effect of commodity futures contracts gets (partially) lost - futures, introduced exactly to deal with short term volatility - surrender their purpose to the magnitudes of volatility recently observed.
Planting and investment decisions are more difficult and complex than ever - compare the recently observed cycles in prices, production or investment.
Among the key drivers of this situation described above is the petroleum price - the last surviving relict of a time where prices were dictated by cartels and quasi-monopolies.

Taking a step back from the financial crisis - which in the end is a crisis of gamblers that had lost the control over their risk management - it seems to me that the fact that petroleum prices continue to be established by a monopoly-like structure may well have deep systemic effects for the world economy. Effects that may well go beyond the gasoline price at the pump station or the few GDP-Growth percentage points more ore less that can be traced to the cost of fossile fuel.

Food for Thought for a Starter for the New Year

2009-01-02T14:23:00.002+01:00

The numerous holidays one can enjoy over the X-Mas and New Year season offer us the pleasure to dig more deeply than usual into some reading. I would like to share with my visitors one particularly thought provoking text, one of the Leaders of the first print edition of Economist of the year 2009, entitled:

The oceans

A sea of troubles

For the full text, click the title and follow the link.

In essence, the article demonstrates that when it comes to the oceans, man is still behaving as hunter-gatherer, a form of living that was probably quite sustainable thousands of years ago. Today, with about 10 billion hunter-gatherers on the planet, the system has not only lost any relation to sustainability, but the process is deteriorating at such a pace that irreversible damage, meaning that recovery no longer be possible, has become a fact of life. Or, in the concluding words of the Economist's Leader:

... rising sea levels, dying corals and spreading algal blooms are only minor distractions for most people. A few more hurricanes like Katrina, a few dramatic floods in the coastal cities of the rich world, perhaps even the shutting down of a part of the world’s great conveyor belt of ocean currents, especially if it were the one that warms up western Europe: any of these would catch the attention of policymakers. The trouble is that by then it may be too late.

Year 2008: no need to remember, but a lesson to be learned

2008-12-20T16:49:00.003+01:00

What will mankind remember about year 2008:

Financial witchcraft apprentices managed to cause a major collapse
of the world financial system. This collapse then triggered a global recession that started to affect the real economy full blast
in the course of the last quarter of the year.

2009 will have told us an year from now how the
World will have managed finding the way out of this swamp.

Personally, what I lament most is the fact that once again dreams and visions were destroyed by the harsh realities of an unfair world. I do not refer to those that lost their millions thanks to Mr Madoff or thanks to Lehman Brothers - most of them do not deserve better and their losses are no real loss to the world.

I refer to all those that toil the soil and feed the world - they had been made believe, at the beginning of this year yet, that a new equity was in the process of writing

... remember all that fuss about scarce food, sky-rocketing
prices and scenarios of global shortages and mass starvation ...

Solid demand for food, feed and biomass for biofuels made the primary producers believe (alas not for the first time) that the historic, unilateral dependence of farmers and ranchers on market forces that move and change faster than their planning and production cycles had finally come to an end.

Sad enough, it took less than half the growing period of a grain crop to destroy this illusion and to deliver farmers and ranchers back into their millenia-old dependence.

What we must learn from what has happened this year is that truly equitable free trade in agricultural products - with a potentially huge harvest for everybody on the globe - will only be possible if issues such as risk management or the cycle-gap between agricultural markets and production will be addressed in parallel to the Doha Round.

With my best wishes for a Merry Christmas and a Happy New Year

No Ministerial Meeting - Fortunately - one is tempted to say

2008-12-13T19:40:00.003+01:00

On December 12, DG Pascal Lamy has recommended to the heads of the delegations od WTO Members in Geneva "... that unless there would be dramatic changes in the next 48 hours “we do not convene ministers to finalize modalities by the end of the year”...

Beyond all doubt the only possible and the only sensible decision or recommendation, that WTO's DG could formulate.
However, there needs be said more when it comes to the reasons Lamy has spelled out:

"... after a week of intensive consultations, he had not “detected the political drive” for a final push towards agreement. ... "

There are, in my view, three obvious facts that precluded any other recommendation.

1 USA

The "lame duck" syndrome is not limited to the outgoing President of the US, but reaches across the entire US administration - USTR's Susan Schwab is no exception - she cannot decide any more - period.

2 Ambition

With the so called "voluntary" Sectoral Agreements, the NAMA negotions were lifted up to another level of ambition - this level of ambition questions the very understanding of what has to be considered a "balanced outcome" - on this matter we do see some fundamental resistance between the original mandate and the way negotiations have been taking - for reasons that will be explored in one of the coming texts.

In Lamy's words, Dec 12 2008:

On sectors, the underlying issue is a different understanding of the value of the package on the table. Some understand sectorals as a top-up, a non-mandatory addition to the main package. It would be the cherry on the pie. For others, this is an essential part of the agreement, which can only be finalised if there is a guarantee of commitments. It would be the pie on the cherry. At this stage, these two positions are not reconcilable. My sense is that it would help if we could get a better collective appreciation of the value of what is on the table, and how much of the difference sectorals would make.

3 Mistrust

Last but not least, precaution and mistrust must dominate the relationship among negotiators more than ever - a bad basis for progress.

With the global recession within which we are caught, priorities of negotiators have changed. Instead of progressive trade liberalization (which would still be the best remedy to get out of the same quickly) they are now asked to preseve manouvering space for protectionist measures and, at the same time, to watch out that trading partners do not recur to such initiatives.

With the considerable space most WTO Members have between applied and bound tariffs (reffered to as water in the tariffs) there is indeed a high risk that the present WTO ruleset will suddenly permit a return to higher levels of protection rather than progress towards the vision of global free trade. In this sense, an intermediary agreement to freeze tariffs and domestic support at - say 2007 levels - could well be the most ambitious result WTO could aspire to in the short term.

Such a result would be seen within today's context:

as a true break through
as a comfortable gain of time for concluding the Round later

Revised texts get a lukewarm reception

2008-12-10T16:24:00.002+01:00

The recent updates of the negotiating texts - supposedly on track towards convergence among WTO-Members - were received with cautious reservation at best.

While negotiators, trade diplomats and observers dig deep into technicalities in order to find out where obstacles might still be hidden, there is an obvious systemic barrier that may well prove difficult to overcome in the short run.

Many governments are in the process of evaluating, deciding and implementing multi-billion (dollar / euro / swiss franc you name it) packages in favor of ailing industries (automakers, banks, ...) these packages have an at least implicit protectonist effect - it is indeed difficult to shore up domestic industries on one side while on the other (WTO Doha Round) such preferential support - in whatever form - is supposed to be lowered, to be placed under stricter rules and eventually to be eliminated.

The trade minister's families can count on Mam or Dad to be home for christmas - it is unlikley to they will be held up in Geneva forging a Doha Deal.

The draft texts are out - the high stakes were worth it!

2008-12-06T22:35:00.003+01:00

Within hours of publishing my recent post, revised drafts were issued for farm and non-farm trade talks.

Download the Agricultural Text here

Download the NAMA / Market Access Text here

At a first glance, progress from July to December looks impressive: In July, it was obvious that an overall agreement was impossible - the respective levels of maturity in the two areas - Agriculture and Market Access - were simply too far apart. Now, those levels of maturity appear to be significantly closer. Adding to this the pressure of the global financial crisis - we truly seem to be as close as never before in the Doha Round to reach an agreement on modalities.

WTO's Lamy: Director General or Professional Gambler?

2008-12-06T17:13:00.002+01:00

According to the Financial Times online edition, Dec 5, :

... Pascal Lamy, the director-general of the World Trade Organisation, will make a decision this weekend or early next week on whether to take the risk of summoning ministers to a meeting in Geneva in mid-December. ...

On the same day of Dec 5, DG Pascal Lamy has called for a meeting of the TNC - to be held on Dec 15:

... THE FOLLOWING ITEMS ARE PROPOSED FOR THE AGENDA:

1. REPORT BY CHAIRMAN

2. REPORTS BY CHAIRPERSONS OF BODIES ESTABLISHED BY THE TNC

3. ESTABLISHMENT OF MODALITIES (Footnote: CONSIDERATION OF THIS ITEM WILL BE DEPENDENT ON THE OUTCOME OF WORK OVER THE COMING DAYS)

- AGRICULTURE NEGOTIATIONS(TN/AG/W/4/REV.4)

- NAMA NEGOTIATIONS(TN/MA/W/103/REV.3)
...

Well, Lamy certainly has checked how to put under pressure his fellows chairing the key sector negotiations (Ambassadors Falconer - Agri - and Wasescha - NAMA - , respectively)

The documents to which Lamy makes reference:

- AGRICULTURE NEGOTIATIONS(TN/AG/W/4/REV.4)
- NAMA NEGOTIATIONS(TN/MA/W/103/REV.3)

1. Both these documents will be nice 100+ pagers - judging from their predecessors, Revisions 3 and 2, respectively.

2. Both these documents do not appear to exist beyound their likely present form of "drafts for confidential consultations"

No easy job to live up to the expectations raised by Lamy with his invitation ...
or: The good gambler knows how take his fellow gamblers on board when he is up to throwing in the last dice.

Export Credits are back through the financial crisis back door?

2008-11-30T11:15:00.002+01:00

OECD's Working Party on Export Credits and Credit Guarantees has come out with a strong statement:

"... pledge ongoing credit support for developing country imports"

For more on the matter, you can get an excellent overview drawn up by ICTSD.

In a WTO News item covering the "AGRICULTURE COMMITTEE 14 NOVEMBER 2000 MEETING" we find the following backgrounder:

"Export credits: implementation, negotiations and the OECD back to top

Background: Government-supported export credits are seen as a way of circumventing export subsidy commitments because interest rates and repayment terms can be easier than under normal commercial conditions. In addition to discussions in the Agriculture Committee, the question is also part of broader discussions on “implementation” in the General Council.

Article 10.2 of the Agriculture Agreement says “Members undertake to work toward the development of internationally agreed disciplines to govern the provision of export credits, export credit guarantees or insurance programmes and, after agreement on such disciplines, to provide export credits, export credit guarantees or insurance programmes only in conformity therewith.”

Negotiations on an OECD understanding on agricultural export credits, which includes Argentina as well as OECD members, were taking place in Paris at the same time as the WTO Agriculture Committee’s meeting. The current deadline in the OECD for agreement is by the end of this year. ..."

My view:

Export subsidies are among the few non-disputed issues earmarked for elimination within the present Doha Round talks.

OECD certainly explores a fine borderline between
the call for economic stimulus and
the call for export subsidies in disguise.

It appears that a trade negotiation battle assumed to be over
might well be on its way for a comeback.

What Food Crisis?

2008-11-23T11:14:00.004+01:00

"Forget oil, the new global crisis is food" - this one of the many alarming titles that dominated the headlines in early 2008, before the "Global Financial Crisis 2008" became the crisis in turn.

Should we believe the reports that can still be found on the bedside tables of many of us, then:

the world was going to starve to death within weeks
biofuels turned public enemy Number One
and so on ...

Well, it is time to take all those reports on the bedside table and throw them into the waste paper basket. Largely unnoticed by the public, the food crisis is an issue of the past and the world is back to depressed agricultural commodity prices that starve farmers rather than consumers. Pasted in, you find a self explaining graph from International Grain Council's site, showing us the price patterns for some of the more important food and feed commodities:

Even more revealing is a look at the global supply and demand situation (click the link), as calculated by the IGC :

Production again exceeds consumption
Producers have once again overreacted to the price signals from the markets
Once again, the very different elasticities of supply and demand in the markets for agricultural products are sending producers into despair.
Once again, producers will have invested heavily, anticipating higher prices, without being able to harvest those prices.

Forget about the food crisis

and, unfortunately,

get ready for the next farm crisis

Managing Globalization - Who exits the recession first?

2008-11-16T11:19:00.003+01:00

On the online edition of the International Herald Tribune I found a most read worthy text discussing our title of today -

Managing Globalization BY DANIEL ALTMAN.

The author of this blog argues the case that the developed economies will exit the present recession first, while the emerging economies will trail behind, depending on stronger demand form reinvigorated North-American, Eurozone and Japanese demands.
Daniel Altman further argues that the US will be quicker to catch the path to recovery, while Old Europe has more clean up left to do.

I think, D. Altman is partially right in his analysis. However, he misses two points:

1. The US will have generous assistance from the world
for the financing of their recovery.

- How that, some may ask -

Well, the US are the biggest or at least among the biggest debtors of the world. Lucky enough (for the US) they owe their own currency, US Dollars, to their creditors. The loads of cash (i.e. US Dollars in the US) being pumped into the system will ultimately heat up inflation. Inflation means devaluation of the currency (i.e. devaluation of the US Dollar).
It is indeed a privilege to have your international debt denominated in your own currency - there is hardly a cheaper way to reduce the substance of what you owe to others than by feeding this substance to inflation.

2. Trade will play a significant role

The economic development the world has been seeing since World War II is based, to a large extent on evolutionary progress in the global exchange of goods and services.

From GATT 47 to WTO and the Uruguay Round

The coming recovery will require another incremental step in the process of improving the efficiency of the global exchange of goods and services. There is no other option than the conclusion of the Doha Round to make this step.

Doha-Round quo vadis - short and long term

2008-11-08T17:44:00.002+01:00

With the US elections 2008 already part of history and the Democrat Party's Mr. Obama confirmed as the incoming president of the US - it is now clear that the multilateral trade diplomacy has lost whatever was left in negotiating space. Obviously, Susan Schwab's team is no longer in a position to talk with force on behalf of the US Government - everybody knowing that team and istructions will be exchanged.

This may sound as bad news, but it is not. As a matter of fact, this situation is simply irrelevant and does not alter the uninspired short term outlook that rightfully dominates the views of just about everybody.

However, one piece of positive information got lost in the avalanche of US-election coverage: We talk about the good surprise that Lamy seeks a second term as WTO Director General. This is truly good news for the long term Doha prospects. Once the selection process will be concluded by the end of May 2009 and Lamy confirmed, we can expect continuity and true progress for the second semester 2009.

Continuity in WTO Secetariat's handling of Doha Matters

Progress and Inspiration from newly elected and affirmed governments i n many parts of the WTO globe.

We should not expect anything in the short term - but prospects in the medium term have been brightening up considerably.

G-20 Meeting November 15 / Washington - Trade stuck in the sidelines

2008-11-02T20:22:00.002+01:00

As one of the last opportunities left to the US - Bush government to leave well-remembered footprint to history, George W. Jun. has called for a meeting in Washington of the major developed and developing countries, the G-20, in order to discuss the global financial crisis.

Many hope that trade and the Doha Round should play an important role at this meeting. However, it is far from clear whether trade ministers will have a say at all in this summit.

One of the nice sayings of our neighbors from across the Atlantic goes as follows:

"If it ain't broke, don't fix it."

As a matter of fact, when compared to finance, trade has been doing quite well over the recent past months, this in spite of all the financial turmoil.
Therefore, one should not expect anything for the Doha Round from the upcoming meeting. Trade ministers and their staffers are well advised to save taxpayer's money by not flying to Washington DC.

New brooms sweep clean - old brooms know the dirty corners best

2008-10-25T11:07:00.003+02:00

The Doha Round is in the process of changing the guard:

The negotiating group on market access (dubbed NAMA) has been under new chairmanship for a couple of weeks - this change alone seems to instill new life into the round. Indeed, Mr. Wasescha does bring together the plus of the new broom in the chair with the plus of the old broom in the business. - Listen to his audio statement here.

The negotiating group on agriculture is expected to shift chairmanship by year end - visibly, everybody seems to be waiting for the broom - situation best illustrated by past week's review of the Ag situation by Bridges Weekly Trade News Digest:

"WTO FARM TALKS SPUTTER INTO ACTION

Senior officials met with the chair of the WTO's agriculture committee this week to informally exchange ideas on how to reach a compromise on liberalising trade in the agriculture sector, one of the pillars of the WTO's Doha Round. The chair, Ambassador Crawford Falconer (New Zealand), has recently put a wide variety of issues on the table in an attempt to revive the negotiations, which have been stalemated since the failure of ministerial-level talks at the end of July.

Falconer will return to Wellington at the end of the year, a fact that has heightened many Members' expectations of what the outgoing chair might be able to accomplish in the next two months. ... "

Another new broom has started sweeping the route Brussels - Geneva: Incoming EU Trade Commissioner Catherine Asthon. - Click here for the EU statment on The Doha Development Agenda - Her highlights the 23 October visit to Geneva:

Highlights of Catherine Ashton’s visit to Geneva:

Meeting with WTO Director General Pascal Lamy.
Meetings with Bruce Gosper, the chairman of the WTO General Council, Luzius Wasescha, Chairman of the negotiations on Non Agricultural Market Access (NAMA), and Crawford Falconer, Chairman of the negotiations on agriculture.
Meeting with Heads of Mission of the European Union member states.

.
No broom gang is stronger than its oldest member: Visit the homepage of the US Trade Rep and you will find, among the most recent WTO related news items:

A press release on the Doha Developement agenda dated January 24 2007 - Schwab to Press for Doha Progress at the WEF
A Statement from Gretchen Hamel, USTR spokeswoman, regarding draft texts released today, dated July 17 2007

Indeed, we see one old broom that has given up, already an year ago, trying to sweep the dirty corners.

It is ovbvious that everybody is anxiously awaiting the still missing new broom - probably due early 2009.

One may ponder the question of how much sweeping is required - say useful - in the meantime.

The financial & economic crisis 2008 - the singular opportunity for the Doha Round ?

2008-10-19T11:49:00.002+02:00

A few weeks ago, we titled on this site :

The crisis of the financial system - a gloomy stage for a Doha Final

Indeed the return of government intervention and the loss of trust, across society, in the soundness of market mechanics spell trouble for a global, liberal trade accord.

However, we can focus the situation from a different angle:

The GATT was born out of need and economic distress, out of the ashes and debris left by World War II. The importance GATT's contribution to the sustained economic recovery the world has gone through since then is beyond doubt.

Every single GATT treaty and the creation of WTO took place in phases of relative economic slowdown or downturn. Even the launch of the Doha Round took place in a similar situation.

I think there are two good reasons that now strongly
favor rapid WTO / Doha progress:

One:
The global economic crisis as such.
In phases of downturn, welfare losses caused by
trade-inefficiencies weigh heavier.
Therefore, the suffering caused by short term adjustment effects
from trade reform becomes more acceptable and politically feasible.

Two:
The perhaps most important lesson the financial system crisis teaches us is the insight, that national legislation is useless for addressing
successfully global crisis.
Our globalized world needs an up to date global legal frame - be it in finance in trade (WTO) or in other areas.

G-7 - the wrong group in the wrong place

2008-10-12T11:10:00.006+02:00

The best assessment of the main reason why global decision-making has turned sour was delivered by World Bank President Robert Zoellick in his speech to the Peterson Institute for International Economics in Washington D.C. Excerpts from the Press Release: (for the full text, click)

WASHINGTON, October 6, 2008
The way the world tries to solve its economic problems needs to be rethought amid today's global crisis, including turning the Group of Seven into a Steering Group that empowers rising economic states, said World Bank Group President Robert B. Zoellick.
...
The G-7 is not working. We need a better group for a different time, Zoellick said in a speech to the Peterson Institute for International Economics in Washington D.C. For financial and economic cooperation, we should consider a new Steering Group including Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa, and the current G-7.

There is nothing much to add - except that what goes for the global economic situation is equally valid for the WTO Doha talks - it is clearly not the moment for "walks in the woods" - but for a fundamental rethinking of the mechanics of the decision-making processes needed for sustained progress in the multilateral trade negotiations arena.

Doha talks have not lacked progress because of minor issues such as Safequards or battles over percentage points - the have been failing because the process has become overly exclusive - and those claiming exclusivity are not really there where they would need to be to justify this claim.

The inelasticity of demand in food markets - or - What goes up must come down!

2008-10-05T11:03:00.003+02:00

The predictions of ever rising food prices
can still be found in the newspapers in the waste paper basket.

The launching of a new era for world agriculture,
with fundamentally higher product prices thanks to the
demand generated by demand from organic fuel production
has not even permeated through to all farmers.

In spite of all that, prices have gone down over the past few weeks even more steeply than they have risen before.

History tells us that demand for agricultural products in general is relatively inelastic - well those that thought the agrifuels will change this reality have been proven wrong.
For a good summary of the situation, go to FarmPolicy (click the link).
Once again, agricultural producers have overreacted to price signals and have crossed, once again, the thin border that separates in inelastic markets too little from too much, with lightning speed. The overall economic situation may contribute - however, it would be wrong to have it take the blame.

Two things will be interesting:

What will be the lows market prices will test in the coming months?

What will happen to consumer prices -
will they follow down as they followed up?
(the distribution and retail oligopolies will know how to prevent this)

The crisis of the financial system - a gloomy stage for a Doha Final

2008-09-30T19:38:00.004+02:00

The global financial system has been undergoing its hardest ever test - triggered by real estate lending and private credit that went out of control - in the US and maybe elsewhere. The western financial system has been destroying value at record setting pace.

One may argue that so far, the only thing destroyed is paper value - paper value in the form of (bank) shares or financial instruments no longer backed by the issuing institution (i.e. Lehman Brothers).

As a matter of fact, this may not even be completely wrong - most of the damage is still limited to "paper" and one may wonder, why the real economy, the economy of industry, production and consumption should worry.

In our global trade context:

A large number of people, trusting the advice of banks and the seriosity of institutions were led into situations of deep individual misfortune that may well have the potential to compromise the trust and belief in the sound mechanics of markets and "self"-regulation.

A lot of future consumption potential is being destroyed - this should worry us much more than the short term up and down of stock markets.

All this spells trouble for troubled Doha Round - How will economists and policy makers still convince society that a global, free trading system is superior to a government managed system depending on regulation and intervention?
This after society sees on display that:
1 - The New Zealand free trade lab experiment for agricultural products has failed
2 - The very western banking system, an antithesis to government intervention, is now eagerly reaching for the government-intervention survival kit.

The sexiness of government intervention is back - back in a way that cannot be skipped by policymakers - I am keen to see how trade negotiators in Geneva will go about the respective instructions from their political superiors / capitals.

Food Aid - Triangular Transactions - or: what could be done instead of "Monetization"

2008-09-21T22:44:00.002+02:00

In the meeting of the WTO Agricultural Committee, held on September 18, (for the summary report, click here) Thailand asked Switzerland to explain what is to be understood under the expression "Triangular Transactions" in relation to Food Aid.
Here the summarized discussion:

Triangular food aid

Thailand asked Switzerland to explain “triangular transactions from developing country to developing country”, a description included with information in Swiss food aid. Switzerland said this is when the aid provided by (1) a donor country is bought from (2) a country or area neighbouring (3) the area where the food is needed and described this as the best method. Thailand agreed.

An important question whose answer shows, how Food Aid could be used as Food Aid as such and as Development Tool - making the sourcing of food aid a development assistance effort in itself, too.

Quite the opposite situation is observed when Food Aid is monetized - which means that food provided by a donor country (i.e. a large, industrialized WTO Member) is sold in the market of the aid requiring country in order to generate cash for purchasing the food needed. Here, food aid turns a direct, non-commercial competitor of the local producer. I cannot understand, and I have argued this in many occasions on this site, how it can be possible that Monetization continues as an accepted food aid process even in the draft Agri Texts of the Doha Round.

For your easy reference, check the latest (February 2008) proposal, with square brackets, from the Agri Doha Text, par 12. of Annex L of WTO Document TN/AG/W/4/Rev.1

12. Monetization of in-kind food aid shall be [prohibited.] permissible [solely where it is necessary to fund the transportation and delivery of food aid to least-developed and net food-importing developing country Members. However, such monetization shall only be carried out within the territory of the recipient least-developed or net food-importing developing country. , Additionally, commercial displacement shall be avoided or, if not feasible, at least minimized.][to fund activities that are directly related to the delivery of the food aid to developing country recipients, or for the procurement of agricultural inputs to low-income or resource-poor producers in developing countries].

World Trade Talks between Hibernation and Gearing Up for the Next Step

2008-09-14T10:12:00.002+02:00

We observe a remarkable coincidence between global stock markets and the WTO Sentiment Index (WSI):

Both enjoy - or rather suffer from - high volatilities. While stocks have been rollercoasting up and down in excess of 10% margins a day - we have been observing similarly wide oscillations of the WSI within very short periods.

On September 11, Mr. Bauer, writing for NZZ - the leading Swiss Finance and Economics newspaper - reports:

"Doha Round at the Doorstep of Hibernation"
he then continues:
"No Consensus seems possible in Agriculture"

Here you van view fhe full article: 080911NZZHIB.pdf

On the same September 11, Laura McInnis, writing for Reuters, reports:

"Major economies are ready for another shot
at the Doha Round negotiations to clinch an accord
on freeing up global commerce,
World Trade Organisation (WTO) chief
Pascal Lamy said on Thursday."

Interesting in these two positions is the fact that both correspondents are writing out of Geneva, the WTO Headquarter - drawing their quite contradicting reports from the same pond of information. We can obviously speculate on the whereabouts of these different views:

As in the stock market - everything and nothing is possible in the course of the coming months - if you can dream it, you can do it (Walt Disney) - so it is about keeping up the dream.
People - sources of information for our correpondents - may or may not have in implicit interest in one or the other way of action: employees (or director generals) of WTO or others making a living from a busy WTO scence in Geneva are primarily interested in keeping the heat up / trade diplomats extend their negotiating stakes into the public domain / consultants and lobbyists need to show that they are worth their fees ....

In short: quoting sources, as one correspondent does, is one thing, assessing and commenting information, as the other does, is more, it is what one would expect from a correspondent.

Doha - now or never ?

2008-09-08T19:28:00.002+02:00

By coincidence, I came across an interesting piece of work written by Joe Guinan and Courtney Philips-Youman from the German Marshall Fund of the United States. I would not like to miss the opportunity to share this piece of thinking with the visitors of this site.

The summary ist pasted in below.

For downloading of the full text, click here: Guinan_Phillips_Brief_Doha_final.pdf

If Not Now, Then When?
GMF Opinion Brief
Joe Guinan and Courtney Phillips-Youman
July 2008

As ministers gather around the WTO negotiating table the week of July 21 in Geneva, there are troubling questions about whether the deal that is at hand is really worth doing and whether it is even possible to conclude an agreement at present, given the political constraints-especially those associated with a U.S. presidential election year.

This opinion brief argues that Doha skeptics are missing the critical importance of a WTO agreement in terms of imposing new disciplines and binding current practice in trade in agriculture, industrial goods, and services, and that there are large benefits to be had from an agreement on trade facilitation and from ensuring the continuing trade relevance of Aid for Trade. Waiting is not a good option, as upcoming elections around the world suggest that the political calendar for Doha will become more not less unforgiving.

When silence makes news

2008-09-03T16:23:00.003+02:00

On August 14, the New Zealand Government announced that it will recall to Wellington Crawford Falconer, NZ ambassador to WTO and Chair of the Agri negotiations of the troubled Doha Round.

At the same time, it is commented that Don Stephenson Canadian Ambassador to WTO and Chair of the Market Access Negotiations of the Doha Round, is reported to have left Geneva already, returning to his native Canada.

These news as such are of no mayor concern - these chair-functions are temporary and both had been staying on their seats for above average periods.

It however is interesting to note that WTO itself did not find it necessary to comment this information in a timely manner.

Global or Regional Free Trade - An Old Discussion revived

2008-08-31T12:11:00.002+02:00

With the struggling Doha Round, which aims the visionary goal of global free trade, the discussion of the pros and cons in respect of the proliferation of regional agreements was relaunched. In this context, I would like to pinpoint one recent publication:

Jagdish Bhagwati: Termites in the Trading System. How Preferential Agreements Undermine Free Trade. Oxford University Press, New York 2008

Reviews:

"The world's foremost trade policy scholar explains why what he calls 'preferential trade arrangements' are not a path towards global free trade, but a dangerous step away from it. A long-standing and brave opponent of these arrangements and particularly of those between hegemonic powers and developing countries, Jagdish Bhagwati explains how they promote costly trade diversion, interfere with the efficient operation of global business and allow great powers to extract unjustified concessions from weaker countries. This book underlines the abiding wisdom of non-discrimination, the now almost completely forgotten founding principle of the world trading system, and concludes that the only way to return to sanity is by movement towards free market access for all."
--Martin Wolf, Chief Economics Commentator, Financial Times

"Jagdish Bhagwati is one of the world's most distinguished economists. ...a rare academic who has the great ability to communicate his ideas to a more general audience. ...written with a light touch, with many amusing stories, examples, and effective argumentation that make it, above and beyond its policy significance, a genuine pleasure to read. ... Mr. Bhagwati's concise book of just 100 pages of text should be read by all who care about the world trading system today."--The New York Sun

"With layoffs in the auto sector and bailouts in the housing sector, exports are one of the few bright spots in the American economy. ... Begging the question: How can we sell even more? Columbia University economics professor Jagdish Bhagwati, for decades a leading international scholar on trade theory and practice, has some ideas."--New York Post
"The founding fathers of the postwar trading system wisely chose non-discrimination as its central principle. But the last fifteen years have witnessed its erosion due to the proliferation of Preferential Trading Agreements. Jagdish Bhagwati, the leading trade economist of our time, rang first the alarm bells about the resulting spaghetti bowl of discriminatory rules and regulations. Now, with his usual blend of brilliance, wit and bluntness, he describes the rise of PTAs and analyzes why it has occurred and how it threatens the multilateral trading system. This book is essential reading not only for economists and trade diplomats, but for anyone concerned with the design of the institutions that are central to our prosperity." The review by Andre Sapir, Professor of Economics, Universite Libre de Bruxelles, Former economic adviser to European Commission president Romano Prodi (2001-2004)

Comment

The author provides convincing arguments in favor of global free trade. However, one needs to keep in mind that regional agreements are relatively simple to negotiate and they furnish quantifiable results in the short term while true global free trade is a vision with a maximum of global welfare effects in the long term. Politics, thinking in election cycles, is a short term business - accordingly are the preferences of politicians:

Regional agreements are of real value which can be traded for votes.
The long term vision of maximum global welfare gains thru global free trade is worthless in the trade for votes.

Said this, one has to assume that regional agreements will continue to proliferate while, in their shadow, WTO will continue to pursue with small steps its long term vision.

Globaler oder regionaler Freihandel - ein alter Zwist neu belebt

2008-08-31T11:07:00.002+02:00

Mit dem Stolpern der Doha Runde Ende Juli, welche den freien globalen Austausch von Waren und Dienstleistungen als Fernziel und Vision hat, wurde die Diskussion zu den Pro und Kontra der Proliferation regionaler Präferenz- und Freihandelsabkommen neu lanciert. In diesem Zusammenhang sind in den letzten Tagen interessante Texte und Publikatonen veröffentlicht worden. Auf zwei davon möchte ich hier hinweisen:

Richard Senti, emeritierter Professor für Volkswirtschaftslehre an der ETH Zürich, in der NZZ vom 28. August 2008, Seite 25:

Agrarfreihandel statt Agrarfreihandelsabkommen mit der EU Autonomer Zollabbau schafft Raum für Ausnahmemöglichkeiten

Hier die Zusammenfassung der Redaktion:
Der Autor des folgenden Beitrags legt dar, warum aus seiner Sicht genereller Agrarfreihandel einem bilateralen Abkommen mit der EU im Agrar- und Lebensmittelbereich vorzuziehen wäre. Hinzu kommt, dass eine autonome Liberalisierung der Schweiz die Chance bieten würde, einzelne Produkte je nach Bedarf gezielt zu schützen. (Red.)
Hier der gesamte Text:
080828Senti.pdf

Jagdish Bhagwati: Termites in the Trading System. How Preferential Agreements Undermine Free Trade. Oxford University Press, New York 2008
Hier die Rezension in der NZZ vom 29. August, 2008:

Akute Gefahren für den globalen Freihandel
Ein Plädoyer gegen die Diskriminierung durch Handelspräferenzen
Gegen die spontane Diskriminierung von Bürgern durch andere Bürger oder Firmen unternehmen EU-Politiker alles Mögliche; Einschränkungen der Vertragsfreiheit durch Vorschriften sind für sie unproblematisch. Dass die Politik gleichzeitig durch Handelspräferenzen, regionale oder bilaterale Freihandelsabkommen, Diskriminierung festschreibt und dabei wiederum die Freiheit begrenzt, scheint fast unbemerkt zu bleiben und die Politiker kaum zu stören. In einem kurzen Buch analysiert Jagdish Bhagwati, der aus Indien stammt, aber als Ökonom vorwiegend in den USA gewirkt hat, die Gefahren, die von der zunehmenden Verdrängung des Meistbegünstigungsprinzips und der wachsenden Zahl sogenannter Freihandelsabkommen ausgehen, die immer bestimmten Handelspartnern privilegierte Marktzugänge eröffnen.
Kritik an der EU
Die 1930er Jahre waren weder für Weltwirtschaft noch für Weltpolitik eine gute Zeit. Auch damals wurde der Handel durch eine Vielzahl diskriminierender Handelsbeschränkungen belastet. Nach dem Zweiten Weltkrieg wollten die Amerikaner das vermeiden und das Meistbegünstigungsprinzip für alle Unterzeichner des Allgemeinen Zoll- und Handelsabkommens (Gatt) bzw. die Mitglieder der daraus hervorgegangenen Welthandelsorganisation (WTO) durchsetzen. Nur dieses Prinzip unterwirft alle Lieferanten den gleichen Bedingungen. Während der globale Freihandel denen, die ihn praktizieren, wie auch der globalen Wohlfahrt nützt, können Handelspräferenzen Handelsströme umlenken und dabei weniger effiziente Lieferanten gegenüber effizienteren bevorzugen. Das ist weder für die Mitglieder von regionalen oder sonstigen Freihandelszonen noch für die Weltwirtschaft optimal.

Der EU wirft Bhagwati vor, eine Art Pandemie einer Vielzahl von sogenannten Freihandelsabkommen verursacht zu haben. Diese Abkommen untergraben trotz ihrem Namen letztlich den freien Welthandel. Die EU hat mit so vielen Ländern Freihandelsabkommen geschlossen, dass (nach Bhagwati) nur noch die USA, Kanada, Australien, Neuseeland, Japan und Taiwan den «Meistbegünstigungs»-Zoll zahlen müssen. Zum Ausbruch der Pandemie haben nach Bhagwati viele Faktoren beigetragen. Da gibt es das Missverständnis, dass die diskriminierende Beseitigung von Handelshemmnissen besser sei als der Status quo. Vor allem während des Kalten Krieges gab es sicherheitspolitische Überlegungen, weshalb der handelspolitische Regionalismus gerade in Westeuropa ausbrach. Da gibt es entwicklungspolitische Überlegungen etwa zugunsten ehemaliger Kolonien europäischer Staaten.

Jedenfalls wird das globale Handelssystem zunehmend zu einem Spaghettiteller mit einer Vielzahl diskriminierender Bestimmungen. Es gibt schon über 200 derartige Abkommen; viele Länder haben mehrere davon. Für verschiedene Produkte und verschiedene Partnerländer kann es dann unterschiedlich hohe Zölle geben, die unterschiedlich schnell gesenkt werden sollen. Weil bei internationaler Arbeitsteilung nicht immer klar ist, welches Land wie viel an der Produktion mitgewirkt hat, gibt es komplizierte Herkunftslandregeln, die sich von Abkommen zu Abkommen und von Produkt zu Produkt unterscheiden können. Dieser Spaghettiteller dürfte - wie Bhagwati hervorhebt - vor allem Entwicklungsländern, aber auch dem Mittelstand wenig bekömmlich sein.
Die Anreize der Starken
Für wirtschaftlich Starke wie die USA oder die EU sieht Bhagwati allerdings einen Vorteil: In bilateralen Abkommen mit kleinen und armen Ländern können Hegemonialmächte eigene Interessen durchsetzen; von Arbeitsmarktregeln über den Schutz geistigen Eigentums bis zu Umweltauflagen. Das hat mit Freihandel wenig zu tun und wäre global auch meist nicht durchsetzbar. Bhagwati sieht nur einen Weg, um das Chaos diskriminierender Präferenzen zu überwinden, nämlich durch den globalen Abbau von Zöllen und anderen Handelshemmnissen. Bhagwati, einer der besten Aussenhandels-Theoretiker, entwickelt die Argumente auf hundert gut lesbaren Seiten. Problematischer ist der kurze Anhang, er enthält kommentierte Literaturhinweise für Fachleute. Aber das sollte kein Grund sein, den Haupttext nicht zu lesen. Der gehört zur ökonomischen und weltpolitischen Allgemeinbildung.

Erich Weede

Kommentar

Beide Autoren liefern überzeugende Argumente zu Gunsten der langfristigen Unersetzlichkeit eines echten globalen Freihandels. Sie kritisieren das Rosinen picken der Präferenz- und regionalen Freihandelsabkommen. Sie weisen darauf hin, dass letztendlich allein die Kosten der Administration eines "Spagettitellers" (Bhawati) von Regional- und Präferenzabkommen schwerer wiegen werden als deren handelsseitige Wohlfahrtseffekte.

Aus meiner Sicht muss man im Auge behalten, dass Regionale und Freihandelsabkommen relativ einfach verhandelbar sind und kurzfristig quantifizierbare Ergebnisse liefern, während globaler Freihandel im Rahmen der WTO eine langfristige Vision mit ähnlich langfristigen Wohlfahrtseffekten darstellt.

Die Politik, denkend in Wahlzyklen, ist ein kurzfristiges "Geschäft" und entsprechend sind auch die Präferenzen der Politiker:

Regionale Freihandels- und Präferenzabkommen kann man den Wählern verkaufen, die langfristige Vision des maximalen, globalen Wohlfahrtsgewinns durch freien globalen Warenaustausch ist im Kampf um Wählerstimmen dagegen wertlos.

Damit ist davon auszugehen, dass bis auf weiteres fleissig mit Regionalabkommen Politik gemacht und Wähler befriedigt werden, im Schatten dieser Regionalabkommen wird die WTO unverdrossen mit kleinen Schritten die langfristige Vision verfolgen.

Doha Round - where should the ice be broken?

2008-08-24T16:52:00.002+02:00

On August 13, the WTO News Service quotes DG Lamy as follows:

quote

Negotiations can find compromise on the safeguards issue — Lamy

Director-General Pascal Lamy, in his remarks on the second day of the “Global Partnership for Development” conference in New Delhi on 13 August 2008, said that the Doha Round should not collapse over the issue of the special safeguard mechanism in agriculture for developing countries. “A fine balance is required and the search for this fine balance requires that our negotiating resources continue at work,” he added. (for the full text, click here)

unquote

The efforts of Pascal Lamy in trying to keep the momentum that was gathered in the July Mini-Ministerial meeting are certainly the right thing to do. Doing this, he keeps the heat up, keeps the Doha Round as an unresolved issue alive in the public discussion and maintains the pressure on WTO Members.

However, he is wrong in trying to break the ice along the fault line (safeguard issue) that served as scapegoat for the July failure. The question to resolve now is procedural and has little to do with substance.
The Doha Round does not need, in order to proceed, compromise on the safeguard or other agricultural issues. What the Round needs is the balancing of the different subjects under negotiation. This means primarily more progress in NAMA and in SERVICES negotiations so as to open the door for a truly balanced result based on comparable levels of maturity of the draft texts.

If someone where in the position to counsel Lamy, then this piece of advice would be well placed.

The Doha desert dust has settled - we now see clearer

2008-08-19T19:21:00.004+02:00

On August 11 and 12, respectively, the Chairs of the "Committee on Agriculture
Special Session" and the "Negotiating Group on Market Access" circulated their "July Package" reports - click links in order to download full reports.

These reports were circulated with quite some delay - indeed intentionally - and after the strongest emotions of the visible heads (like Lamy) had passed. In that sense, both reports give quite an objective and unpassionate image of the situation in the key areas under negotiation.

Both reports are carefully worded and go to great lengths to keep all doors open. It is however remarkable to sense the fundamental difference that exists between the two documents.

The agricultural text, while cautiously worded, gives evidence of a negotiation that had well progressed and where agreement - assuming consensus in other areas was achieved (nothing is agreed until everything is agreed) - was imminent.

A stark difference when reading through the Market Access text: An equally carefully worded text full of doubts and problems.

I strongly invite everybody to read through both texts. Do not miss the remarks at the beginning of the texts - to me, those are most revealing.

In short, we see a nice affirmation of our analysis dated August 8 and published on this site:

The root cause of the breakdown of the Doha process is the difference in maturity of the issues under negotiation. In order to progress, levels of maturity need be aligned, first, then horizontal negotiations can resume. Repeated from the text written 10 days ago:

The impact of national politics (elections in the US, changes in the EU commission, elections in India etc) is grossly overestimated negotiations can well move ahead separately - I do not think that the trade talks will move to hibernation mode.

Nobody wants to throw over board progress achieved - business will continue where it was left on July 30 - albeit with different priorities.

Listening around, one may claim that the different matters under negotiation in the respective groups and bodies, reached estimated conclusion ratios of:

90% for Agriculture
50% or less for Market Access - NAMA
little progress in Geographical Indications / TRIPS and Implementation
Services: value of Market Access offers in the making - if any: difficult to assess
WTO Rules -/- Implementation -/- DSU -/- Environment -/- S&DT: seem to be irrelevant within the entire picture when compared to the main issues.

Accepting that the assessment made right above is not fully and completely wrong and out of place, priorities for the coming negotiation period seem rather clear:

1 Bring NAMA, TRIPS/GI and Services at level with Agriculture

2 Then return to the horizontal process

3 Forget about the irrelevant matters

Doha Round: Ready for a jump start after the failed July package?

2008-08-08T16:37:00.005+02:00

In the coming days trade negotiators and the folks in general that deal with international trade issues will start to resurface, again. Judging from the daily number of Hits and Visits to this site, that fell by more than 50% in the first week of August as compared to the July figures, fatigue and agony must have dominated the scene from July 30 onwards. Most folks will start to recover in the course of the coming weeks and - inevitably - the question of how to move on will be raised impatiently.

I think the following elements will guide to a large extent the developments to come in the course of the coming months:

The impact of national politics (elections in the US, changes in the EU commission, elections in India etc) is grossly overestimated negotiations can well move ahead separately - I do not think that the trade talks will move to hibernation mode.

Nobody wants to throw over board progress achieved - business will continue where it was left on July 30 - albeit with different priorities.

Listening around, one may claim that the different matters under negotiation in the respective groups and bodies, reached estimated conclusion ratios of:

90% for Agriculture
50% or less for Market Access - NAMA
little progress in Geographical Indications / TRIPS and Implementation
Services: value of Market Access offers in the making - if any: difficult to assess
WTO Rules -/- Implementation -/- DSU -/- Environment -/- S&DT: seem to be irrelevant within the entire picture when compared to the main issues.

Analysis of a failure - or: better a terrible end than terror without end!

2008-07-30T18:48:00.003+02:00

On July 29, the collapse of the July 08 Mini-Ministerial was acknowledged and with this the stand still - probably for the coming 12 to 18 months to come - of the Doha Round. While the official WTO communication goes straight to the scapegoat argument, in WTO DG Lamy's words:

“we were close to finalizing modalities in agriculture and non-agriculture market access...but we were not able to find convergence in the area of Special Safeguard Mechanism” (click for full text)

The global press already makes a more subtle assessment - in the words of the International Herald Tribune:

"GENEVA : World trade talks collapsed here on Tuesday after seven years of on-again, off-again negotiations, in the latest sign of India's and China's growing might on the world stage and the decreasing ability of the United States to impose its will globally. ..." (click for the full iht.com text)

The follow up text on IHT online: "Trade talks broke down after Chinese shift on food"

For a full factual picture of the shown down, you best go Bridges Daily Update, Issue 10 BRIDGES%20Daily%20Update%2C%20Issue%2010.pdf - click the link - issued by ICTSD.

A few random thoughts:

That the collapse can be attributed by Members to the comparatively minor issue of the SSM (Special Safeguard Measure) is either pure luck or it is a diplomatic masterpiece. In the end, this minor scapegoat allowed many significant Members to exit the arena without having to stand up to their real challenges - such as cotton subsidies for the US, lack of balance between Agri and NAMA for the EU, or the virtual absence of progress in the other issues under negotiation (i.e. Services). In the end, what we see is a face-saving exit for the Members - face-saving enough so that a return to the negotiation table is not excluded.

If we dig deeper, then we may come across other thoughts:

Was the Doha Round overloaded - i.e. Development?

Did Doha rise expectations that were, from the outset impossible to be met?

Has the system of the comprehensive, all encompassing mandate failed?

How should it be possible to negotiate across agreements that are so differently structured as the one that covers Goods ond the other that covers Services?

In each of these (and many other) questions, we may find a a grain or two of truth.

In the end, what has been happening these past few days is far more an opportunity than a failure, provided the Doha lessons are learned:

The principle of "single undertaking" has become too complex a mandate (or part of).

Reduce the complexity - why not envisage self-standing individual sector negotiations (i.e. Market Access, Services, Agriculture ...) - the loss of trade-off potential will be more than offset by straight forward structures of the issues under negotiation.

Trade is a strong driver for development - what got forgotten when the Doha Trade Round was dubbed Development Round was the fact that first you need something you can trade before you can generate welfare and development from trade. The key challenge for most LDc's (with rare exceptions, such as cotton fiber from West-and Central Africa - from the C-4) is to identify such goods (or services) and to deliver and trade those. WTO is not a development organization - not in the strict sense of the word - it should therefore refrain from taking development commitments which it cannot honor in the end.

Doha Round - July package: We can't see the forest for the trees!

2008-07-28T18:53:00.003+02:00

One can't see the forest for the trees

This popular saying summarizes in the shortest possible form situation and developments of the Mini-Ministerial meeting (some 30 -odd trade ministers attending) now under progress in Geneva.

Ministers, over the weekend of July 26 and 27 had been looking at a few "Trees" (i.e. NAMA and Agriculture) - this Ministerial look at a few beautiful trees led WTO DG Lamy to report as follows:

WTO Director-General Pascal Lamy told WTO members on 28 July 2008 that talks over the past few days have produced “a very high level of convergence on many issues” and these would be included in revised agriculture and industrial products texts to be circulated later in the day.

By now, Members and their trade diplomats will probably take a step back and start looking at the "Forest" (the Doha Development Agenda). The will have to realize that:

A the overall balance (including Services, and other issues) got lost under way

B the balance between NAMA and Agriculture looks more elusive than ever

C probably most significant: The so-called July package cannot meet the expectation linked to "Development": if anything, the Doha Round is a Round for Emerging Economies.
Industrialized and post-industry economies are suggested to foot the bill with significant Agricultural concessions in exchange for meager NAMA movements
LDCs got lost on the way. If anything, they can enjoy eroded preferential market access to the EU and US markets (the issue of market access for LDCs is a wicked question which will merit some more thought)

WTO Doha Round: square brackets - a nice indicator

2008-07-12T15:59:00.003+02:00

All matters where negotiators so far had not been able to agree on a common text are in square brackets [ .... ]. The brackets then either show the area of disagreement - i.e. [(60) (75)] percent - or simply contain empty space for the cases where negotiators presumably have not yet been able to narrow down the levels of disagreement down to decently separated alternatives.

For all those who are keen to assess on their own the state of the Doha Round at the dawn of the final (?) call, go to the WTO site, download the recent, July 10, drafts for Agriculture (Ag text) and for Market Access (NAMA text). Choose pdf for easy subsequent handling.

Open the 2 documents in your Acrobat Reader / even easier with Preview for Mac Users - go the the Search tool of the application, enter a left square bracket [ and run the search in both documents.
The search result will give you the number of brackets (= the number of issues that still need be resolved) together with the text fragment that reflects the area of disagreement.

The exercise is revealing:
The Ag text enters the final lap with 17 square bracket pairs. Within most of them, the divergent positions look quite close. In my view, there are only few exceptions that pose real challenges: i.e. AVE (ad valorem equivalents of specific tariffs) or the question of the base period for the reduction of the US domestic support to farmers.

The NAMA text joins the final act with an impressive load of 159 square bracket pairs. Moreover, comparing with agriculture, it is much more difficult to assess the real divergence, many brackets are empty or contain only one number (which obviously is being contested.

Conclusion
The trade ministers will be required to negotiate trade offs between NAMA and Agriculture. The two sectors have reached completely different stages of maturity - it will remain the secret of the ministers how they intend to proceed. My best guess for a reasonable outcome of this July meeting, in WTO-diplomatic speak, will be as follows:

Ministers have taken note of the substantial progress that has been achieved in the agricultural negotiations; they acknowledge that, in spite of a lot of hard work put into narrowing the positions in NAMA, there still remains considerable work to be done for moving closer to a acceptable result in the Market Access negotiations .... negotiations will resume once the new US presidency / administration will have started .... a Ministerial Conference is to be scheduled for December 2009.

In a few days, we will see.

F F F / Food - Feed - Fuel - the real issues

2008-07-06T21:06:00.004+02:00

On July 3 2008, Pascal Lamy, WTO Director General made public on www.iht.com "A memorandum to the world's trade ministers".

He (Lamy) concludes this memo as follows:

I believe the chances of reaching agreement this month are better than 50 percent. If I did not believe this, I would not have asked you to come. But success is not guaranteed and I must tell you that an inability to reach accord by the end of the month means our chances for success in the Doha Round would be much less than 50 percent. Agreement is within our reach, but all of us will have a stretch a bit to get there.

One simple thing is remarkable: For the first time, Lamy sends out a message of "now or never" - "now or forget the Doha Round".

He is probably right:

1. The world economy is on a downturn - most trade agreements were concluded under the pressure to create additional welfare from trade. For the past eight years, the global economic pressure has not been as stringent as right now.

2. French Pres Sarkozy has openly spoken up against a Doha Deal - taking charge of the EU presidency for the second semester it is now (before him really gripping the reins) or later, in 2009, with the next EU presidency - but then, there will be Mr. Obama in charge in the US ...

So, there are some good reasons to think that in fact the last Doha dice is rolling - which indeed does not mean that the last WTO dice was thrown.

Personally, I maintain my long-standing view, that a honest closing of the Doha Round would be best for WTO - WTO could then start to look at real issues - such as the global shortage of agricultural produce needed for food, feed and fuel.

Mini-Ministerial / Mini Ministertreffen - eine Ergänzung

2008-06-29T16:05:00.003+02:00

Vor einigen Tagen habe ich hier über die geplante "Mini-Ministerkonferenz" geschrieben. Nachträglich habe ich festgestellt, dass ich ein wichtiges Stück Hintergrundinformation nicht mitgeliefert habe:

Eine Mini-Ministerkonferenz - WTO Sprache für ein Treffen der Handelsminister ausgewählter Mitgliedstaaten - hat keine Entscheidungskompetenz. In diesem Sinne ist es wesentlich die Rolle und Aufgabe einer solchen Konferenz zu verstehen.
Eine Mini-Ministerkonferenz wird einberufen, wenn nichts konsensfähiges für das umfassende Plenum auf dem Tisch liegt und man sich von ersterer erhofft, einer blockierten Situation neue Ideen einzuflössen.

Es ist wichtig, dies in Bezug zu setzen zum Anspruch, dass ein Abschluss noch in diesem Jahr möglich ist.

Für die Leser aus der Schweiz: Als Illustration dieser Kommentare mag gelten, dass soeben publik wurde, dass der Bundesrat bis auf weiteres auf eine Erweiterung des WTO-Doha Mandats verzichtet, eine Erweiterung, die noch vor kurzem vom seco Chef Gerber gefordert wurde.

Quote aus der NZZ am Sonntag vom 29.6.2008:

WTO: Mandat für Verhandlung bleibt unverändert

Volkswirtschaftsministerin Doris Leuthard verzichtet derzeit darauf, das Verhandlungsmandat für die Dauha-Runde der WTO auszudehnen. Dies bestätigt eine zuverlässige Quelle: «Man ist gewillt, so lange wie möglich für die bisherige Position der Schweiz zu kämpfen.» Sollte sich in der nächsten Verhandlungsrunde zeigen, dass sich diese Position nicht halten lässt, soll der Bundesrat kurzfristig über eine Anpassung des Mandats entscheiden. Leuthards Mediensprecher Christophe Hans bestätigt derweil nur, dass Leuthard den Bundesrat am Mittwoch über den Stand der Dinge informiert hat.
Im Mai hatte ihr Departement noch angekündigt, man werde das Mandat anpassen und höhere Einbussen für die Bauern in Kauf nehmen müssen. «Ich bin froh, dass man derzeit davon absieht», sagt der Direktor des Bauernverbands und FDP-Nationalrat Jacques Bourgeois auf Anfrage. (gmü.)

unquote

English text - Mini-Ministerial - something about WTO-speak

A few days ago, I wrote about the mini-ministerial conference scheduled for July. In hindsight, think I forgot to put into context what a mini-ministerial conference stands for:

In WTO-speak, mini-ministerial stands for a gathering of trade ministers of selected, usually "important" Members.
This conference cannot adopt decisions - for the simple lack of quoroum.
A mini-ministerial is typically called for and scheduled when there are no consensus - based decisions ready for adoption and when new impetus is needed for a blocked situation.

It is important to set this in relation to the ambition to conclude the Round within this year.

A mini-Ministerial Conference in July - and nobody seems to care

2008-06-26T21:02:00.002+02:00

Quote Bridges:

LAMY CALLS FOR MINI-MINISTERIAL FROM 21 JULY

Ministers from key trading nations appear set to gather in Geneva from 21 July in an attempt to reach a deal in the troubled Doha Round of global trade talks, which face an additional multi-year delay if an accord is not salvaged soon.

WTO Director-General Pascal Lamy called for the ministerial meeting during a 25 June 'green room' session with ambassadors from about 30 countries. He told them that chances for an agreement on agriculture and industrial goods trade at the end of July were "better than 50 percent," but would diminish after that, according to sources. ...

Unquote

There is nothing spectacular about this call for a Ministerial Conference - lest one difference to previous settings: For as much as my memory goes, no such conference has attracted less public attention (i.e. in the media) than this present attempt to bring trade ministers together in yet another attempt to forge a deal. While this lack of public interest is not negative per se, it does signal us that the Doha Round has lost its "sex appeal". The reasons may be many. I suspect, that this lack of public interest is due to a wide spread view, that the Doha round no longer deals with matters that are relevant to todays' global challenges - if this were true, then the Doha Mandate would require some serious debate among ministers.

Ernährungssouveränität - mehr als alter Wein in neuen Schläuchen!

2008-06-15T10:18:00.003+02:00

Der Begriff der Ernährungssouveränität war bis vor kurzem vor allem im Argumentarium von kleinen, eher extremistisch angehauchten Organisationen und politischen Gruppierungen zu finden - siehe die ausführliche Doku unter dem link.

Im Gefolge der Preiserholungen auf den globalen Märkten für Nahrungsmittel ist der Begriff "Ernährungssouveränität" politisch salonfähig geworden - siehe als gutes Beispiel das Interview mit Prof. Mathias Binswanger - Schweizer Bauer in der Ausgabe vom 10.5.2008 / lid Roland Wyss - unter dem Titel: "Wichtig ist die Ernährungssouveränität".

Die Forderung nach Ernährungssouveränität ist nicht neu: Die Schweiz versuchte diese während des 2. Weltkrieges mit dem Plan Wahlen soweit wie möglich zu realisieren - unter dem Stichwort "Selbstversorgung" blieb diese bis gegen Ende des letzten Jahrtausends einer der Pfeiler der schweizerischen Agrarpolitik.
Das Konzept der "multifunktionalen Landwirtschaft", im Gefolge der WTO Uruguay Runde entstanden - ist erst vor rund 15 Jahren an die Stelle der Selbstversorgung getreten.

Der Forderung nach Ernährungssouveränität diametral entgegen stehen die Prinzipien, die dem Agrardossier in der WTO-Doha Runde zu Grunde liegen.

Interessanterweise sind es ausgerechnet am Agrarfreihandel interessierte Staaten (z.B. Argentinien, Thailand), welche durch Exportbeschränkungen die besten Argumente zu Gunsten des Prinzips der Ernährungssouveränität liefern.

Die breite Rückkehr des Begriffs "Ernährungssouveränität" ins handelspolitische Vokabularium von Regierungen, etablierten Parteien und Organisationen wird den weiteren Verlauf der WTO-Doha Runde ganz enscheidend beeinflussen.

Soaring food prices - good or evil ?

2008-06-04T18:44:00.002+02:00

Politicians, NGOs, Development Agencies concerned Citizens - everybody has and makes public his views on the causes, the effects and the what to dos of the high global food prices.

Joachim von Braun from the International Food Policy Research Institute has produced a very well reflected piece of analysis and recommendations for action "Global Response Needed to Rising Food Prices".

In contrast, from the speech of the Director General of the FAO at the occasion of the Rome Summit, while very passionate and loaded with painful but true pictures and comparisons, what will stay in the ears of the public will unfortunately be the well known call for more money. History tells us that money alone - in particular if money is spent on food aid - may well be worse than nothing.

I miss in all the discussions about the short global food stocks and the rising prices some very basic facts:

Demand for food and feed has been rising primarily due to impressive development and welfare progress in many emerging economies - available money for replacing rice and cereals with meat in the diet implies four to eight fold increase demand for grains.
Grain production and the respective markets need to adjust to the new situation - this adjustment progress is well under way.
Prices for agricultural products had reached, in real terms, historic lows, what we see now are not soaring prices; what we see is a return to reasonable food prices.
The impact on grain demand from the biofuel industry seems to me grossly overstated by many sources.
Last but not least: The old truth of the supply / demand behavior remains true: Rising prices increase supply - After decades, more than only the farmers in the most favored production regions of the world can expect to make a decent living from selling their produce - we can trust them to react accordingly. In that sense, the food prices we observe are a blessing in disguise.

Said this, it is undisputed that regional food crisis situations, which by the way are typically caused rather by poverty than by lack of supply, need be relieved with appropriate emergency measures - see the article by J. von Braun.

Doha Runde: Die Optionen im "horizontalen Prozess"

2008-05-27T16:01:00.003+02:00

In der Zwischenzeit hat auch der Vorsitzende des Doha-Runde Verhandlungsdossiers Dienstleistungen seinen Bericht - als Grundlage für einen Abschluss der Runde - publik gemacht.

Damit sind nun, zusammen mit den Texten des Agrardossiers und des Dossiers Marktzugang für Industriegüter, 3 der wesentlichen Texte auf dem Tisch, die als Grundlage für den so genannten "horizontalen Prozess" dienen. Dieser horizontale Prozess ist der auf die Sektorverhandlungen folgende Interessenabgleich zwischen den WTO-Mitgliedern quer durch die zur Verhandlung stehenden Themen.

Wo stehen wir am Start dieses horizontalen Prozesses:
Im Agrardossier sehenn wir ein relativ konkretes, in mehreren Bereichen ambitiöses Zwischenresultat, welches den Erwartungen der Agrarexporteure weit entgegen kommt und eine Reihe anderer Mitglieder mit anspruchsvollen und heiklen internen Reformverpflichtungen konfrontiert.

In den Dossiers Marktzugang für Industriegüter bzw. Dienstleistungen sehen wir, im Vergleich zum Agrardossier, bescheidene Fortschritte in der Reduktion hoher Zölle sowie den Ausdruck guten Willens, etwas zu tun. Dazu kommen einige bescheidene Fortschritte, vor allem im bilateralen Bereich, im Marktzugang für grenzüberschreitende Dienstleistungen.

Was heisst das für die Unterhändler und Handelsminister an der Pforte zum "horizontalen Prozess":

Das einigermassen konkrete und ambitiöse Ergebnis im Agrarbereich geht vor allem zu Gunsten folgender "Gewinner": Einige Schwellenländer und Agrarexporteure (Brasilien, Argentinien, Australien, Neuseeland ... und zu Lasten folgender "Verlierer": Europa, Nahrungsmikttelimporteure in Asien und Afrika.

In Dossiers Marktzuzgang für Industriegüter bzw. Dienstleistungen sind die "Verlierer" vor allem die Industrieländer. Selbst bescheidene Marktzugangserwartungen wurden eher noch unterboten. "Gewinner" sind die Entwicklungs- und vor allem die Schwellenländer, welche mit flexiblen Formeln und langen Übergangsfristen relativ gut leben können.

Kurz gesagt: Kosten und Nutzen scheinen eher einseitg verteilt zu sein. Der Optionen scheinen wenige:

die "entwickelten Länder" akzeptieren das einseitige Resultat, dann ist ein Abschluss möglich;
die Schwellenländer bewegen sich noch massiv im Bereich Marktzutritt für Industriegüter bzw. Dienstleistungen, dann ist ein ausgewogenes Ergebnis möglich;
das Ganze versandet.

In meiner Beurteilung sind nur die Optionen 1 und 3 realistisch, da die Schwellenländer, mit den inzwischen sehr hohen Agrarpreisen, kaum zusätzlichen Nutzen aus einem Doha-Abschluss erwarten könnten - wieso für etwas, das man nicht benötigt, bezahlen? Es bleibt das winkelriedhafte Vorausgehen der Industrieländer (Option 1), geknüpft an die Hoffnung, dass andere freiwillig folgen, bzw. Option 3, die späte Einsicht, dass keine kompromissfähige Lösung greifbar ist. Im letzteren Fall wäre es dann nötig, konsequent zu sein und Verhandlungen zumindest temporär zu sistieren.

Doha Runde - Quo vadis - oder was ist Sache ?

2008-05-18T11:11:00.002+02:00

Vor einer Woche haben wir an dieser Stelle dem seco-Chef leichtfertigen Umgang mit den Doha-Runde Fakten vorgeworfen. Zur Illustration finden Sie hier einen Artikel aus der NZZ vom 17. Mai, welcher die Situation sehr viel differenzierter beleuchtet, obschon ironischerweise die Quellen für diesen Artikel sicher zu einem guten Teil im von Herr Gerber geführten seco liegen. Was mich natürlich freut ist, dass die hier folgende Faktenlage und Argumentation, mit Ausnahme der reisserischen Titel, meine seit Monaten vorgelegten Argumente weit gehend bestätigt.

Quote Neue Zürcher Zeitung, 17. Mai, 2008, Seite 23

Die Schweiz muss die Landwirtschaft liberalisieren
Bei internationalen Verhandlungen werden nicht selten Fristen für den Abschluss der Beratungen gesetzt. Man tut dies in der Erwartung, dass sich die Kompromissbereitschaft der Beteiligten erhöht, wenn sie unter Zeitdruck stehen. Bei den seit 2001 laufenden Welthandelsgesprächen im Rahmen der Welthandelsorganisation (WTO) hat sich diese Methode bisher nicht bewährt; «deadlines» gab es bereits zuhauf, und sie wurden immer wieder über Bord geworfen. Nun aber soll mit allen Mitteln versucht werden, die sogenannte Dauha-Runde zur Liberalisierung des Welthandels bis Ende Jahr abzuschliessen. Völlig unrealistisch ist diese Zielsetzung nicht, denn spätestens seit Februar scheint Bewegung in die Verhandlungen gekommen zu sein.
ÖFNUNG STATT ABSCHOTTUNG

Mit einem Handschlag zwischen den 152 Mitgliedstaaten der WTO noch in diesem Jahr würde endlich durch Taten bekräftigt, dass man den Herausforderungen der Globalisierung nicht mit Protektionismus und Abschottung begegnen will, sondern mit möglichst freiem Handel nach klaren Spielregeln. Gerade in Zeiten einer sich abkühlenden Weltwirtschaft, gefährdeter Stabilität der Finanzmärkte wegen der amerikanischen Immobilienkrise und steigender Nahrungsmittelpreise käme ein rascher Abschluss in Genf gewissermassen einer systemstützenden Massnahme auf globaler Ebene gleich.

Und wenn sich der verhaltene Optimismus als trügerisch erweisen und die Dauha-Runde letztlich sogar versanden sollte? Dramatisch wäre ein solcher Gang der Dinge für die Entwicklung des Welthandels vermutlich insofern nicht, als die grosse Mehrheit der WTO-Mitgliedstaaten bereits «vorgesorgt» hat. Über bilaterale und regionale Freihandelsabkommen versuchen alle relevanten Handelsnationen, ihre Markt- bzw. Wachstumschancen zu nutzen, die sich aus dem freien Handel ergeben. Mittlerweile existiert ein fast den ganzen Erdball umspannendes Netz von solchen Arrangements. Im Gegensatz zu multilateralen Lösungen führen sie allerdings zu Handelsumlenkungen oder gar -diskriminierungen gegenüber Drittstaaten. Ausserdem finden manche Entwicklungsländer mangels Attraktivität keine Freihandelspartner; sie drohen daher die grossen Verlierer zu werden, falls die Welthandelsrunde scheitert.
FORDERNDE DRITTE WELT

Nicht von ungefähr sucht man in der Dauha-Runde besonders die Lage der Entwicklungsländer zu verbessern. Bei der Erteilung des Verhandlungsmandats an der WTO-Ministerkonferenz von Mitte November 2001 in Katar war das freilich noch nicht absehbar; im Text selbst findet sich jedenfalls kein Beleg dafür. Doch schon kurze Zeit später wurde die Dauha-Runde kurzerhand zur «Entwicklungs-Agenda» erklärt. Was das heisst, präzisierten die Teilnehmer der WTO-Ministerkonferenz von Hongkong vier Jahre später. In ihrer Abschlusserklärung schrieben sie: «We recognize that it is important to advance the development objectives of this Round through enhanced market access for developing countries in both Agriculture and NAMA». Nama ist der WTO-Buchstabensalat für Marktzugang im Bereich der gewerblichen Güter.

Die Entwicklungs- und Schwellenländer interpretieren allerdings diese Textpassage sehr extensiv, denn am Verhandlungstisch fordern sie von den entwickelten Volkswirtschaften viel, vor allem mit Blick auf das Agrardossier, ohne selbst Substanzielles punkto Marktöffnung für gewerbliche Güter anzubieten. Und sie tun es dank Schützenhilfe grosser westlicher Agrarexporteure wie der USA, Australien und Neuseeland mit beachtlichem Erfolg. Davon zeugt der im Februar vorgelegte Entwurf eines Kompromisses des zuständigen Verhandlungsvorsitzenden, des Neuseeländers Crawford Falconer. Das Papier ist inzwischen von ihm überarbeitet worden und wird nun den WTO-Mitgliedstaaten zur näheren Prüfung vorgelegt. Es verlangt den Agrarprotektionisten unter den westlichen Industriestaaten - im Wesentlichen das EU-Lager und die von der Schweiz angeführte sogenannte G-10 - einen gewaltigen Dreisprung ab, wenn die Dauha-Runde zu einem guten Ende gebracht werden soll: Beseitigung der Exportsubventionen, kräftiger Abbau der Schutzzäune bzw. Zölle an der Grenze und massvollere interne Stützung der Landwirtschaft.
DIE SCHWEIZ UNTER DRUCK

Die Schweiz, die ihre Landwirtschaft wie kaum ein anderes Land über teilweise extrem hohe Zölle vor ausländischer Konkurrenz schützt, hat den Ernst der Lage - oder positiv formuliert: die Chance für einen baldigen Durchbruch bei der WTO - erkannt. Das zeigt sich daran, dass der Bundesrat nolens volens dabei ist, das restriktive Verhandlungsmandat für seine Unterhändler in Genf zu revidieren. Will er nämlich verhindern, dass die Schweiz vom weiteren Dauha-Verhandlungsprozess ausgeschlossen wird, bleibt ihm nichts anderes übrig, als im Schlepptau der EU eine Liberalisierung des Agrarhandels zu akzeptieren, die weit über das ursprüngliche Angebot hinausgeht. Selbst wenn es gelingen sollte, über die Modalitäten, zum Beispiel im Bereich der «sensitiven» (schutzwürdigen) Produkte, den Liberalisierungsschock etwas abzufedern: Die Schweiz wird um eine substanzielle Öffnung nicht herumkommen. Gleichzeitig werden sich die EU und die G-10, die sich beide von Anfang an für eine umfassende Welthandelsrunde engagiert haben, in den übrigen Verhandlungsbereichen, vom Marktzugang für gewerbliche Güter über die Liberalisierung grenzüberschreitender Dienstleistungen bis hin zur Stärkung des WTO-Regelwerks, mit weit weniger ehrgeizigen Ergebnissen begnügen müssen, als sie zunächst erhofft hatten. Aus ihrer Warte wird daher das Verhandlungsergebnis, sofern es zu einem solchen kommt, alles andere als attraktiv sein. Das ist aufgrund des bisherigen Gangs der Verhandlungen keine riskante Prognose.
VERÄNDERTES MACHTGEFÜGE

Riskant wäre hingegen eine zeitliche Prognose für den Abschluss der Dauha-Runde. Immerhin dürfte sich schon bald klären, ob eine Einigung im laufenden Jahr wahrscheinlich ist, denn in den kommenden Tagen und Wochen muss sich weisen, inwieweit der überarbeitete Text von Falconer als Basis eines tragfähigen Kompromisses für die Liberalisierung des Agrarhandels dienen kann. Eins ist allerdings sicher: Mit dem Agrardossier steht und fällt die Dauha-Runde. Es sind mit anderen Worten die Schwellen- und Entwicklungsländer, die mit ihrem Insistieren in diesem Bereich der Dauha-Runde den Stempel aufdrücken. In allen vorangegangenen Welthandelsrunden schrieben die westlichen Industriestaaten das Drehbuch.

Die neue handelspolitische Realität spiegelt eindrücklich die mittlerweile eingetretenen Verschiebungen im weltwirtschaftlichen Machtgefüge zugunsten der wirtschaftlichen Newcomer. Längst sind die Zeiten vorbei, als eine transatlantische Verständigung ausreichte, um eine Welthandelsrunde erfolgreich zu beenden. Entsprechend schwerer tut sich heute die Handelsdiplomatie mit der Konsensbildung, wie die Dauha-Runde eindrücklich beweist.
rg.

Unquote

SonntagsZeitung 11.5.08: seco-Chef J-D Gerber über die WTO-Gespräche / ein Paradebeispiel zur Manipulation der öffentlichen Meinung

2008-05-12T17:49:00.004+02:00

Unter dem Titel "Subventionen sind für Bauern wie Drogen" nimmt seco-Chef Jean-Daniel Gerber in der SonntagsZeitung vom 11. Mai 2008 Stellung zu Journalistenfragen zum Agrardossier der laufenden WTO Doha Runde.

Herr Gerber geht breit auf die Frage "... warum die Schweizer Bauern bald radikal umdenken müssen" ein und argumentiert mit dem über aller Häupter schwebenden Damoklesschwert namens Abschluss der Doha Runde.

Es ist an sich J-D Gerbers gutes Recht, seine wirtschafts- und handelspolitischen Ansichten zum Besten zu geben - genau so wie ich hier so ziemlich schreiben kann was ich will.

De facto lesen wir in der SonntagsZeitung jedoch nicht ein Interview mit irgend einem handelspolitisch interessierten Herrn Gerber, sondern mit dem Direktor des seco, Staatssekretär der Schweiz und handelspolitischem Orchesterchef von Bundesrätin Leuthard.

Der Artikel suggeriert, dass die WTO-Doha Runde kurz vor Abschluss stehe und unmittelbarer, massiver, agrarpolitscher Handlungsbedarf bestehe. Man mag zur Agrarpolitik stehen wie man will. Fakt ist, dass die Doha Runde in den letzten circa 2 Jahren nie so weit weg von einem Durchbruch war wie jetzt, Mitte Mai 2008. Wer die Situation in der WTO nüchtern anschaut wird nur Argumente gegen einen Doha Abschluss finden. Es gibt ein Argument, welches zu Gunsten des Abschlusses spricht: Keines der 150 WTO-Mitglieder will die "diplomatische" Schuld für einen Verhandlungsabbruch übernehmen und darum beteuern alle unverdrossen, es gehe vorwärts. Ob das reicht?

Vom seco-Direktor muss man erwarten können, dass er Informationsfragmente weniger manipulatorisch einsetzt, als er dies in diesem Interview gemacht hat. Schliesslich ist er Angestellter der öffentlichen Hand und nicht Lobbyist einer Interessengruppe.

Food Export Restrictions further doom Doha Prospects

2008-05-03T15:58:00.002+02:00

The "food crisis" - in quotation marks because in my view it is no crisis, but a return to more reasonable market prices - the "food crisis" has caught up with agricultural negotiations of the Doha Round.

A number of countries have introduced new or increased export restrictions on food items in response to the increase of the agricultural commodity prices in the markets.

Article 12 of the WTO Agreement on Agriculture deals specifically with the concerns of Net-Food Importers in respect to export restrictions. It is at least uncertain as to which point WTO Members with export restrictions in place have complied with the procedure as lined out in Art. 12.

It is obvious that net food importers are concerned about looming export restrictions for food implemented by some of their suppliers - which, at the same time, may be those that request further opening of the import markets within the Doha Ag talks.

(Actually food security specialists are those that are concerned, some agricultural negotiators are more delighted than concerned)

It comes therefore as no surprise that Japan and Switzerland have added a new dimension to the Doha Ag-talks - the following is an extract from the Bridges Weekly Trade Digest Vol. 12, Number 15, dated April 30, 08 (for the full text, click the link):

JAPAN, SWITZERLAND PROPOSE STRONGER WTO CURBS ON USE OF FOOD EXPORT RESTRICTIONS

With developing countries around the world placing curbs on agricultural exports in an attempt to deal with skyrocketing food prices, Japan and Switzerland this week called for tightening WTO rules on the use of export restrictions on foodstuffs.

In an informal paper dated 30 April, Japan and Switzerland proposed constraining countries' ability to restrict food exports, and requiring them to consider how such policies affect countries that depend on food imports.
...
Japan and Switzerland are both major food importers, though known for their jealously protected farm sectors. As rice producing countries have moved to curtail exports, importers such as the Philippines and Bangladesh have been unable to buy the amount of the grain they wanted on international markets (see BRIDGES Weekly, 23 April 2008, http://www.ictsd.org/weekly/08-04-23/story1.htm).

Export restrictions are a double-edged sword: though they may bolster domestic supplies to help keep costs within control, they also undermine farmers' incentives to step up future production.

Joachim von Braun, the head of the International Food Policy Research Institute, has called export bans "starving thy neighbour" policies.

Indeed it comes as no surprise that "Agriculture Negotiators ask for more time"
perhaps they should ask for an open-ended time-out ...
... some paradigms in agricultural trade seem to change ...
... these changes may well have deep impacts on trade talks ...

WTO Doha Round: The horizontal Process may start soon / The beginning of the end or the end of the beginning?

2008-04-27T07:49:00.002+02:00

WTO Director General Lamy informed Members on April 17 that the "horizontal process starts soon". With the absence of more challenging news, let us briefly look at the meaning of this remark and what it means for the negotiations. A good summary of the statement was provided by Bridges Weekly, here a few extracts:

WTO Director-General Pascal Lamy said last week that "solid progress" since February meant that governments were "now much closer to the finish line" in the troubled Doha Round talks.
.....
Tentative plans had started to take shape to bring ministers to WTO headquarters in Geneva during the week starting 19 May. Trade diplomats are now suggesting that this might be too soon for countries to resolve enough of their differences to give ministers a reasonable chance of agreeing on controversial cuts to tariffs and subsidies, particularly due to slow progress in the agriculture negotiations.
......
Lamy told the WTO Trade Negotiations Committee on 17 April that "the time is coming soon" to start what delegates call a 'horizontal process' - negotiations involving trade-offs across agriculture and non-agricultural market access (NAMA) in an attempt to satisfy countries' respective interests.

This so-called horizontal process refers eloquently to what others refer to as the "this for that exercise" - Some 150 WTO Members need to agree on something (well in reality perhaps a good dozen ...) - therefore, the work progress in the different negotiating groups is to be compared and checked, each Member will draw up his individual P & L report on concessions and other results given and obtained. Concessions will then be fine tuned for as long as it will take to reach individual P & L reports that each Member show at home.

Is what we see:

Another hopeful start for the concluding phase of the Doha Round - say in 2008 (what Lamy implies) ?

The end of the start of the Doha Round, with the real work only beginning now, with a time horizon of, say, 2012 (this is what I think)?

Among many other reasons, for me there are 2 elements that underscore the second scenario:

Recent developments in the commodity markets make it extremely and more difficult than ever for members to assess future impacts of concessions.
Two decisive Members, EU and USA, are, each for reasons of their own and without admitting it, quite happy to keep the Doha Round where it is.

Global Food Prices - are they really out of control ?

2008-04-19T11:58:00.002+02:00

I would like to share with my visitors the following graph drawn up by the Development Prospects Group of the World Bank, reproduced in today's Neue Zürcher Zeitung:

We see the inflation-adjusted, real prices for soybeans, wheat, rice and maize/corn in the course of the past roughly 30 years.

Undoubtedly, food commodity prices have been surging in the recent past. However, very much against what many would like to make us believe, we do not see prices out of bound - what we see looks like a change in a long term trend towards ever lower prices.

The change in this long term trend has been overdue.

While most public reactions discuss the short-term effects of higher food prices, very few observers recognize the important development effect of reasonable prices for agricultural produce. The vast majority of the real poor in the world depend on agriculture. A higher price for what they can sell from their production means a better livelyhood for them.

While short term effects need be dealt with, one should not loose the view on the long term effects.

Die multifunktionale Landwirtschaft - Comeback und Wiedergeburt eines handelspolitischen "Unwortes"

2008-04-17T14:08:00.002+02:00

Der Begriff einer multifunktionalen Landwirtschaft wurde in einer der Reformen der schweizerischen Agrarpolitik (ca 1990 - 1996) geprägt und - als wahrscheinlich weltweites Unikat - in der seit 1. Januar 2000 gültigen Bundesverfassung der Schweizerischen Eidgenossenschaft, Art. 104, festgeschrieben.

In den Agrarverhandlungen der WTO Doha Runde entwickelte sich der Begriff "multifunktionale Landwirtschaft" zu einem Reizwort. Erstens, weil auch andere Länder den Begriff agrarpolitisch zu nutzen begannen und zweitens, weil die am Agrarfreihandel interessierten WTO-Mitglieder den Begriff als Schutzbehauptung verstehen wollten.

Dass vielleicht doch etwas mehr als nur handelspolitische Schutzinteressen hinter dem Begriff stecken, wurde soeben von unerwarteter Seite eindrücklich dokumentiert:

Mehrere Unterorganisatonen der UN (UNDP, UNEP, UNESCO, FAO), die Weltbank und die WHO lancierten vor einigen Jahren einen Evaluationsprozess der globalen Landwirtschaft, Ernährungs- und Entwicklungssituation:

International Assessment of Agricultural
Science and Technology for Development

Dieses Gremium hat soeben einen umfassenden Bericht erarbeitet, dessen Zusammenfassung unter dem Titel: Agriculture- The Need for Change / deutsch: Landwirtschaft- ein Richtungswechsel ist nötig / durch klicken auf den link heruntergeladen werden kann.

Der Bericht schlägt zwar auch kritische Töne bezüglich der Agrarhandelspolitik der reichen Länder an, hält aber auch fest:

... to meet the challenges lies in putting in place institutional, economic and legal frameworks that combine productivity with the protection and conservation of natural resources like soils, water, forests, and biodiversity while meeting production needs ...

Ob wohl Artikel 104 der Bundesverfassung als Inspirationsquelle gedient hat? (anstatt zu übersetzen lesen Sie am besten nochmals Art. 104 BV)

Man kann festhalten, dass der Begriff "multifunktionale Landwirtschaft" nun weltweit verankert und als zentrale Zukunftsstrategie Ernst genommen werden muss.

Zur Kenntnis nehmen muss man auch, dass hier einiges an handelspolitischen Doha-Zündstoff enthalten ist. Zahlreiche WTO-Mitglieder werden kaum zögern, die Ergebnisse dieses Berichts in ihre Verhandlungsposition einzubauen.

Für weitergehend interessierte ist die im Zusammenhang stehende PowerPoint Präsentation interessant und aufschlussreich - hier klicken zun runterladen - .

Doha Round: Ready for the next of the many "Moments of Truth" ?

2008-04-12T17:20:00.003+02:00

Behind the lead of influential WTO Members Australia, Brazil, Canada, Japan, EU and the US, agricultural negotiators are reported to have paved the way for an agreement on how to deal with the so-called sensitive products. (For a good summary, go to Bridges Weekly, Number 12, April 11, 2008 - ICTSD appears to be late in placing on their site the weekly e-mail trade digest.

Sensitive products are typically products that are economically important to producers in a Member without them being competitive with imports.

Many sources, including Mr. Zoellick, now World Bank Chief, have been quick to allude to this step forward with stark words - moments of truth etc.

In fact, the reported consensus on how to go forward on sensitive products is a desperately needed sign that negotiators have not been turning in circles only for - say - the past 12 months. What we see is a sign of life rather than a moment of truth.

If it comes to moments of truth, I would like to learn more about what this sensitive products "deal" means on the side of NAMA - non agricultural market access negotiations.

It is difficult to assess whether and how this step contributes to the "balanced outcome" - an issue we have discussed in several occasions on this site - i.e. here.

However, I think it is imperative to conclude today's remarks on a completely different tone:
Economic slow downs have been, all along history, a fertile breeding ground to hammer out consensus among negotiating trading partners. For a couple of weeks now, we have been seeing growing signs that the subprime financial crisis spills over into the real economy, just about to trigger a nice, belt-tightening recession. If this should really happen, then we do see a real change in the setting of the Doha Round and the Doha-odds will disappear behind sheer economic need of Members.

Reduktion der Agrarzölle um durchschnittlich 70%?!

2008-04-10T21:59:00.004+02:00

Heute wurde publik, dass die Schweiz, bzw. der Bundesrat, bereit ist, bis 70% Abbau der Agrarzölle zu gehen.

Was auf den ersten Blick als enorm scheint, wäre mit den zur Zeit hohen Weltmarktpreisen für Agrarprodukte kaum ein unmittelbares Problem.

Über den Daumen gepeilt kommen wahrscheinlich zum jetzigen Zeitpunkt kaum Zölle zur Anwendung (im Gegensatz zu möglichen Maximalzöllen), welche die 30% Marke der gebundenen (maximalen) Zölle überschreiten.

Entsprechend ist es wichtig, die Reaktionen an der Sache zu orientieren. Eine direkte Ablehnung dieses verhandlungstaktischen Befreiungsschlages ist politisch wenig hilfreich und hat im Rahmen der gesamtwirtschaftlichen Interessen der Schweiz an einem Doha Abschluss keine Chancen.

Was mit einem Zollabbau im oben erwähnten Umfang jedoch geopfert wird, ist die Möglichkeit, bei wieder sinkenden Weltmarktpreisen das Preisniveau in der Schweiz stabil zu halten.

In der laufenden Diskussion der neuen Farm Bill der USA (entsprechend AP 2011) nimmt der Begriff Sicherheitsnetz - "Safety Net for our Farmers" - einen wichtigen Platz ein.

Der Begriff Sicherheitsnetz - als Ersatz für Marktabschottung - muss auch in der Schweiz Eingang finden.

Brot und Spiele - oder wie man von echten Problemen ablenkt

2008-04-06T11:14:00.002+02:00

Note to the English-language visitors: I did not find any recent, trade related subject worth a few lines. For a change something in German on Swiss politics.

Aus dem Imperium Romanum stammt der Spruch "Panem et circenses" In Wikipedia finden wir zur heutigen Bedeutung des Spruchs "Brot und Spiele" folgendes:

Der Ausdruck bezeichnet auch heute noch Versuche der Regierung oder anderer administrativer Strukturen, das Volk oder auch Angestellte usw. von Problemen (z. B. Rezessionen, innenpolitischen Problemen usw.) abzulenken, indem man mit Steuersenkungen, Wahlgeschenken oder eindrucksvoll inszenierten Großereignissen die allgemeine Stimmung zu heben versucht.

Gemeint sein können andererseits auch die einseitigen "niederen Gelüste" des Volks nach solchen Maßnahmen, was als Zeichen von Dekadenz und Ignoranz gewertet werden kann.

Das Gezeter, welches wir in der Schweiz zur Zeit rund um die Wahl von Bundesrätin Eveline Schlumpf-Widmer erleben, enthält alle Zutaten der römischen Orinalformel:

Erstklassige Unterhaltung - Blut und Tränen fliessen in Strömen - der Plebs - sorry: das Volk - ekelt sich vor Begeisterung
Von realen Herausforderungen, welchen sich der Staat stellen sollte, wird wirkungsvoll abgelenkt

Wie konnte eine einzelne Bank unseres kleinen Landes (UBS) Auslöser einer inzwischen weltumspannenden Finanzkrise werden?
Während die schweizerischen Wettbewerbshüter eifrigst darauf bedacht sind sicherzustellen, dass die beiden dominierenden, oligopolistischen Grossverteiler (Migros, coop) ihre Kartoffeln bei viel mehr als 2 Anbietern kaufen können, scheinen die schweizerischen Bankenregulatoren überhaupt nicht bemerkt zu haben, dass die UBS über Jahre gefährlichste Klumpenrisiken aufbaute, die jeden Vergleich in den Schatten stellen.

Erleben wir nichts anderes als ein interessantes Ablenkungsmanöver (Widmer-Schlumpf) von einem echten Problem (Bankenkrise)?

Wenn wir hören, dass die Leitung der SVP um Herrn Blocher (abgewählter Bundesrat und Ex-Unternehmer) und die UBS-Führung sich sehr nahe stehen sollen, darf man sich gar nicht allzu stark ärgern, sollten solche Vermutungen in den Raum gestellt werden.

Die UBS hat ein evidentes Interesse, zusammen mit der düpierten Bankenaufsicht, dass die Aufräumarbeiten nicht im Fokus der Öffentlichkeit stattfinden müssen.
Die SVP hat ein interessantes Szenario zur Volksbelustigung.
Im Moment funktioniert das Ablenkungsmanöver glänzend.
Offenschtlicher Kollateralschaden (Person Widmer-Schlumpf, politische Redlichkeit, die Schweiz als Nation) scheint niemanden zu kümmern.

Trade and Welfare correlate - Yes?

2008-03-27T23:19:00.003+01:00

While writing these lines, in a hotel in Buenos Aires, Argentina, the president of my present host country addresses very pathetically the Nation, this in response to growing riots and the cutting off of food supplies by the local producers.

The story behind: Argentina's government increased about 15 days ago taxes on exports of agricultural commodities. This progressive tax sifts off, depending on export prices obtained, 45% and more of the export value of shipments in the case of soybeans, slightly less for other oilseeds or for maize / corn and wheat.

While it is quite funny to watch the political ballgame, the situation indeed merits some thought and reflection. Doing this, I would like to count a conversation I had about 2 weeks ago with an impressive widowed lady who runs in Misiones province of Argentina a 5000 head cattle breeding / finishing ranch (estancia). The ranch of this lady is accredited to supply cattle for the so cattled Hilton quota (boxed beef of top quality) that goes to the EU market. On my question, whether she was able to obtain a price premium for finished steers whose hind quarters go off to the expensive EU market, her only answer was a disgusted shaking of her head and the remark, that there simply is no differentiated market for the live animals.

It is indeed sad to see that welfare created by trade is being sifted off, in one case, by government - or, in the other case, by the added-value chain.

While it is often claimed to be beyond the scope of WTO to address the process that distributes welfare created by trade among all the players in the value-added chain, transpareny and fairness is required in that process in order to enable WTO pursue sustainably its goals and reasons to be - most pressing the conclusion of the Doha Round.

While I have taken Argentina as an example, this is a mere coincidence - the situation that the primary producer is excluded from his share of added value can be found everywhere, including in the so called post-industrialized countries such as Switzerland or the EU. Addressing these domestic inequities might well be a better contribution of Members to the Doha process than haggling over subsidy limits in Geneva.

TradePolicy.ch

WTO - READY FOR A NEW START IN THE NEW YEAR

Even "Smaller Steps" appear to be beyond the reach of the 8th Conference of Trade Ministers

Are "Smaller Steps" way out of the Doha deadlock?

?Is Trade still on the Agenda?

Development and Cooperation

The Way Out of the Doha Deadlock

Is the Doha Round going anywhere?

Davos World Economic Forum instills fresh blood into Doha-Round

Merry Xmas & Happy New Year - Trade & Climate - where to go?

Doha Round: It's the Final Countdown (Lamy)!-is it?

Striking Observations

Art. 104 Agriculture

TRADE POLICY - OWNERS AND DRIVERS

How to wake up the Sleeping Beauty

G8 and G20 have dropped Doha Round - it is time for PPM

Facts prove us to be right

Back to Square One - or even beyond!

NO NEWS ARE BAD NEWS

What Hinduism, Buddhism and the Doha Round have in common

New Doha impetus from WEF / Davos

WTO-Minister wollen Freihandelsrunde wieder in Fahrt bringen

EU Commission 2009 - 2014 designate - interesting!

Preference Erosion - a key obstacle to DDA conclusion being removed?

Antibiotics in animal farming - an issue with relevance for global trade

No Xmas bang from the Doha Round - but my best wishes for a Merry Christmas and a Happy New Year

Acrobatics on the Trade Negotiation Floor - Geneva Ministerial

Setting the stages for the Ministerial - officially and extraofficially!

Food for Thought - Right in Time for the upcoming meeting of Trade Ministers

FAO World Summit on Food Security - Part of the Problem or Part of a Solution?

US Government nominates Chief Agriculture Trade Negotiator to WTO

Seventh WTO Ministerial Conference

Lamy Calls for Text-Based Talks, Delegates Express Frustration

Food Security - again!

Global Food Security - is this a real issue?

A less than uninspiring "trade week" - in spite of the G-20 summit

Back to the real issue - How to bridge the gap ?!

Delhi Meeting 'Breaks Impasse' in Doha Talks - Does it?

Follow Up

WTO Summer Break - Time for reflection

WTO Doha Round: the gap between political talk and action

10 years after Seattle

Dead Aid: Why aid is not working

WTO Ministers meet in Geneva in December - will Doha Round be an issue?

Food Sovereignty - taking food security a step further

NGOs Cry Foul over Rich-Country 'Land Grab' in Developing World

Doha - Negotiations - Skipping Modalities - Cutting of the Gordian Knot?

Argentina evaluates suspension of Glyphosate use

PPM - WTO talks get spiced up!

Policy objectives

The financial services triggered global crisis, G-20 and WTO

Food Crisis lingers - is that really so?

While Economic Turmoil Grabs Headlines, Food Crisis lingers

Compliance (with UR) - done rightfully - a good remedy against protectionist tendencies

Back to the Hen and egg question: what comes first in WTO? Compliance (with agreements in force)? Negotiations (of new agreements)?

Lamy-optimism turns bad judgement

An unispired fortnight for global trade

Doha Round Farm Talks: Falconer trying to bridge the still unclosed USTR gap

Thanks to WEF - the path forward is now clear!

The season of platitudes is back, again / some WEF Davos bashing

Obama's difficulties in naming new USTR Head do not vouch well for the Doha Round

High Volatility of Commodity Prices - Poison for decent Production Planning

Food for Thought for a Starter for the New Year

A sea of troubles

Year 2008: no need to remember, but a lesson to be learned

No Ministerial Meeting - Fortunately - one is tempted to say

Revised texts get a lukewarm reception

The draft texts are out - the high stakes were worth it!

WTO's Lamy: Director General or Professional Gambler?

Export Credits are back through the financial crisis back door?

What Food Crisis?

Managing Globalization - Who exits the recession first?

Doha-Round quo vadis - short and long term

G-20 Meeting November 15 / Washington - Trade stuck in the sidelines

New brooms sweep clean - old brooms know the dirty corners best

The financial & economic crisis 2008 - the singular opportunity for the Doha Round ?

The crisis of the financial system - a gloomy stage for a Doha Final

Indeed the return of government intervention and the loss of trust, across society, in the soundness of market mechanics spell trouble for a global, liberal trade accord.

However, we can focus the situation from a different angle:

The GATT was born out of need and economic distress, out of the ashes and debris left by World War II. The importance GATT's contribution to the sustained economic recovery the world has gone through since then is beyond doubt.