May 31, 2008

The WTO Dilemma

This report from the IHT suggests that all the negative comments being made about the WTO texts is actually a sign that progress is being made.

But seasoned diplomats cautioned that the rhetoric should be taken with a pinch of salt. They said the revised texts had helped put WTO's Doha round of negotiations within sight of an agreement.
"The more pleased you are, the less pleased you must sound," said one diplomat from a major developed country.

We agree, sometimes this might be true.

However this Xinhua article highlights one of the problems we must resolve to achieve agreement.

"I was quite transparent in saying that this farm bill is not sending a great signal that the U.S. are serious about reducing their trade-distorting subsidies," WTO Director-General Pascal Lamy told a European Parliament committee after meeting visiting U.S. lawmakers in Brussels.

"The only chance you have to trump up this farm bill is the WTO deal which will then necessitate a reform of the U.S. system," Lamy said.

Does anyone have enough confidence in the US system to gamble that the US will allow an agreement reached in the WTO, an agreement which gives US manufacturers very little and services exporters nothing, to override the Farm Bill and see it being re-written? Don't forget that Bush has failed to change it already?

We say the answer to the question is NO. So why would anyone reveal their true negotiating positions and settle now? Lamy is dreaming if he thinks that there is a 60% chance of achieving a deal this year.