Amid all the coverage of the Democratic National Convention, and of the fact that John Kerry seems to have gotten little or no bounce from it, slight attention has been given to the most important development in trade policy over the past four years. That is the Aug. 1 agreement at the World Trade Organization talks in Geneva on a framework for advancing the Doha Round of negotiations.
The Doha Round was launched in November 2001 but seemed at an impasse at last September's WTO meeting in Cancun when Latin American, African and Asian nations rejected the approach of the United States and the European Union. The WTO rules require consensus, which seemed to be impossible.
But in Geneva a consensus emerged. The United States and the EU agreed to eliminate agricultural export subsidies and to make a "substantial reduction," starting with a 20 percent cut, in domestic farm supports. Developing countries, led by Brazil and India, agreed to lower barriers to manufactured goods and to services. This is not a final agreement, which everyone agrees cannot be reached by the original deadline of this December. But there is a good chance of a deal by the December 2005 meetings in Hong Kong.
This is a potential win-win situation. Consumers and taxpayers in the United States, the EU and Japan would be relieved of the cost of farm subsidies. Manufacturers and service providers in those countries would get access to markets from which they are barred. Big agricultural producers like Brazil and India would get access to First World markets, and the struggling poor nations of the Caribbean, Latin America and Africa would be able to sell their farm products and thus get a jump-start in economic growth. The major losers, relatively few in number, would be subsidized farmers in the developed countries, who may have other opportunities in advanced economies.
But the shape of a final deal depends on further negotiations over a host of details -- and on the American presidential election. France is already squawking that the EU is selling out its lavishly subsidized farmers, and some U.S. farm state politicians are also voicing objections. Japanese politicians love to protect their rice farmers. U.S. Trade Representative Robert Zoellick, working with the EU's Pascal Lamy, has skillfully put together the pieces after the debacle at Cancun, and at the same time he has negotiated bilateral trade agreements with Australia, Morocco, Thailand, Colombia and other nations -- a clear reminder to developing countries that the United States could concentrate on such deals and render the WTO irrelevant.
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