The notion of rules-based open trade, which the US did so much to entrench in the international system, faces turbulent times ahead in Washington.
In an election year marked by economic uncertainty and voters worried about falling house prices, inflation and the prospect of job losses, US politicians have not leapt to make nuanced arguments about how mechanised manufacturing has replaced workers, or how inexpensive imports raise Americans’ purchasing power.
For Democrats – likely to retain control of Congress even if they fail to capture the White House in November – the unexpectedly long presidential nomination battle took a populist turn. Senators Obama and Clinton both assured primary voters of their mistrust of free trade (although each has top advisers who support it). Presumptive Republican nominee John McCain denounced protectionism, but polls suggest that the party’s supporters are more sceptical.
Furthermore, while major trade deals have traditionally required support from both parties in Congress, these are rough times for bipartisanship. While the US free trade accord with Colombia fell prey to this acrimony in April (see page 16), one of the few things that lawmakers from both sides of the aisle were able to agree on recently was a lavish farm subsidy package – hardly helpful for the struggling Doha Round trade talks at the WTO (see page 17).
Meanwhile, trade officials from around the world – including those from the US – are still working towards a Doha compromise, as though the Bush administration had not lost its trade negotiation authority in mid-2007. However, they continue to peer anxiously at Washington, trying to understand how developments there might affect a prospective agreement.
ICTSD’s 2008 delegation of developing country WTO ambassadors to Washington turned out to be well-timed to help bridge some of the gaps of understanding that exist between the halls of the WTO and the corridors of power in the US capital. Senior developing country officials were able to exchange views with a wide range of people who make or influence trade policy in Washington, ranging from USTR Susan Schwab to congressional representatives and staff, in addition to business, labour and environmental groups, as well as top trade analysts.
Better understanding, of course, does not put a Doha agreement any closer within reach.
Nevertheless, the ambassadors were able to assure US policy-makers, many of whom were convinced that “Doha was dead,” that real progress was being made towards a deal. Progress that would get a boost from signs of interest in Washington, especially indications that Congress would be open to a Doha-specific ‘trade promotion authority’ grant.
In return, the visitors were told that at least some of the partisan wrangling on trade was election year bluster, and that there was still interest in international engagement on trade policy.
Prospects for congressional passage of a Doha deal this year remain very slim, however.
Even supposing that WTO Members manage to strike framework ‘modalities’ accords on agriculture and manufacturing trade by July – far from a sure thing – they would have to finalise commitment schedules by November for a Doha package to be put to a post-election ‘lame-duck’ session of Congress before Christmas.
If the round slips to the next US administration, other issues are likely to arise. For instance, the new president would probably wish to put his stamp on the new agreement in some way – potentially a difficult pill for trading partners to swallow. While a Democratic Congress just might be inclined to give a President Obama the benefit of the doubt; a President McCain would have to do much to make bipartisan co-operation on trade possible.