Celebrating the Gift that Keeps on Giving


Have you made a New Year’s resolution yet? If I could impose one on the world’s leaders, it would probably be for a genuine commitment to peace on earth. Or maybe a permanent end to the metric system.

If I had to impose one that was a bit more realistic, however, it would be this: Conclude the Doha round of world trade talks.

It wouldn’t even have to be a New Year’s resolution. It could be a birthday present instead: On January 1, the multilateral-trading system that has delivered so much economic freedom and material prosperity will turn 60 years old.

In 1948, the United States and 22 other countries concluded a treaty that cut 45,000 separate tariffs. The benefits of the General Agreement on Trade and Tariffs, as it was called, became so obvious that subsequent pacts liberalized trade even further and included a growing number of countries. The Uruguay round, which finished in 1994, involved 123 nations. It also marked the metamorphosis of GATT into the World Trade Organization. Today, the WTO administers trade rules and settles disputes between countries.

Like a lot of 60-year-olds, the international-trading system can look back and smile at its many accomplishments. Since the birth of GATT/WTO, world trade has increased by a factor of 27–an incredible achievement that has built global wealth, expanded consumer choice, and created jobs just about everywhere this side of North Korea.

After six decades, however, the network is slowing down. The current Doha round of trade talks is moving about as quickly as someone who has just chugged a half-gallon of eggnog.

Global trade itself is booming. The North American Free Trade Agreement, which coincidentally comes into full effect on New Year’s Day, was negotiated outside the parameters of GATT and the WTO. The United States has struck similar deals with many other countries, including Australia, Chile, and Israel. This fall, Congress approved the latest one, which will expand opportunities between the United States and Peru.

Each of these agreements is worthwhile, but most of them are stocking stuffers compared to the big packages under the Christmas tree. WTO talks have the potential to benefit billions of people. A worthwhile conclusion would help everyone from soccer moms in Sacramento to small resource farmers in Delhi.

Success will require a renewed dedication to the Doha round–a sincere New Year’s pledge that negotiators will overcome their differences in 2008.

The current quarrel essentially pits the United States, Japan, and Europe against a group of poorer nations led by Brazil, China, India, and South Africa. The United States and its trade allies want better access to consumers in developing countries; the developing countries want rich nations to reduce their farm subsidies, which distort commodity markets.

Both sides make valid points, and it isn’t hard to imagine a sensible compromise in which everybody gives a little and gets a little. Kind of like Christmas, come to think of it.

The negotiations kicked off in 2001, and they’ve been deadlocked almost from the start. Right now, the Doha round is moribund. Every so often, trade ministers meet and discuss their disagreements. They’re like fans of the Chicago Cubs–they keep showing up, but it always ends in disappointment.

A pessimist might conclude that the whole enterprise is pointless. An optimist would look to the example of the Boston Red Sox, who broke a legendary curse that had hung over the team for more than 80 years. If the Red Sox can win two of the last four World Series, then surely the members of the World Trade Organization can finish the Doha round.

Traditionally, the United States has provided a lot of the WTO’s leadership. At the moment, however, Congress is writing a farm bill that’s certain to violate international trade rules–rules that our country already has agreed to follow. Moreover, a disturbing number of presidential candidates are sounding like protectionists as they barnstorm through Iowa and New Hampshire.

It’s been said that New Year’s resolutions go in one year and out the other. A resolution for free trade might be no different–but not because it wouldn’t be worth keeping. A successful Doha round would be a gift that keeps on giving.

Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology.

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