Divide and trade

Apr 25, 2009 Editorial

There has been some publicity in the state media on the invitation proffered by President Obama during the side meeting of the recently concluded Fifth Summit of the Americas to the Heads of Government of CARICOM to “meet with him in the United States later this year”.
During the said side meeting, among other issues, that of trade was brought up as it was with the Prime Minister of Canada and the US Congressional delegations that also attended the Summit.

It is to be noted that a Free Trade Agreement is about to be negotiated with Canada, about which President Jagdeo has raised some concerns (justifiably, in our estimation) about the capacity of the Caribbean Regional Negotiation Machinery to represent our interests adequately. The President has been vociferous in his criticism of the Economic Partnership Agreement negotiated with the EU, which Guyana eventually signed under duress. The asymmetries of power and resources between the two bodies inevitably leads to one-sided outcomes – and one does not have to be a genius to know which side winds up with the short end of the stick.

However, for this very reason, the developed countries are bent on pursuing bilateral trade agreements with the developing countries rather than working to complete the multilateral DOHA Round of the WTO that is dedicated to development and in which developing countries have some parity in numbers. The US has indicated very strongly by its actions that it will defer on concluding the DOHA round and pursue bilateral agreements.

Just before the Summit, Jeffery Davidow, the White House advisor to the Summit, revealed that rather than “international treaties”, the US was interested in “ad hoc” groupings of governments, businesses etc and varied forms of collaboration. Bilateral trade agreements with Panama, Colombia and Korea were identified. In this strategy, and on DOHA, they are following faithfully the strategy of the Bush administration.

After hardened US position torpedoed the DOHA talks in July 2008, three leading US trade associations in the manufacturing, agriculture and services sectors asserted in a letter to President Obama this February, “The Doha Round cannot proceed, let alone succeed…until all major participants (read the major developing countries) recognize the Round must provide reciprocity, balance, and ambition.” At the same time a group of 54 “trade skeptics” from the left wing of the House of Representatives wrote to the President calling for a whole new direction for US trade policy and criticizing the Doha agenda as “outdated” and “long-beleaguered.”

In his first statement on trade policy, the new administration’s trade representative Ron Kirk stated on Doha echoed these positions: “It will be necessary to correct the imbalance in the current negotiations in which the value of what the US would be expected to give is well-known and easily calculable, whereas the broad flexibilities available to others leave unclear the value of new opportunities for our workers, farmers, ranchers, and businesses.”

Just before the London Summit, Kirk shot down the idea of an “early harvest” related to trade facilitation and capacity-building for developing countries, arguing that this would lessen pressure later for an all-encompassing deal. Two days ago he declared: “As President Obama said at the G-20 Summit and at the Summit of the Americas, the U.S. is closely reviewing the Doha round to determine how best to bring it to a successful conclusion.
For America, that means meaningful market access for our farmers, ranchers, manufacturers and service providers. A few emerging economies are now becoming significant players on the global stage, and as the world emerges from the current economic situation much of the growth is going to come from a number of these key markets.

These advanced developing countries have rightfully claimed a bigger role in Doha. But those who lead at the WTO are also the ones who have to compromise and make hard choices about opening their markets.” The gauntlet is cast.
From their experience with the EU on negotiating the EPA, CARICOM leaders should be very cautious in proceeding to any trade agreements with major powers outside the ambit of the WTO Doha round. When you are small and vulnerable, there is safety in numbers.

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