Going Slow at WTO

The special counsel to Agriculture Secretary Ann Veneman, David Hegwood, last winter looked at the 490 percent tariff Japan had in place for rice imports and asked, “If one country is allowed to maintain a tariff of that level for a sensitive sector, then why wouldn’t all countries demand the right to do the same?” An ideal rhetorical question, and after the collapsed talks of the World Trade Organization this week in Cancun, answered more emphatically than usual.

A mishmash of immediate self-interest, long-term self-interest, special interest and avarice, sprinkled delicately with altruism, regularly flavors WTO negotiations, so it was not surprising that smaller, poorer countries would find that they could not persuade the European Union or the United States to sufficiently slash their subsidies to agricultural interests. The United States and the EU often cannot agree between themselves on tariffs; the prospect of aiding, say, Uganda on cotton exports would have been surprising.

The identified causes of the walkout by the smaller nations Sunday were proposed trade rules governing investment and government procurement. But after years of not seeing adequate results from lowered tariffs and removing restrictions on investments, the smaller nations seemed less trustful overall during this latest series of talks, called the Doha Round, and the global slowdown for goods made in low-wage economies hasn’t helped.

The U.S. interest too has shifted as more of its manufacturing jobs leave the country, hurting wages and generally making Americans more aware – and suspicious – of global trade. Mr. Hegwood’s comments last winter correctly anticipated one of the problems this week, that great disparities in support and protection levels remain in place for major agricultural economies.

Given the lack of growth recently in trade and legitimate concerns from small countries about their ability to impose environmental and working standards within their own borders, the opportunity for major advances in promoting world trade is less likely than slow, cautious steps to keep everyone comfortable. For the near term, that’s not a bad thing, even if it means rice exports to Japan only dribble along for a while.