Europe Shouldn't Wait for Hillary Or Obama If It Wishes To Secure Further Trade Liberalization During the Doha Round

http://www.iht.com/articles/2008/03/10/business/rtrinside11.php

Prospects grim as negotiators push for a global trade deal


By Paul Taylor

Reuters


Monday, March 10, 2008


International Herald Tribune


BRUSSELS: To hear some U.S. presidential candidates and European leaders talk, you would think hard times lay ahead for advocates of free trade.

Senators Hillary Rodham Clinton and Barack Obama in the Democratic primaries are criticizing the North American Free Trade Agreement with Canada and Mexico and vowing to renegotiate it to protect American workers.


Clinton, with strong backing from U.S. organized labor, has advocated a "time out" in trade liberalization and questioned whether the theory of comparative advantage that underpins free trade still applies in the 21st century.


On the other side of the Atlantic, President Nicolas Sarkozy of France has urged Europeans to stop being naïve about trade and to develop "a real system of community preferences" to protect European Union agriculture and industry from unfair competition.

[WHAT SARKOZY IS REALLY SAYING, IN NUANCED FRENCH FASHION, IS THAT, GIVEN THE PRESENT ERA OF GLOBALIZATION

IT IS NOW TIME TO UPDATE FORTRESS EUROPE'S PROTECTIONIST DEFENSES WITH NON-TARIFF TECHNICAL BARRIERS TO TRADE DISGUISED AS 'CULTURAL PREFERENCES']

Political opposition has forced the EU's trade commissioner, Peter Mandelson, to delay changes in anti-dumping duties meant to take account of the interests of European firms that produce goods in low-cost countries.


Mandelson has broad powers to negotiate trade agreements on behalf of the 27-nation bloc, but France is doing its best to handcuff him and organized a caucus of 20 farm ministers last month to warn against further concessions on agriculture.


Brussels trade diplomats say that the commissioner, who is British, has long been viewed with suspicion in many member states because of his liberal views on trade and that his influence may be waning.

All this sets a grim backdrop for negotiators at the World Trade Organization, who are preparing yet another "final push" for a global deal to cut tariffs and remove trade barriers. Their aim is to clinch a deal before President George W. Bush leaves office next January.


Turmoil on financial markets and a sharp economic slowdown, especially in the United States, have fueled calls for protecting jobs in wealthy countries.


The trade organization's director general, Pascal Lamy, says the downturn on both sides of the Atlantic should focus minds on the benefits of a trade agreement, not least because failure would damage confidence in the world economy. Keith Rockwell, a spokesman for the agency, said, "Do you fix the roof when the sun is shining or when it's raining? Either way, it's still a good idea to fix the roof."


Politically, a failure of the rules-based multilateral system to deliver progress on trade could undermine European hopes for a more ambitious international agreement in 2009 to curb the greenhouse gas emissions that are blamed for global warming.


As with climate change, a trade deal requires concessions from big emerging nations like India, Brazil and China, which want to be able to protect key sectors of their economies from competition from rich countries.


Those conflicts seriously threaten the trade talks, as does the reluctance of wealthy nations to reduce radically the longstanding protection of their farmers.


"I share the skepticism that anything good will come out of the Doha Development Agenda," said Adam Posen of the Peterson Institute for International Economics in Washington, using the name given to the trade round that began in Qatar in 2001.


Posen said that whoever wins the White House in November, Congress will make trade conditional on labor and environmental standards to shut out cheap competition, mainly from Asia.


Andre Sapir, a trade economist at the Free University of Brussels and former adviser to the European Commission, agrees that the climate in the United States is not favorable for new trade deals, although the Europeans should still push for one.


"You need some bad economic news to make a trade agreement necessary as a booster of confidence," he said. "But even if there is a deal now, the chances are that something is going to be reopened after the U.S. election."


U.S. trade diplomats in Europe are using Clinton's rhetoric and fears of a more protectionist U.S. administration to try to focus on the need to complete a trade deal now.


One senior diplomat, speaking on condition of anonymity because of the sensitivity of the issue, said his message to European counterparts was: "Don't wait for Hillary."

EU Has Long Held Developing World Hostage to Non-Scienced-Based Health & Environmental Standards Deemed Economically & Socially Harmful

http://www.itssd.org/Res%20Ipsa%20Loquitor/Res%20Ipsa%20Loquitor%20-%20Studies%20showing%20impact%20of%20overly%20stringent%20stds%20on%20developing%20countries.pdf


ITSSD Main Website Issues - Studies Evaluating Negative Impacts of Overly Stringent EU Standards on Developing Countries


I. Generally


II. World Bank and Other Studies Quantifying the Impacts of Technical Barriers to Trade


III. World Bank and Other Studies Examining EU Standards Relating to Aflatoxins, in Nuts, Dried Fruits and Cereals


IV. World Bank Study Evaluating EU Maximum Residue Level (MRL) Standards Relating to Tetracyline Use in Beef


V. World Bank Study Evaluating EU MRL Standards For Bananas


VI. World Bank Study Evaluating Impact of Trade on Air Pollution Standards in Developing Countries


VII. World Bank Study Evaluating How Environmental Standards Affect Developing Country Export Competition


VIII. World Bank Study Quantifying the Trade Impact of Sanitary and Phytosanitary (SPS) Standards on Sub-Saharan Africa

Overly Strict EU Environmental and Health Regulations Have Long Served as Protectionist Trade Barriers That Harm Developing Country Advancement

http://www.itssd.org/Res%20Ipsa%20Loquitor/Res%20Ipsa%20Loquitor%20-%20Developing%20Countries%20Trade%20Barriers%20Sust%20Dev.pdf


ITSSD Main Website Issues - Developing Countries, EU Regulatory Trade Barriers and 'Negative' Sustainable Development


I. Generally


II. DDT , Malarian and UN POPs Treaty


III. UN Basel Convention and the Waste and Recyling Trade in Asia


IV. The Developing World Response to the EU's Proposed (now Final) REACH Chemicals Regulation


V. Africa's Response to Europe's GM Moratorium

Candidates Convey Confusion Over Trade: There are No Silver Bullets

Decoding Candidates on Trade

February 21, 2008; Page A2

By DAVID WESSEL

http://online.wsj.com/article/SB120354791005181195.html?mod=googlenews_wsj


The virtues of international trade and the pressures globalization is putting on American workers are becoming more prominent issues in the presidential campaign, even though the candidates most hostile to trade got trounced.


Sen. John McCain, the Republican, is the free trader in the race. "We need to continue to lower barriers to trade because 95% of the world's customers live outside the United States," Mr. McCain said recently in Michigan, where the jobless rate is 7.6%, the highest in the nation. "We need to have competitive manufacturing through lower health-care costs, lower taxes and opening new markets."


Mr. McCain has been a steady supporter of free trade in the Senate -- from the North American Free Trade Agreement to the pending U.S. trade pact with South Korea, which even some trade lovers find flawed.

By contrast, Democratic Sens. Hillary Clinton and Barack Obama are vying to be the bigger trade skeptic. As they fight for Ohio (jobless rate 6%), neither wants the mantle of former President Clinton, who shucked the populist strains of his 1992 campaign and became a champion of Nafta and China's entry into the World Trade Organization.

It's hard to tell their positions apart. In the Senate, both Mrs. Clinton and Mr. Obama voted for a recent trade accord with Peru. Both voted against a Central American trade pact. Both oppose the South Korea deal.


Both voted to whack China for keeping its currency weak. Both back 2004 Democratic nominee John Kerry's plan to use the tax code to reward companies for keeping jobs in the U.S., though Mr. Obama does so more loudly.


Lately, the two have been maneuvering to see who can be nastier about Nafta. In the end, though, neither would abrogate the treaty. She would "review...and work with our trading partners to make necessary adjustments." He would "work to amend."
DISCUSS


What sort of trade policy do you think a President McCain or President Clinton or President Obama would -- or should -- pursue?


Veterans of the Bill Clinton White House say Mrs. Clinton was a loyal soldier, but often unenthusiastic, at best, about her husband's embrace of globalization. Pro-globalization Democrats long have been uneasy about her for that reason.


Until his campaign reached the Midwest, Mr. Obama sounded like the former president. "Like [Clinton Treasury Secretary] Bob Rubin, I am optimistic about...the ability of U.S. workers to compete in a free trade environment -- but only if we distribute the costs and benefits of globalization more fairly across the population," he wrote in his 2006 book. The big-company chief executives who belong to the Business Roundtable say almost the same thing.


But if Bill Clinton were running again, he'd probably put some distance between his campaign and his eight-year presidency. It's the voters, stupid.


In December, a Wall Street Journal/NBC News poll asked Americans whether the increasingly global nature of the U.S. economy was good ("because it has opened up new markets and resulted in more jobs") or bad ("because it has subjected American companies and employees to unfair competition and cheap labor.") By 58% to 28%, the respondents said it was bad.


MORE

• Comparison of where candidates stand on trade (PDF)
From The Wall Street Journal/NBC News Poll:


"Do you think the fact that the American economy has become increasingly global is good because it has opened up new markets for American progress and resulted in more jobs, or bad because it has subjected American companies and employees to unfair competition and cheap labor?"


Dec. 2007 June 1997
Good 28% 42%
Bad 58% 48%
Equally Good & Bad 11% 7%
Not Sure 3% 3%


From the December 2007 poll:
Good Bad Equal/Not Sure
Professionals 37% 50% 13%
White collar 27% 58% 15%
Blue collar 15% 72% 13%
Retirees 23% 62% 15%
* * * * * * * * *

Democrats 25% 63% 12%
Republicans 32% 55% 13%


By contrast, in August 2007, the question drew a much less-hostile response: 48% bad to 42% good. (The rest weren't sure or deemed globalization equally good and bad.) President Bush has done little to ease Americans' anxiety; even some of his own appointees won't defend the administration's rejection of Democratic overtures on shoring up assistance to workers hurt by trade.


So what happens after Inauguration Day? Even Mr. McCain, if eager to press Mr. Bush's trade-pact agenda, would be likely to face a Democratic Congress elected by voters who, though they may shop for imported underwear at Wal-Mart, believe globalization is holding down their wages.


Neither Mrs. Clinton nor Mr. Obama is likely to be able to do much about trade deals already in effect, despite their campaign rhetoric. Neither, even in the heat of the Midwestern spotlight, is talking about new barriers to trade. The Depression-era Smoot-Hawley tariffs aren't coming back. And the Democrats' trade hard-liner, former Sen. John Edwards, has dropped out of the race.


The issue really is about what happens going forward. And the most likely answer on trade is not much. Barring an unlikely breakthrough in the Doha Round of world trade talks, neither Democrat is likely to make trade deals -- even renegotiated to incorporate labor and environmental standards -- a top priority.


The fate of the deal with South Korea will be the most important early test case: It's a big economy, far more significant than Peru or Panama. The new Korean government might be willing to reopen the agreement to save the pact from a Democratic president pledged to oppose it. But even if Mr. Obama wins, the "timeout" on trade deals that Mrs. Clinton proposes is the most likely outcome. And that could turn out to be a route to maintaining good parts of globalization, which would lose an up-or-down vote right now.


The anxiety about globalization among a huge swath of the electorate reflects widespread economic insecurity and a sense that the U.S. economy isn't delivering the goods for many. Tweaking trade deals or adding another program for workers hurt by imports won't salve those fears.

A "timeout" to try to fix flaws in the American health-care system and to streamline and expand worker-assistance programs so they help workers cope both with technology and trade could be the key to preserving the benefits of globalization in the long run.