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Funny how at the World Trade Organization, last-ditch attempts to reach a deal become penultimate-ditch attempts after talks break down. Before its end-of-June meeting in Geneva, WTO director general Pascal Lamy said negotiations in the Doha Development Round — which aims to bring developing countries more fully into the global-trade fold, and is now two years behind schedule — faced "the moment of truth." But after the talks ended, days earlier than they were supposed to, Lamy said none of the WTO's 149 members "appears to want to throw in the towel."
That is a remarkable statement, judging by the behaviour of Kamal Nath, India's commerce minister, who arrived late for the talks — he was reportedly delayed watching the World Cup match between Germany and Argentina — and walked out early. And no amount of optimism will alter the WTO's one truly immovable deadline: July, 2007, when U.S. President George W. Bush's fast-track trade negotiation authority expires. Between then and now, the WTO faces a logistical and political nightmare laying the groundwork needed to get the thing through U.S. Congress — and that's only if a deal emerges.
As it stands, the lines in the sand in the Doha round remain. The European Union, the United States, Canada and other developed countries — which supported their farmers to the tune of US$287 billion in 2005, according to the OECD — have not offered to reduce agricultural trade barriers or cut enough subsidies to farmers to get developing countries onside. For their part, developing countries have not pledged to open up their markets enough to satisfy developed countries. There are now two likely outcomes: the talks collapse and the Doha round ends in failure, or members reach a severely watered-down deal, allowing developed countries to continue absurd levels of agricultural protection while letting developing countries shelter their economies from freer trade — and its many benefits.
For Canada, neither is a salutary outcome. The much-needed opening of markets for our manufacturers, service industries and non-supply-managed farmers will be aborted, while larger, more powerful countries will move fast to sew up plurilateral trade deals, in which Canada may be second fiddle, or have no role at all. Not one to wait around for the WTO, the United States renewed free-trade talks with South Korea, in early July.
Is there hope for global freer trade? Maybe. But there is a pressing need for the business community to seize the agenda from special interest groups and convince consumers — who pay for market protections through higher taxes and higher prices — that liberalization is worth any short-term pain. Meanwhile, Canada needs to get attuned to the world of small-trade deals. It will have to strengthen its most significant one, NAFTA, by working with the United States and Mexico to eliminate remaining regulatory and logistical barriers at our borders. And it will have to pursue new agreements with other jurisdictions.
Free trade with Japan is one tantalizing prospect. Of course, an FTA with Canada's second-largest trading partner is not a new idea, and Japanese Prime Minister Junichiro Koizumi was reportedly cool to the prospect during his recent visit to Ottawa. But that's no reason not to give it the old college try. After all, when it comes to trade negotiations, hope, if not political courage, is in constant supply.
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