Understanding the GATT’s wins and the WTO’s woes
The WTO is said to be in a funk – unable to conclude the Doha Round even as its members liberalise unilaterally and regionally. CEPR's newest Policy Insight argues that tactics used to get consensus at the last Round pushed the organisation into decision-making’s “impossible trinity” (consensus, uniform rules, and strict enforcement). A Doha package with something for everyone may be found, thus defeating the impossible triangle. The big-package tactic, however, won’t help the WTO confront 21st century challenges in a timely manner; for that, at least one of the triangle’s corners must be modified.
Show in Editors Choice Box?
, Doha Round
, international trade
APEC and the ‘battle of free trade agreements’
Jayant Menon 10 November 2014
With WTO trade talks on the brink of failure (again), global trade governance is being decided elsewhere. This column argues that China and the US are pushing competing visions for free trade in Asia-Pacific. The US-led Trans-Pacific Partnership, TPP, could be challenged by a China-led ‘Beijing Road Map’ that may be announced at this week’s APEC summit. Neither vision is an end-game but merely one more stroke on an ugly picture of trade agreements characterised by an unsustainable amount of disorder and incoherence.
The race is on between the US and China to dominate the rules-setting game for trade by being the first to be able to announce plans for a free trade area in the Pacific Rim. China hopes to use its position as this year’s chair of the Asia-Pacific Economic Cooperation (APEC) forum to propose a feasibility study on a Free Trade Agreement for the Asia-Pacific (FTAAP), first mooted in 2006. In other words, negotiations towards an FTAAP that would cover more than 60 percent of the world economy would commence, for all practical purposes.
TPP, TTIP, WTO, multilateralisation
G20 credibility depends on its trade agenda: Statement of the participants in the Third EU-Asia Roundtable
Bernard Hoekman, Christopher Findlay 24 September 2014
The evolution of the world trading system no longer supports the delivery of opportunities that follow from innovations in international business. This column is a statement by participants at a roundtable held in the EU Centre for Global Affairs, University of Adelaide, on 22 August 2014, which offers suggestions to improve global trade governance. Given that Australia is hosting the G20 Summit in November, the roundtable focused on actions that the G20 should consider to help attain its objective of boosting global growth performance.
This statement reflects the outcome of an annual trade policy meeting of research institutes in the EU and Asia-Pacific. The roundtable was held in the EU Centre for Global Affairs, University of Adelaide, on August 22, 2014. Given that Australia is hosting the G20 Summit in November, the roundtable focused on actions in the trade area that the G20 should consider to help attain its objective of boosting global growth performance.
EU-Asia Rountable, World Trading System, WTO, Act on Trade Facilitation, G20
Three new leaders face the challenge of food and fuel subsidies: Sisi, Modi, and Jokowi
Jeffrey Frankel 09 September 2014
Subsidies for food and energy are economically inefficient, but can often be politically popular. This column discusses the efforts by new leaders in Egypt, Indonesia, and India to cut unaffordable subsidies. Cutting subsidies now may even be the politically savvy choice if the alternative is shortages and an even more painful rise in the retail price in future. Ironically, it is India’s new Prime Minister Modi – elected with a large electoral mandate and much hype about market reforms – who is already shrinking from the challenge.
In few policy areas does good economics conflict so dramatically with good politics as in the practice of subsidies to food and energy. Economics textbooks explain that these subsidies are lose-lose policies. In the political world, that can sound like an ivory tower abstraction. But the issue of unaffordable subsidies happens to be front and centre politically this summer, in a number of places around the world. Three major new leaders in particular are facing this challenge: Sisi in Egypt, Jokowi in Indonesia, and Modi in India.
Development Energy Politics and economics Poverty and income inequality
subsidies, fuel subsidies, food subsidies, Agriculture, energy, Egypt, Indonesia, India, Poverty, environment, trade, WTO, Doha Round, Bali
WTO trade disputes, big and small
Chad P Bown, Kara M. Reynolds 10 August 2014
WTO dispute settlement is well-known for its high-profile cases – e.g., US-EU clashes over bananas, hormone-treated beef, genetically modified organisms, subsidies to Boeing and Airbus, etc. – some of which cover annual trade in the billions of dollars. Are the trade stakes from such disputes representative of the WTO caseload? This column presents evidence from a newly available data set and reveals some surprising facts about the prevalence of both large and small WTO disputes.
WTO disputes are now a media mainstay. During one week-long stretch in May, reporters from The New York Times, Wall Street Journal, Financial Times, Le Monde, Frankfurter Allgemeine, and even USA Today published articles about ongoing disputes.
WTO, dispute settlement, trade law
Members only: Embracing diversity in the WTO
Bernard Hoekman, Petros C. Mavroidis 16 July 2014
The proliferation of trade ‘clubs’ indicates that governments are keen on engaging in trade liberalisation. This column argues that the creation of new trade clubs under the umbrella of the WTO is inevitable. Such issue-specific (plurilateral) agreements keep the cord with the WTO tight, while allowing countries to cooperate on issues outside of WTO’s grounds.
WTO and … ‘clubs’
WTO, trade liberalisation, plurilateral agreements, PTAs
Why the US and EU are failing to set information free
Susan Ariel Aaronson 14 July 2014
The internet promotes educational, technological, and scientific progress, but governments sometimes choose to control the flow of information for national security reasons, or to protect privacy or intellectual property. This column highlights the use of trade rules to regulate the flow of information, and describes how the EU, the US, and their negotiating partners have been unable to find common ground on these issues. Trade agreements have yet to set information free, and may in fact be making it less free.
Tim Berners-Lee, the architect of the World Wide Web, taught us that the internet we have is a function of the choices we (users, companies, policymakers, etc.) make about information flows. For example, in 1995, Berners-Lee chose not to patent his work on the World Wide Web because he feared patenting it could limit its universality and openness. He continues to advocate this. In March 2014, he called for an online bill of rights and created a new organisation to ensure that the web would remain the “web we want” – open, free, and neutral.
EU policies Global governance International trade
US, EU, WTO, information technology, trade, technology, internet, Human rights, national security, Information, free trade agreements, data protection, privacy
Mega-regionals and the mega-mess: A way out
Jayant Menon 09 June 2014
With the rise of mega-regional trade agreements, the world trade system resembles a jigsaw puzzle. This column discusses the difficulties involved in consolidating free trade agreements at the regional level, and argues that piecing together the blocs around the world will be even more challenging. A potential way forward is to return to the most widely used modality of trade liberalisation – unilateral actions – but this time involving the multilateralisation of preferences rather than unreciprocated reductions in tariff rates.
Jagdish Bhagwati (1991) famously described the maze of overlapping free trade agreements (FTAs) as akin to a ‘spaghetti bowl’. Several decades later, with the rise of mega-regionals like the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership (TPP), the fragmentation of the world trade system more closely resembles a jigsaw puzzle. How do we solve this mess? One approach being pursued is to consolidate bilateral FTAs into regional blocs, and then to try and link the blocs up globally – or at least hope that they will eventually.
Global governance International trade
WTO, trade liberalisation, trade, reciprocity, free trade agreements, Trans-Pacific Partnership, multilateralisation of preferences, mega-regionals, Regional Comprehensive Economic Partnership
TTIP, the multilateral trading system and Latin American countries
Anabel González 29 May 2014
Mega-regional negotiations will underwrite global governance on 21st-century trade issues and facilitate the proliferation of global and regional value chains. This column writes that Latin American countries would gain from a strengthened and effective WTO to help mitigate the friction and fragmentation that may result from the mega-regionals.
A lot is happening in trade negotiations in almost every corner of the world. Countries have been quite active at the bilateral and regional levels for some time – the WTO has been notified of 432 regional trade agreements.
WTO, free-trade agreements, TPP, TTIP
Supply chains, mega-regionals and the WTO: New CEPR book
Bernard Hoekman 19 May 2014
The World Trade Organisation is one of the most successful instances of multilateral cooperation post-WWII. Yet WTO negotiators have yet found a way to break the recent deadlock on key elements such as the market access and rule-making dimensions on the agenda since 2001. This column introduces a new CEPR book that suggests the adoption of a ‘supply chain framework’ that could help to mobilise greater support for concluding the Doha Round and provide a basis to use the WTO as a forum for learning from regional initiatives.
In December 2013, WTO members struck a multilateral agreement at their ministerial meeting in Bali as part of the long-running Doha Round. The Bali Trade Facilitation Agreement – the first such agreements since the WTO was founded in 1995 – is important in demonstrating WTO members can ‘get to yes’ despite their differences. While trade facilitation will benefit traders around the globe, the basic challenge confronting WTO negotiators remains.
WTO, supply chains, free-trade agreements