12:00 AM, Dec 14, 2013 • By IRWIN M. STELZER
Free traders are ecstatic. Negotiators at the 9th World Trade Organization ministerial conference in Bali cheered, hugged, and wept at what they see as the successful culmination of their recent round of talks. “A giant step for businesses large and small,” enthused the CEO of UPS. The well-regarded Fung Business Intelligence Centre announced that the agreement among the 159 WTO members “will not only restore confidence in the multilateral trading system, but also boost world GDP by nearly $1 trillion and generate 21 million jobs.”
“Joy unbounded, with wealth surrounded,” to borrow from Gilbert and Sullivan. The joy is easy to understand. Any agreement reached after years of bickering takes on out-size proportions, witness the joy last week when Democrats and Republicans reached a budget agreement. Never mind that the Ryan-Murray deal can have little fiscal impact. From little compromises mighty agreements of consequence grow seems to be the general belief. The fact of deal is more important than the facts in a deal. Hence the joy unbounded in Bali and, separately, here in Washington.
Unfortunately, joy unbounded will not necessarily leave us “with wealth surrounded.” The WTO agreement is a modest one, aimed primarily at facilitating the cross-border movement of goods by reducing customs delays at national borders. Richer countries will provide less developed ones with resources with which to train border agents and, presumably, reduce their temptation and ability to look to bribes to supplement their meagre incomes. All to the good. But I am reminded of a British economist, who shall remain nameless lest his superiors at the international agency to which he has been seconded demonstrate that in their circles candor is not widely appreciated. He warned me that estimates of the economic effect of trade deals are handed down from above to staff economists who only then develop data-laden reports to support their bosses’ press releases.
The fact is that the trade facilitation deal just reached in Bali is of little real consequence, other than as proof that minor deals can be reached. The Wall Street Journal’s description throws a bit of cold water on the celebrants, “A scaled-back package…, a modest break-through in the trade discussion that began in 2001 in Doha, Qatar….[It] still needs formal ratification by all 159 WTO members and could take months, or even years, to come into effect.”
The real action is at the regional or bilateral level, rather than at the WTO global level. Add up all the demands for protection by important voting blocs in every member country, and you have a prescription for paralysis. Reduce the number of negotiators and you reduce the special interests being catered to, and increase pressure on those nations not unenthused about a deal, but fearful that remaining outside of the tent might disadvantage them in the region.
Regionalization produces an alphabet soup of trade deals:
· Nafta, the North American Free Trade Agreement that reduced trade barriers between the US, Mexico and Canada, will mark its 20th anniversary on January 1 of the coming year. Mexicans plan to celebrate, American politicians, especially Democrats whose then-leader President Bill Clinton signed the deal that its critics claim cost 700,000 America jobs, are hoping voters won’t notice the anniversary.
· TTIP, the Trans-Atlantic Trade and Investment Partnership, a deal that would remove some of the non-tariff barriers (tariffs are already low) to trade and investment between the US and the EU. Auto makers are keen to harmonize safety regulations in the US and EU, leftish Democrats are keen to maintain a good distance between America’s tougher banking regulations and the weaker ones that might emerge from harmonization.
· TPP, the proposed Trans-Pacific Partnership between the three NAFTA members and 9 countries in the Asia-Pacific region. If successful this would cover about 40% of US imports and exports.
· CAFTA-DR, the free trade deal between US, on the one side, and Central American countries and the Dominican Republic on the other hand.
· AGOA, the trade pact between America and the sub-Saharan African countries, due to expire in 2015 unless congress responds favorably to President Obama’s request to renew it.
9:01 AM, Jul 23, 2012 • By GEOFFREY NORMAN
Peggy Noonan examines the mini-furor over the manufacturing of the U.S. Olympic team's uniforms in ... China. It was, she believes, a missed opportunity to create a sensational political ad:
12:00 AM, Feb 4, 2012 • By IRWIN M. STELZER
Some fear America is about to go protectionist. Others fear it won’t. Where you stand on this issue depends on where you sit. Sit in the chair of the CEO of a major exporter, and you fear protectionism and the ever-rising spiral of retaliations. Sit in the chair of the president of a trade union, and you welcome what others call protectionism and you call fair trade. Sit in the chair of a Wal-Mart customer and you fear anything that will drive up prices, putting pressure on your over-stretched budget.
Colombia has become one of the most promising economies in the Western Hemisphere.9:00 AM, Oct 31, 2011 • By JAIME DAREMBLUM
On October 21, President Obama signed into law the U.S.-Colombia free trade agreement (FTA), thereby giving American exporters greater access to one of South America’s fastest growing markets. The long, tiring debate over the FTA—which began five years ago, when the agreement was first completed—showed that popular perceptions of Colombia are stuck in a time warp. Not only has the country become a much safer and less violent place than it was in the 1980s, 1990s, and early 2000s, it has also become one of the most promising economies in the Western Hemisphere.
12:41 PM, Oct 12, 2011 • By MICHAEL WARREN
During Tuesday night’s debate in New Hampshire, moderator Karen Tumulty challenged Mitt Romney on his recent tough talk on China. Romney says China is a “currency manipulator” and argues that, by setting unfair prices and allowing the theft of American intellectual property, the Chinese government is cheating world markets and must be held accountable
1:00 PM, Sep 6, 2011 • By MARK HEMINGWAY
For a while now, Obama's been mentioning in speeches that there are free-trade agreements that need to be ratified as away to create jobs and spur growth... while blaming Republicans for the hold up.
4:25 PM, Apr 9, 2011 • By PATRICK CHRISTY
The Obama administration finally announced earlier this week an agreement on the Colombia Free Trade Agreement, paving the way for its ratification. The Colombia FTA is long overdue, and President Obama’s change of heart is a welcome step for America and Colombia alike. As the White House notes, American workers will immediately benefit from the agreement:
2:18 PM, Feb 25, 2011 • By PATRICK CHRISTY
Despite high unemployment, the Obama administration has been slow to come up with an effective trade policy. It’s seemingly been trying with Colombia, Panama and South Korea, but its lack of success is startling.
5:00 PM, Feb 11, 2011 • By JOHN NOONAN and PATRICK CHRISTY
It is, in a way, unsurprising that the president gave Bogota a brief nod during his State of the Union address. After all, In 2010 State of the Union address, the president claimed, “we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia.” And, in 2009, President Obama told Colombian president Alvaro Uribe that he was “confident that ultimately we can strike a deal that is good for the people of Colombia and good for the people of the United States.” Yet, no such deal has been struck.
Beijing plays chess; America plays tiddlywinks.Jan 17, 2011, Vol. 16, No. 17 • By IRWIN M. STELZER
China’s president, Hu Jintao, is about to make a state visit to Washington, hard on the heels of a statement by Liang -Guanglie, his defense minister, that “in the next five years our military will push forward preparations for military conflicts in every strategic direction.” Not quite Nikita Khrushchev’s “We will bury you,” but close enough to give President Obama good reason to reset our overall policy towards the Chinese regime, including abandoning the outdated notion that trade is only about economics.
12:50 PM, Nov 15, 2010 • By DANIEL HALPER
Former Republican presidential candidate John McCain had some sharp words about President Barack Obama’s policy toward Afghanistan earlier today at a conference in Washington.
9:03 AM, Nov 12, 2010 • By DANIEL HALPER
Steve Hayes, with A. B. Stoddard and Charles Krauthammer, last night on Fox News:
India.11:42 AM, Jul 19, 2010 • By JAIME DAREMBLUM
In recent years, Latin America’s trade with India, the world’s largest democracy, has grown much more slowly than its trade with China. However, the Latin Business Chronicle notes that “an increasing number of Indian companies are now looking at Latin America as the ‘next frontier.’”
Good news for South Korea, but what about Colombia and Panama?7:30 AM, Jul 1, 2010 • By JAIME DAREMBLUM
Speaking to reporters at the G-20 summit in Toronto, President Obama declared his intention to complete the U.S.–South Korea free-trade agreement, which was signed by the Bush administration three years ago. “I want to make sure that everything is lined up properly by the time I visit Korea in November, and in the few months that follow that, I intend to present it to Congress,” Obama said. “It is the right thing to do for our country, it is the right thing to do for Korea.”