Global free trade ne­go­ti­a­tions col­lapse

Pact had po­ten­tial to boost world econ­omy by $1 tril­lion per year

The Washington Times Daily - - Business - BY JOHN HEIL­PRIN

GENEVA | Ne­go­tia­tors came close but failed Tues­day to clinch a free-trade deal that could have helped boost the world econ­omy by $1 tril­lion a year and cleared the way for a broader global agree­ment.

Diplo­mats from the World Trade Or­ga­ni­za­tion’s 159 mem­bers had been try­ing to forge an agree­ment be­fore a trade min­is­ters’ meet­ing next week in Bali, In­done­sia. Achiev­ing a deal in Bali is seen as a fi­nal ef­fort to re­vive a broader 12-year ef­fort to ease global trade rules.

The mini-deal dis­cussed in Geneva had been in­tended, in part, to re­duce de­lays and in­ef­fi­cien­cies at na­tional borders. Mak­ing it eas­ier to move goods across borders could boost the global econ­omy by nearly $1 tril­lion a year and sup­port 21 mil­lion jobs, ac­cord­ing to a re­port co-writ­ten by Jef­frey Schott, a se­nior fel­low in in­ter­na­tional trade at the Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics.

The lack of a global deal hasn’t pre­vented in­di­vid­ual coun­tries from seek­ing agree­ments among them­selves. But an­a­lysts say the fail­ure to reach a global deal leaves poorer coun­tries worse off.

“This should be a no-brainer for de­vel­oped and de­vel­op­ing coun­tries,” Mr. Schott said.

Deputy U.S. Trade Rep­re­sen­ta­tive Michael Punke ex­pressed “a great deal of sad­ness” over the fail­ure in Geneva.

“We’re wor­ried — along­side so many in this room — that a once-in-a-gen­er­a­tion op­por­tu­nity may have slipped our grasp,” Mr. Punke said.

Mr. Schott said he’s hope­ful that ne­go­tia­tors will sal­vage the deal in Bali and res­tore the ef­forts to achieve a broader trade agree­ment.

“If this small test can’t be passed, there’s very lit­tle rea­son for con­fi­dence” ne­go­tia­tors will ever reach the broader agree­ment, he said.

Some poor coun­tries are de­mand­ing eco­nomic and tech­ni­cal as­sis­tance be­fore they sign on. In­dia is hold­ing up a deal by in­sist­ing on pro­tec­tions for its farm­ers.

The WTO chief, Roberto Azevedo, said so much dis­agree­ment re­mains that sev­eral more weeks of ne­go­ti­a­tions can­not bridge the gaps.

“Hold­ing ne­go­ti­a­tions in the short time we’ll have in Bali would be sim­ply im­prac­ti­cal with over 100 min­is­ters around the ta­ble,” Mr. Azevedo said.

Ne­go­ti­a­tions to­ward a broader global trade deal be­gan in Qatar in 2001, and the ag­o­niz­ing pace of talks frus­trated Mr. Azevedo’s pre­de­ces­sor, Pas­cal Lamy.

Still, some de­vel­oped coun­tries are seek­ing to reach side deals. The Euro­pean Union, for ex­am­ple, has signed free-trade pacts with South Korea and Canada. The EU is also hold­ing sep­a­rate talks with the United States and Ja­pan.

But Mr. Azevedo said the fail­ure to reach a global deal par­tic­u­larly hurts poorer coun­tries.

It also hurts the WTO’s cred­i­bil­ity. Mr. Azevedo said he wor­ries that the WTO will be seen only as a trade court and no longer as a fo­rum for gov­ern­ments to ne­go­ti­ate trade agree­ments.

“We will fail not only the WTO and mul­ti­lat­er­al­ism,” he said. “We will also fail our con­stituen­cies at large, the busi­ness com­mu­nity and, above all, the vul­ner­a­ble among us. We will fail the poor world­wide.”

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