Kirk Suggests No Backtracking on Doha

Posted by: Steve LeVine on May 18

U.S. Trade Representative Ron Kirk today made official a position that’s leaked out the last couple of weeks: The Obama Administration will pick up where its predecessor left off in negotiating a new global trade agreement, and not demand that already-decided matters be re-opened.

The posture is important because after the so-called Doha round of trade talks collapsed last July, many experts despaired that seven years of work had gone for naught. The thinking was that global trade accords are so complex that they are a relic; the future would be bilateral or regional agreements.

But now, the U.S., Canada and Australia are leading an effort to revive Doha. Over the last couple of weeks, President Barack Obama and Kirk have both said publicly that the administration is looking for a “way forward” with Doha.

The reason appears to be economic – the U.S. and other western countries need an engine of growth, and trade will be a critical component of that.

In Geneva last week, Kirk privately told World Trade Organization director Pascal Lamy that the U.S. would not seek to rewrite what’s already been agreed on Doha, according to officials familiar with the discussion. Today, Kirk repeated it publicly: “We are not asking that the round start over, or to discard the hard work that’s been done,” Kirk told a luncheon crowd at the U.S. Chamber of Commerce in Washington, D.C.

I had a seat in the back of the hall and shot a short clip of Kirk. Apologies for the quality, but it’s worth watching.

Kirk also confirmed that U.S. and Panamanian trade teams have been “furiously” working to complete talks on a bilateral trade agreement between the countries. An agreement was reached during the Bush Administration, but wasn’t approved by Congress. Kirk said labor and tax issues still divide the sides. He said he couldn’t estimate when a completed agreement might be ready for consideration by Congress, but experts have said that the administration wants to submit it this summer.

In addition, Myron Brilliant, senior vice president of international affairs at the Chamber of Commerce, said he’s optimistic of a Panama agreement gaining congressional approval. “I feel very confident that there will be strong bilateral support,” he told reporters today before the Kirk speech.

The U.S. is also seeking to finish Bush-era bilateral trade agreements negotiated with Colombia and South Korea, Kirk said.

Kirk hinted at the work he has ahead of him on bridging the wide U.S. political divide on trade – in general, big corporations favor trade liberalization, while smaller manufacturers and labor unions are skeptical. He urged the competing sides to start talking civilly. “It’s time to lay down our arms, come out of our bunkers, and start supporting important initiatives on their merits, not reject them for tradition’s sake,” Kirk said.

But the trouble faced by him and Obama was made immediately clear. Just hours after his speech, Frank Vargo, vice president of international economic affairs at the National Association of Manufacturers, distributed a sharply worded letter in which he said that Doha “is a reciprocal trade negotiation, not a donor's conference.”

Vargo suggested that Brazil, China and India haven’t yet agreed to product openings needed to improve U.S. trade flows. “While less than full reciprocity certainly can be expected from the less developed countries, a high degree of reciprocity must be expected from the advanced developing countries that are now major exporters of manufactured goods,” Vargo said.

In another development, India’s Congress Party won a sweeping victory in weekend parliamentary elections, opening up the possibility of greater flexibility on Doha. Doha’s collapse occurred after India insisted on special new protections for its agricultural sector, and many experts at the time said that Indian Trade Minister Kamal Nath might have assumed a hard-line position because of Congress’ domestic political challenge.

Arvind Subramanian, a trade expert at the Peterson Institute of International Economics in Washington, said of the Congress victory that “at the very least it is not bad news, and probably good news” on trade.

Yet Subramanian urged caution. “Don't expect Doha or trade liberalization to be high on the reform agenda of the new government,” he said in an email exchange. “In other words, the new government will be less recalcitrant but not necessarily more proactive on Doha.”