NS3040 Fall Term 2014 US/WTO Doha Round

U.S. and the Doha Round Jeffrey Schott, “What Should the United States Do About Doha?” Peterson Institute for International Economics Doha round remains stalled Major nations have not revised their positions enough to propel new negotiations on agriculture, manufactures and services Little chance for signing in near future Schott wants to clarify policy options and then make a recommendation over course of action He wants this to be consistent with: near-term political constraints and the objective of advancing world trade and economic development 2

Doha Round: U.S. Options I Options fall in three broad categories: First option – declare victory and sign the deal “on the table” Idea is to avoid at all costs stigma of a failed round – the first one ever Deal endorses formula for tariff cuts plus reductions in agricultural subsidies Problems: Prospective gains are too small and skewed towards too few countries Gains for the U.S. $7.6 billion in increased exports $14.3 billion in increased imports. GDP rises by$9.3 billion 3

Doha Round: U.S. Options II Problem – overall gains relatively small For some producers loss of protection or subsidy would hurt – would strongly lobby Congress against signing. China the big winner at expense of most other trading nations Second option -- pull the plug. Declare the round a bust and go home. Recognizes the lack of political will and leadership and considers further efforts a waste of time Problem – Doha’s failure might make it very difficult to begin another round in the future Might also take a toll on the WTO dispute settlement process -- countries might see this as de-facto rule setting. 4

Doha Round: U.S. Options III Third Option – recognizes that talks cannot conclude in current environment and that Doha round needs a “time-out.” Avoids blame for killing the round while recognizing that in current political climate, an agreement is unlikely Main problem – talks might go into hibernation and never wake up. Need to make it clear what needs to be done and the benefits associated with an agreement. Schott feels the U.S. needs to keep open the multilateral option while accelerating bilateral and regional initiatives The former requires making a down payment (in the form of provisional implementation of specific reforms) on a future Doha package Specifically U.S. and other major trading nations need to make a down payment on a future package of WTO accords that is more balanced and ambitious than what is currently on the table Provides list of specifics. 5