Today's IHT has an interesting letter from Pascal Lamy to the trade ministers. He includes the following:
The pity in all of this is that what is on the table now constitutes greater progress in rolling back farm subsidies and tariffs than anything seen before in global negotiations. Even the least ambitious proposals would have cut trade distorting farm subsidies by two to three times the previous round of talks. Export subsidies would have been eliminated. For the first time members would have limited fishery subsidies, which contribute to the depletion of our oceans.
The vast majority of exports from the very poorest countries would have faced no barriers to trade, and practices that had crippled African cotton farmers would have been substantially reformed.
A large part of the debate, and the allocation of blame, seems to hinge on the relative equivalence of the proposed cuts in tariffs and subsidies, respectively. But Lamy's main concern, and that of The Economist's story, is that states are taking a defensive, mercantilist, position. This from The Economist:
Old hands need to look with new eyes, for this week's debacle constitutes the biggest threat yet to the post-war trading system. It marked the trade diplomats' surrender to the confidence trick on which the system is founded. And it betrayed a reckless disregard for the value not just of the Doha round, but also of the smooth working of world trade.
The confidence trick referenced is the mercantilist idea that states need to be compensated for reducing their own barriers to trade.
