I don't know what's going to happen at the Bali Ministerial this week. I'm not very good at predicting these things. But whatever happens, I probably won't be all that excited one way or the other. That's because the issues they are talking about are, in my view, relatively unimportant. The major topics at Bali have little to do with putting constraints on economic nationalism and protectionism, which, to me, is the core of the world trading system.
That's not to say Bali is irrelevant. Trade facilitation is a good idea. But it just seems like common sense, rather than a major reform.
And a big part of the Bali agriculture talks is about making room for more subsidies. But aren't trade talks supposed to reduce subsidies?
I would be a lot more enthusiastic about all of this if there were some big trade liberalization proposals on the table. But there aren't, and unless some of the major trading countries decide to make these proposals, there won't be any time soon.
So what I would like to see? Here are two examples.
First, the Economist recently noted that: "A post-Bali agenda would almost certainly include a binding schedule for elimination of rich-country farm subsidies". That would be a great agenda, one that would get me excited. But why is that a "post-Bali" agenda? Why not put that on the agenda now? Along the same lines, my friend Simon Lacey says something similar:
Ultimately, the WTO will have to again turn to hosting real negotiations on the tough political economy trade-offs required to dismantle the entrenched agricultural welfare states that have been allowed to establish themselves in places like the EU, the US, Japan and Korea over many decades. But for now we are talking about lighter issues under the heading of trade facilitation.
Exactly. And it's worth noting in this regard that while many people tout the TPP, TTIP and other regional talks as the way forward, my understanding is that these negotiations don't deal with agriculture subsidies either (and that may actually be a big part of why the U.S. and EU are pursuing the regional approach, so they don't have to talk about these subsidies).
Second, how about dealing with anti-dumping? Here's a suggestion from Sweden's National Board of Trade:
The replacement of anti-dumping measures with competition rules in regional trade agreements, if successful, may ultimately be regarded as a stepping stone and an example to follow at the multilateral level. ‘Unfair competition’ should be addressed by efficient competition rules rather than by the use of anti-dumping measures.
Obviously, replacing anti-dumping measures would be a radical -- albeit sensible -- proposal. But isn't there room for a little bit of reform here? There are so many things about anti-dumping that are problematic. Can't we agree on doing something? As with agriculture subsidies, the TPP and TTIP ignore these issues as well.
The news focus around Bali seems to be whether the WTO can achieve a "deal." But the content of any deal is more important than whether there is a deal. Unless we put the big issues on the table, the whole enterprise doesn't inspire me all that much. Whether these and other big issues are addressed depends on whether the economic powers of the world decide to take trade liberalization seriously. I haven't seen many indications in recent years that they do, but I wish they would. Politically, it would be challenging; but in terms of economics, it would really help.
