Global News Journal
Beyond the World news headlines
Just as the World Trade Organisation is organizing an intensive push to complete the Doha round trade talks, the atmosphere among negotiators is as pessimistic as it ever has been.
Even WTO chief Pascal Lamy says that Doha – already the longest running trade round – will not meet the latest 2010 deadline set by G20 leaders unless governments really instruct their negotiators to make the necessary compromises, and negotiators start to put those compromises down on paper.
Lamy, who suspended the round in 2006 but has led a renewed push for the last three years, and others point to the enormous progress made towards a deal in eight tortuous years.
Former Mexican President Ernesto Zedillo has an original view on protectionism.
Instead of promising not to raise barriers to trade (and quietly ignoring their pledges), leaders should hit back hard with all the legal means available at any country trying to use protectionism to shield itself from the crisis at the expense of others.
Zedillo, who steered Mexico through the 1994/95 “Tequila crisis” and the 1997/98 Asian crisis, compares this to the doctrine of Mutually Assured Destruction that kept the nuclear peace during the Cold War.
Trade protectionism -- or at least the threat of it -- has raised it head as the global economy has declined, bringing with it all the historical fears about the Great Depression. Consider the flurry of concern about a "Buy American" clause in one of the U.S. stimulus bills.
It is traditionally assumed that widespread protectionism would most hurt the biggest economies, the United States and Japan. But Barclays Capital analyst David Woo says this is not so and that Russia, Canada, Australia and Sweden are the most vulnerable.
Few politicians so far are calling for protectionism.
Among economic and diplomatic policy-makers, openly advocating protectionism is about as socially acceptable as promoting child pornography.
So how to explain the slew of tariff hikes, export subsidies, non-tariff barriers, stimulus packages and bailouts — highlighted in a report at the World Trade Organisation – which all have the effect of slowing imports, boosting exports and generally promoting jobs at home at the expense of competitors?
IMF chief Dominique Strauss-Kahn said on Monday that the Fund could cut its forecast for China’s economic growth in 2009 to around 5 percent. To think that only last year China was galloping at a double-digit clip. It’s staggering, and it’s worrying.
Worrying, for one thing, because - as the Heritage Foundation’s Derek Scissors puts it - ”the American economic slump is running into the Chinese economic slump, creating the conditions for a face-off between Beijing and the U.S. Congress, possibly leading to destabilization of the world’s most important bilateral economic relationship”.