Addressing the recent World Trade Organization conference in Cancun, Mexico, Yale Center for the Study of Globalization Director and former Mexican President Ernesto Zedillo GRD ’81 said the United States and Europe were at fault for the failure of the negotiations.
“The fundamental cause is Europe and the U.S. are not being serious yet in these negotiations,” Zedillo said.
Speaking Sept. 26 at a roundtable discussion entitled, “Is the WTO Doha Round Dead? The Causes and Consequences of the Collapse of the Cancun Global Trade Talks,” Zedillo was joined by Columbia economics professor Jagdish Bhagwati and Yale economics professor T.N. Srinivasan. The talk, sponsored by the globalization center, also featured Eugenio Diaz-Bonilla, the executive director for Argentina in the Inter-American Development Bank. Moderated by Yale Center for International and Area Studies Director Gustav Ranis, the discussion focused on the challenges facing proponents of global multilateralism and trade liberalization.
Pointing to high barriers to agricultural trade in developed countries — including protective tariffs and heavy government subsidies — the panelists agreed that the central failure of the Cancun talks lay in the uncompromising attitudes of richer nations toward lowering these barriers.
“We need to reduce barriers to trade,” Bhagwati said. “Institutions to support liberalization have not developed in third world countries.”
The current round of negotiations, which began in November, 2001, at Doha, Qatar, has been plagued by disagreements.
Zedillo said the United States damaged its credibility when, despite pledging its support to the Doha round, it still adopted the Farm Bill and new steel tariffs, both of which serve as barriers to free trade.
“When the situation became critical, we had a foolish decision on the part of the U.S.,” Zedillo said. “I don’t understand this decision. Either they were not interested in the round or they were simply incompetent.”
Zedillo said agriculture will continue to be the bone of contention in the negotiations and could ultimately lead to their collapse. He said in order to prevent such a failure, the talks should focus on the bigger issues at hand.
“If agriculture is not negotiated in proper terms, there will be no future for the Doha round,” Zedillo said. “My advice would be for a little while they should not negotiate on little issues.”
Diaz-Bonilla said if the negotiations end up failing, all countries will be worse off economically.
“It will be a lose-lose situation for everyone,” Diaz-Bonilla said.
Srinivasan expressed optimism for the future of the WTO, likening the Cancun talks to a midterm course correction.
“I don’t think the failure of Cancun means the failure of the WTO as an organization,” Srinivasan said. “The meeting itself was not meant as a negotiation. It was more like a midterm course correction giving a boost to the negotiation. Just because the boost has not happened doesn’t mean the rocket has fallen to the ground. There is no reason to be pessimistic.”
Zedillo said the negotiations are not likely to be completed any time soon, especially in light of American domestic issues looming on the horizon.
“I cannot see politically how the U.S. can go back with a proposal without creating a political uproar for the [President George W.] Bush 2004 campaign.”
New Haven resident Sushil Kambampati said the discussion was interesting, if not enlightening.
“I don’t think there was any new information, but it was interesting to see the people intimately involved in the discussions come here and dissect what happens,” Kambampati said.