So Near and Yet So Far
In many examinations, 90% is an excellent score, deserving a prize and a handshake from the head. In Geneva this week, only full marks would do, and the world’s trade ministers failed. No matter that they came closer to a deal than anyone should have expected. No matter that they stuck at it for nine days and several nights, in the longest ministerial meeting in the history of the World Trade Organization (WTO). No matter, too, that this time they parted in stunned disbelief, heads shaking, rather than in acrimony(刻薄), quarrel and spite, as at Cancun in 2003. They managed "convergence" on 18 of the 20 topics set before them by Pascal Lamy, the WTO’s director-general, but they stumbled on the 19th, a device for protecting farmers in developing countries against surges in imports. They never reached the 20th, cotton. Failed.
You can construct a plausible argument that the collapse of yet another set of talks on the Doha round, which is now coming up to seven years old, is of little importance. While the world’s trade ministers have alternated between talking and not talking to one another about Doha, the world’s businesspeople have carried on regardless: the growth of global commerce has outstripped the hitherto (到前为止) healthy pace of global GDP. Developing countries in particular have continued to open up to imports and foreign investment. You might say that not much was on offer in Geneva anyway: one study put the ual benefits at maybe $70 billion, a drop in the ocean of the world’s GDP. Global stock markets, with so much else on their minds, either didn’t notice or didn’t care. On July 29th, the day the talks broke up, the S&P 500 index rose by 2.3%.
Plausible, but wrong. For a start, the lowish estimates of the economic benefits of the round miss out two things. One is the value of the unpredictable dynamic benefits of more open markets. Access to more customers allows exporters to exploit economies of scale. Competition encourages not only specialization, the classic result of more open trade, but also increased productivity. The other is what you might call the" option value" of the Doha round. The WTO inhabits a sort of parallel universe in which countries negotiate not on what tariffs and subsidies will actually be, but on maximum (or" bound") rates and amounts. Although many countries have cut tariffs and farm. subsidies -- if only, in the latter case, because of rising food prices -- too few have turned these cuts into commitments. Tighter binding would cramp their ability to turn back to protection. It would have made up the bulk of a Doha deal.
Do you care about the beans or the beings
Also on offer were benefits that are easier to visualize. Some cuts in bound tariffs would have bitten into actual rates. There would have been much less" tariff escalation(增加)" -- a nasty practice, by which higher tariffs are levied on successive stages of production. Raw coffee beans may be tariff-free, but roasted beans incur a higher levy, and so on as they are ground, getting rid of caffeine and so forth. Move up the value chain, and you pay. Some developing countries -- in Latin America, especially Brazil, and in Africa too -- are seething that a deal slipped away.
Given all this, the inability of ministers to agree, having come so close, seems unfathomable(难解 ). Belief is all the more beggared when you look at the wider world. The global economy is slowing, possibly horribly: under such conditions, protectionism thrives. It would be silly to say that the sky is about to fall in: too much has been agreed in the past, and too many countries and businesses value an open trading system, to suppose that the 2010s will be a rerun of the 1930s. But trade has too few friends these days -- notably in America’s Congress and the Elys6e Palace. Ministers picked a poor time to fail.
The ultimate cause of failure only deepens the sense of puzzlement. When talks started, the likeliest deal-breaker seemed to be the ceiling on American farm subsidies, which is far higher than America actually spends. In the end, the deal fell over protection not for America’s farmers but for those of the developing world: a "special safeguard mechanism", to kick in when imports surged. America wanted the trigger set high; India, joined by China, wanted it low. Both developing countries, it is said, also wanted to be able to jack tariffs up above existing ceilings, not merely those set in a Doha deal. After 60 hours of talk by Mr. Lamy’s count, there was deadlock; and that was that. Meanwhile, believe it or not, food is pricier than ever.
India’s mountain ,America’s molehill
You could call this "a collective failure", as some ministers did. You could also be more specific. India’s willingness to open its economy in reality is in lamentable contrast to its inability to commit itself at the WTO. Its stubbornness is explained by the ferocity of India’s politics on this subject and the desperate, even suicidal, poverty of many of its farmers. But it and China must have known that they were asking too much.
America has some answering to do, too. It seems to have misread the big story: in the WTO, rich countries no longer call the shots, as they did in its predecessor, the General Agreement on Tariffs and Trade. China and India, infuriating though they may be, are as powerful as America and the EU. The United States also fumbled with the details. It might have tied up a deal on cotton, and left the Chinese and Indians isolated on safeguards. And the ultimate stumbling-block, though a mountain to India, was surely a molehill to a country of America’s wealth. America has 1 million farmers, India over 200 million.
In the WTO, there is a saying: nothing is agreed until everything is agreed. But all the effort of nine days -- or seven years -- should not be lost. Mr. Lamy should publish what has been agreed so far. Ideally, the ministers would then meditate over the summer on what they have lost -- and he could then ask for a final push. That, alas, seems a vain hope. With American elections looming, India heading for the polls by next May and a new European Commission due late next year, it may be 2010 before much can be done. There is a risk that by then, as Peter Mandelson, the EU’s trade commissioner, once put it," the caravans have moved on in different directions". The world will have to wait for a Doha deal, if it ever gets one. After coming so close, it should not have had to. The S&P 500 index rose by 2.3% on July 29th as a result of ______.