The ChamberPost

Kirk's First Geneva Trip a Success

by Christopher Wenk

Without question, USTR Ambassador Ron Kirk's first trip to Geneva was a success. While it was clear he did not come to Geneva to lecture WTO member countries about substance, he won big points for style and charisma. His presence in Geneva was very well received.

Myron Brilliant and I were lucky enough to be in Geneva at the same time as Ambassador Kirk. It was interesting for us to meet with WTO country Ambassadors after they had met with Kirk. We heard the following words to describe Kirk: "engaging", "thoughtful" and "charismatic". Bottom line is that Kirk has earned some goodwill from many of the key trade stakeholders in Geneva. That goodwill will be very important as countries try and come together to find a way forward on the stalled Doha Round.

Ambassador Kirk spoke to some reporters before he headed to the airport to get on the same new direct United Geneva-Dulles flight that I am on. He was cautious, but clear that US leadership alone is not sufficient to get the Round back on track. He was also clear that new ideas are going to be needed if we are going to reinvigorate Doha.

Ambassador Kirk can share more about his thoughts on Doha and his Geneva trip when he speaks at the Chamber on Monday May 18. His big speech is 5 days away.

Kirk's Presence Alone in Geneva is Significant

by Christopher Wenk

After making the rounds with various WTO country Ambassadors ranging from Brazil, EU, China to WTO officials Monday in Geneva, one theme was constant throughout the day. While Geneva stakeholders understand that the Administration is still undertaking their review of Doha, they all stressed that USTR Ambassador Ron Kirk's first visit to Geneva was significant in itself. People are very happy that he is here to meet firsthand with the Ambassador's who have been working on the Round for several years.

"The world has given us an opportunity to reset our relationships with a lot of our partners, so this is as much an opportunity for me to hear their perspectives as much as to share my own," Kirk told reporters as he arrived for talks at the World Trade Organization (WTO) in Geneva on Monday morning.

There are still some key sticking points about how and when to restart the negotiations, including an idea being floated around to proceed directly to scheduling commitments on agriculture and industrial goods (NAMA) and bypassing "modalities", but Kirk's presence in Geneva is creating a big buzz in itself.

My trip to Geneva will continue tomorrow, including meeting with the chairs of the key negotiating groups: Agriculture. NAMA and services.

More importantly, Ambassador Kirk's trip to Geneva will continue tomorrow when he is expected to meet with WTO Director General Pascal Lamy and EU Trade Commissioner Catherine Ashton among others.

Buzz Buzz.

In Geneva to Assess Doha Round

by Christopher Wenk

It is fitting that the Chamber's Senior Vice President for International Affairs Myron Brilliant and I arrived in Geneva, Switzerland on the same day that the lake-side city was hosting the 5th Geneva Marathon. The purpose of our trip is meet with key WTO officials and country delegations to assess where things stand in the on-going Doha Round of World Trade Organization (WTO) negotiations, which began in November 2001. Doha is the ultimate trade negotiating marathon relay, which in the U.S. case has seen the baton pass from USTR Bob Zoellick to USTR Rob Portman to USTR Susan Schwab to USTR Ron Kirk. It is also fitting that Ron Kirk is also in Geneva right now as well for the first time as the Obama Administration's chief trade negotiator. Without question, Kirk will be pressed to elaborate on comments he made on April 23, 2009 to the Georgetown University Law Center:

In the coming weeks, we will say more about how we think Doha can finally move forward.

Our goal remains the same – to see the mission of the Doha round fulfilled through the creation of new economic opportunities and a major contribution to global development and growth.

For America, that means meaningful market access for our farmers, ranchers, manufacturers and services providers.

It means a clearer picture of what we get as well as what we’re expected to give.

It means a balanced and ambitious outcome that yields meaningful new trade flows for all.

Getting there will require ideas and input from all our trading partners about how to put Doha on a straighter path to a successful outcome.

I’ll be talking to our fellow WTO members about proactive, positive options for moving the Doha round forward both procedurally and substantively, and asking for the same from them.

While progress has been achieved since the Round first started (and the July 2008 Ministerial was as close to a breakthrough as we have seen in these talks), now is a good opportunity to think about different ways to unlock Doha's potential. While countries are going to be eager to hear what Ambassador Kirk has to say about Doha over the next few days, Kirk will be just as eager to hear what role all of the key stakeholders, including the most advanced developing countries, will play in contructively moving the Round forward. After 7+ years, new ideas should be encouraged and discussed.

Life Without Doha

by Sean Heather

With everyone Monday morning quarterbacking the collapse of the Doha negotiations there has been no shortage of color commentary and analysis of what happened.  But few have begun to ask, or better yet answer, the question of what happens next?  Yesterday’s WSJ op-ed "Greasing the World Economy Without Doha" by Daniel Ikenson offers a good glimpse into a new direction for global trade policy.

Ikenson rightfully reminds us all is not lost. In fact there is already a significant success story that is a result of the current global trading systems. He further suggests that a more inward focus by countries toward gaining efficiencies with respect to trade facilitation could yield sizeable economic gains.  He makes a very credible case. He rightfully points out that tariffs are only one form of barrier that hinders global trade and market access, he goes on to further list other plagues like "corruption, administrative incompetence, superfluous paperwork, transportation monopolies, and the use of antiquated technology."  Domestic regulatory policies should be added to the list.

Domestic regulatory frameworks worldwide are increasingly in conflict and create market distortions that can be every bit pernicious as tariff barriers. The local nature of regulations severely hinders the global nature of the world’s economy, making it vastly more difficult for companies to compete in multiple markets. In fact, Ernst and Young’s strategic business risks report for 2008 named global regulatory challenges as the number one global business risk. If large multinationals struggle to navigate myriad bureaucracies what hope is there for small and medium enterprises?

Regulators live in different worlds than trade negotiators and international work as part of a regulators normal course of work can be down right foreign. A bridge needs to be built between the trade world and the regulatory world given the proliferation in the number of regulators around the world, the vast number of divergent regulations being promulgated, and the challenges placed on commerce to comply. Additionally, for those governments looking to maintain protectionist policies, regulatory policies offer up an avenue to side negotiated trade deals.

The fact is the Doha round, if it could have successfully been resolved, would have done little to reign in market distorting regulatory policies. Herein lays a tremendous opportunity for global trade policy.

The good news is there are conduits in place with key U.S. trading partners that could use the energy and attention of the business and trade community that had previously been dedicated to Doha. The U.S.-EU dialogue launched last year know as the Transatlantic Economic Dialogue or the Security and Prosperity Partnership of North American that we have with Canada and Mexico are two that immediately spring to mind. Both of these dialogues are prime venues for addressing regulatory challenges to open and competitive markets. In fact, it has been estimated that ironing out regulatory differences between the U.S. and the EU would amount to 2-3% increase in GDP for both sides.

Doha symbolizes the traditional meat and potatoes of trade policy – tariffs.  Combating market distorting regulations and promoting regulatory policies that open and enhance competitive markets will dominate trade debates for decades to come. The time to begin to think about how best to address these regulatory challenges is now.   

Trade Talks Tumble and Collapse in Geneva

By Christopher Wenk

The reality is that not many people expected a breakthrough to happen in Geneva at the WTO Ministerial that began over a week ago. Heading into the talks, WTO Chief Pascal Lamy had put the chances of success at "a little better than 50 percent". It was a tremendous gamble even calling for the Ministerial, but Lamy felt that he had no choice. And we shouldn't blame him for trying.

Unfortunately, those chances for success did not come to fruition as the talks collapsed tonight in Geneva. The ministers were "simply not able to bridge their differences", Lamy told a press conference after the breakup of negotiations. There will be all sorts of stories written about how the collapse came about and who is most to blame. As I wrote a few hours ago, China began to play a very unhelpful role in these talks over the last few days. To me, this is one of the most significant developments that led to the collapse in Geneva. Since the Doha Round was launched, China has not played an active role in the negotiations. China has always kept a low profile and not wanted to be seen as pushing their weight. Now they have and the Round has tumbled and collapsed. But that is not entirely fair. Shared leadership, means shared blame as well. Or least, we hope there is a sense of shared leadership.

As Chamber President and CEO Tom Donohue said in a press release:

"It's ironic that this blow to the Doha Round came from two of the chief beneficiaries of worldwide trade. India and China are emerging powers, but with great power comes great responsibility.  They missed an opportunity to show leadership as key players in the global trading system.

U.S. farm subsidies have been blamed for every imaginable woe but the common cold. But when the chance came to put a serious limit on them, India and China wouldn't pay even a modest price for it.

The real losers today are the world's poorest countries, whose citizens understand that expanding trade is the right path toward growth. We must all work to limit the damage this setback will have across the global economy.

In the coming weeks, world leaders must reflect on this setback. Emerging nations must come together and demonstrate their shared responsibility toward the global trading system that is lifting their citizens from poverty."

Read the full press relase

Now we must all let the dust settle before we figure out how to move forward. The developments in Geneva tonight do not mean that the Doha Round is dead although that is what many people are going to say. However, the developments in Geneva do mean that the United States alone cannot bring a multilateral trade negotiation to a successful conclusion. Some of these countries need to reflect on the fact that actions speak louder than words. The sad reality is that there are a lot of developing countries who were hoping for a swift and successful conclusion to the Doha Round. Tonight's failure will have a much bigger impact on those countries than on the United States or other developed countries. Bottom line: there are no winners and lots of losers, including China and India.

China Pushes Weight in Geneva, Talks Reach Critical Phase

by Christopher Wenk

A significant development happened on my way home from Geneva this past weekend. One of the biggest beneficiaries of a final Doha Round agreement, China, is now working actively with India (among other players) to continue moving the goal posts and scuttle a deal that needs to be reached in the next 24-36 hours. Trade Ministers have been meeting in Geneva for over a week having started on July 21 (although most arrived the weekend before that). Progress has ebbed and flowed with near break-down’s followed by WTO QB-in-Chief Pascal Lamy’s bold plan, “Lamy Text”, on July 25 to keep the talks going. At that time, there was near unanimous support by the G-7 countries (US, EU, Australia, Japan, China, India, Brazil), except for India, to use the Lamy text as a basis to move forward. However, something happened on the way to a possible deal.

As John Miller point’s out in today’s Wall Street Journal, "China Objection Threatens Trade Deal", China very well may be a chief culprit in bringing these talks down if that is the fate of this Ministerial.

As the article begins:

China abandoned its longstanding place on the sidelines of multilateral trade talks Monday, saying it has a right to set high tariffs on rice, sugar and cotton in a move that threatened tentative progress toward a new global trade deal.

China's objection to a compromise proposal on farm tariffs and subsidies, presented late last week in talks at the World Trade Organization in Geneva, appeared to set back hopes of closing a deal in the so-called Doha Round, still struggling after seven years of negotiations. It also brought a sharp rebuke from the U.S.

The more intriguing development here is that it is not just the United States (and EU) who is calling out China for their current behavior and tactics. We are also seeing other developing countries, who very much want this Round to succeed, calling out China as well. We are beginning to see some breaks within the ranks of developing countries. Up until now, many countries have left it to the India’s and Brazil’s (who is now playing a constructive role in the talks) of the world to speak on their behalf negotiating with the big boys. Now, some of these countries are realizing that those countries are not representing their best interests anymore.

The fate of this Ministerial, to achieve modalities on agriculture and industrial goods (NAMA), and the Doha Round hangs in the balance. We very well may be able to see what is on the other side of the door by later today, tomorrow at the latest.

Soon we will find out who wants this to succeed and who doesn’t.

Dust Settling from Lamy Text, Services Up on Saturday in Geneva

by Christopher Wenk

I write this post from the airport in Geneva as I am en route back to Washington. However, I will continue to blog away in the days ahead.  There very well could be a deal in the making; unless someone scuttles it, which becomes less and less likely the longer this goes on. Ministers have been here since last Monday and are now "invested" in this process.

As last reported there was some significant forward progress last night in Geneva as Lamy tabled a text on agriculture and manufactured goods. This text will be the basis for further negotiations with the aim of locking in those elusive tariff-cutting formulas or "modalities". Not everyone is happy with everything in the text. As the old saying goes, the dust is still settling. It seems that Argentina is making some loud noise about their displeasure and India is not entirely pleased either. But the process moves on.

From a US perspective, I think that business groups including the Chamber, NAM and NFTC (all represented in Geneva) are pleased that the Lamy text keeps things alive in Doha. It is not perfect, but there are nuggets of positive elements as well. It is pretty clear that US AG groups (plenty of them in Geneva) are not entirely pleased with the Lamy text on agriculture as new market access opportunities provided by the text are questionable.

On another beautiful day in Geneva, Ministers will turn their attention to Services, which has been the ugly step child in these negotiations. All of those Geneva trips by Bob Vastine and the Coalition of Service Industries (CSI) are finally paying off. Ministers are participating in a "Signaling Conference" whereby they will state positively what they are willing to offer in opening up their market to more services exports. They will also state what their top objectives are on the flip side going outward. It's about time these negotiators are turning to a sector that makes up two-thirds of the world's GDP. However, there are many potential landmines out there including Movement of People (Mode 4) and Maritime Services to name a few.

Things continue to move forward, but the path ahead will be very difficult. This Ministerial could go well into next week.

Biggest winners so far: WTO QB-in chief Pascal Lamy for moving things forward and the hotels and restaurants of economically depressed Geneva.

Biggest loser: Stay tuned. There are lots of potential skunks at this picnic.

Lamy Text Keeps Doha Alive for Another Day

by Christopher Wenk

After being pushed to the brink of collapse over the last few days, last night in Geneva QB Pascal Lamy pulled a rabbit out of his hat to move the process forward. At least for another day. Not quite a "breakthrough", but possibly an important confidence building step.

In essence, tonight there was an agreement to further negotiate from a text that Lamy first put out this afternoon with key players in the "G-7" (US, EU, Australia, Japan, Brazil India, China). Then there was a further agreement by the other Trade Ministers in the Green Room to move forward with this text as the basis for further negotiations.

There has not been a deal yet on agreeing to modalities (tariff cutting formula) for ag and manufactured goods, which is the purpose of this Ministerial. However, the process will move forward tomorrow and, dare I say, possibly into next week.

Today provided Ministers the choice of letting the round collapse entirely or try and move it forward. Luckily, they chose the latter, but there is still a long way to go and many challenges remain. Including Argentina and India who spoke negatively of the Lamy text. While most people will be outside enjoying the weather on Saturday, Trade Ministers in Geneva will be taking part in a "Signaling Conference" on services.

Lots of hotel and airline reservations are being extended. Unfortunately I have a plane to catch, but still plan to blog on all of the latest developments in Geneva.

"Progress" in Geneva...

by Christopher Wenk

Of course, the word progress is relative, but that is what we are being fed over here. The reality is, if there is not progress or some movement forward today, this Round will not likely come to fruition anytime soon. Trade ministers are exhausted and those who are not part of the "G-7" are feeling excluded.

All afternoon the G-7 met and it seems there was some sort of consensus between the US/EU and Brazil on a proposal to take to the broader Green Room tonight, which is where trade ministers are right now. Details are vague and who in the world knows what will come out of this, but any bit of progress is worth something right now.

There could be a very late night ahead fleshing things out or it could crumble altogether. However, the fact that it did not break down earlier today is a sign that maybe folks do want to try and get this done--make their airfare/hotels and other expenses worth it. I want to make mine worth it too.

Tonight will be a test on whether or not our quarterback, WTO Director-General Pascal Lamy, has the buy-in to keep trade ministers in town as long as he needs to seal a deal. Nothing is a sure thing, but progress is elusive right now and something may be brewing on Lake Geneva.

A lot is at stake and sooner or later we will know if the Doha Round will live to see another day.

Soap Opera Continues in Geneva

by Christopher Wenk

The on-going saga of the WTO Ministerial picked back up this morning in Geneva. The more I think about it, these negotiations this week feel more like a soap opera than trade talks. It's quite a cast of characters over here and there is more drama than an episode of "Days of our Lives."

And like soaps on TV, the Doha Round talks have been going on for years and years. The Doha Round soap opera would be entitled: "Moment of Truth." Once again, the star of this saga today will be Indian Commerce Minister Kamal Nath. Of course others need to step up too.

As I blogged last night, WTO Director General Pascal Lamy sent everyone home at an unusually early hour of 9PM so Ministers could think things over even more. Today started off with a meeting of the G-7 (US, EU, Australia, Japan, Brazil, India and China). Depending on how that goes, the plan would then be to convene to the Green Room. Yet again, today will be a moment of truth and all eyes will be on Kamal Nath.

More on Mr. Nath from the Wall Street Journal:

The result on Wednesday was a 12-hour session that EU Trade Commissioner Peter Mandelson called "some of the most difficult and confrontational negotiations" of his four-year term. The reason, according to European, U.S. and Brazilian officials: Mr. Nath. "He just sat there and said 'No' for 12 straight hours," a trade official said.
...
Doha "was meant to decrease poverty, not enhance prosperity," Mr. Nath said in the interview Thursday.

Well Mr. Nath, I would like to posit that the way to decrease poverty IS to enhance prosperity.

So the promo for our soap opera goes: "Will it be a late night?  Will there be a breakthrough? Or will things just blow up completely."  How will it go, well as one smart and dashing gentleman suggested in the WSJ article:

"Success or failure of the Doha Round may very well lie in the hands of Kamal Nath alone,"

It's time to start making some deals and soon. People are losing patience and people like me have flights booked.

to be continued....