Mysteries of Trade Diplomacy.

Essay by courlove7 November 2003

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This will be registered as one of the biggest mysteries in the history of trade diplomacy: On Aug. 13, 2003--a month before the WTO Ministerial Conference meeting in Cancún, Mexico--American trade negotiators suddenly decided the U.S. should join the EU's exclusive club of rich countries for perpetual agricultural protectionism. On that date a joint U.S.-EU proposal on agriculture, offered as a means of breaking the deadlock of the WTO Doha Round, was announced with great fanfare.

In a nutshell, the Americans and Europeans were very imprecise in defining their commitment to lowering import barriers and were overly precise in shielding massive subsidies to their own farmers from meaningful reform. Their proposal not only failed to commit to the total elimination of export subsidies, as it should have done, given that these subsidies constitute outright dumping, but it also aimed to introduce provisions allowing them to legally perpetuate a significant part of their worst protectionist practices.

It also lacked a pledge to reduce over time--or to even cap--the amount of aggregate subsidies, trade-distorting and non-trade-distorting, to farmers. And while being vague about how tariff and nontariff barriers to agricultural trade would be lowered, the proposal was clearly skewed toward the EU's too-gradual and discretionary approach.

Why American trade negotiators coupled with the Europeans on the eve of the Cancún meeting is a mystery on several counts.

* Until then the U.S. had stood by its 2002 proposal calling for a rapid dismantling of both agricultural trade barriers and trade-distorting subsidies to farmers.

* Global agricultural trade liberalization on balance would be very good for the U.S., considering the significant benefits that would accrue to its consumers and its exporting farmers.

* It is not in the U.S.' best geopolitical interests to unnecessarily share in the EU's dubious honor of being the...