[A-List] US imperialism: bilateral trade deals

["Michael Keaney" <michael.keaney@xxxxxx>]

Behind the very visible scenes of military build-up, sabre-rattling,
Republican electoral victory and the like, Robert Zoellick is working very
quietly but assiduously in clinching bilateral trade deals with various
states as part of a US strategy to force the development of WTO talks down
pathways more amenable to US interests than might otherwise have been the
case. This is a development that deserves our closer attention, since it is
designed to outflank the EU whilst challenging ultimately China, which is
quietly pursuing its own regional hegemon policy. In other words, Mark is
right on the money in his statement that

"...whatever the contingent, fortuitous or surface-form of mutual needs,
tactical alliances etc between China and the USA are right now, objectively
and in value-terms *these two states are the principal rivals on the world
stage* and the competition between them is the main dynamic now configuring
the driving the whole global conjuncture. And within that dynamic, the US
and China are enemies: and China and the EU are fundamental allied."

See http://lists.econ.utah.edu/pipermail/a-list/2002-October/021417.html

The New Labourite Financial Times certainly seems to know which side it is
on (see below).

I will be trying my best to follow the developing international political
economy of trade on the A-list, and I hope that others will too.


LEADER: A misguided zeal for trade deals
Financial Times; Nov 04, 2002

While the US stands accused of unilateralism in other foreign policy fields,
in trade it is embracing a different creed: bilateralism. With the zeal of
the converted, Washington is falling over itself to do separate deals with
an ever longer list of countries in Africa, Asia and the Americas.

Robert Zoellick, US trade representative, thinks the tactic will stimulate
"competitive liberalisation" that will energise the Doha trade round and
talks on a Free Trade Area of the Americas - or offer a fall-back option if
they fail. He also hopes clinching a string of smaller deals that benefited
the US would revive support in Congress and business for trade initiatives.

Both beliefs are mistaken and may be dangerous. More bilateral deals would
not open global markets: they would segment them further by creating a
patchwork of discriminatory arrangements, each with different rules. That
would add to bureaucracy and exporters' costs. Furthermore, the chances of
achieving worthwhile liberalisation within such arrangements look slim.

Most of the US initiatives lack persuasive commercial logic. Some, such as a
proposed agreement with Morocco, are primarily political gestures. Others,
such as a nearly-completed deal with Singapore, are with countries whose
markets are largely open already. And in many cases where there are serious
trade barriers to be tackled, the biggest are in the notoriously intractable
area of agriculture.

The US has in any case little to offer other countries. Mr Zoellick faces a
tough struggle to get Congress to agree to lower US trade barriers. He has
little reason to try, if the only prize is better access to a few small
markets. Realpolitik favours hoarding such concessions for global trade
talks, where they can be traded for much bigger gains. The US has admitted
as much by balking at discussing farm subsidies outside the World Trade
Organisation.

All this makes it fanciful to suppose bilateral deals can rekindle domestic
enthusiasm for liberalisation or scare other countries into bending to US
demands in the WTO. To be sure, the Doha round is moving slowly, notably
because of European Union intransigence over farm trade. But flirting with
bilateralism at this stage is more likely to sink the round than speed it
up.

By entering the game with such gusto, the US is inviting others to climb on
the bandwagon. That would distract political attention from the WTO and
divert already over-stretched negotiating resources into purposes that are
of negligible, even negative, economic value. It would be a terrible waste
if that were the result of George W. Bush's victory in securing "fast track"
trade authority this year.

Washington has far more to gain by making the success of the world trade
round its overriding priority. The multilateral system badly needs strong
and resolute US leadership. But if it is to be provided, other WTO members -
above all the EU - must do much more to show that they are serious about
moving forward too.