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January 8, 2007
Can Bush Cut EU Ag Tariffs?

The Doha Round of trade talks is scheduled to restart today, and according to the Times of London, George Bush could either usher in a new era of freer agricultural markets or allow the WTO to essentially fail on globalizing agriculture. The effects of a collapse could mean a further retreat into poverty for developing nations, and Bush is running out of time to make them a success:

Global trade talks that are intended to improve the lives of billions of poor people stand on the brink of failure, Peter Mandelson, the European Trade Commissioner, has told The Times.

At a meeting today, Mr Bush can either breathe new life into trade negotiations that were suspended last July because of international disagreement over cutting tariffs and farm subsidies, or he can effectively kill the five-year process, said Mr Mandelson.

The financial consequences of failing to liberalise World Trade Organisation rules through the so-called Doha Round of talks will be huge, with the World Bank estimating that a deal could generate an extra $287 billion (£150 billion) by 2015.

The political impact could be even greater. The talks, that were convened in Doha two months after 9/11, are sometimes known as the Development Round to emphasise the goal of helping the world’s poorest people to escape poverty and also to remove a key motivation for terrorism.

“We are on a knife-edge,” Mr Mandelson said, before his meetings today with President Bush and Susan Schwab, the US Trade Representative. “We have to engage President Bush personally, because this deal can only be done with his authority.” Mr Mandelson will meet Mr Bush alongside José Manuel Barroso, the European Commission President.

This sounds somewhat overwrought. The US has offered in the past to reduce farm subsidies, but only if the EU agrees to do the same. The EU spends a lot more money, relatively speaking, to protect its own agricultural producers, and the European Trade Commission should spend more of its time getting its member states, especially France, to end or greatly curtail their own subsidies.

It may be too late in any case. If Bush would have had trouble convincing the Republican-led Congress in the last session to drop trade barriers, he'll have no chance at all getting Democrats and their partners in labor to agree. We will start hearing about American farmers losing their land because of price and production pressures. Besides, the farm bills carry too much temptation for pork-minded politicians. Bush also was only a few months left on his fast-track authority on trade, and Democrats will not likely renew it.

If Bush cannot or will not reach agreement with the EU in the Doha round this year, it will be effectively his last opportunity to make it happen. The EU will have to wait until America elects another president to rebuild the effort to lower agricultural trade barriers, allowing poor nations to enter these markets and earn hard currency for their food. That could mean a delay of two to four years for any progress at all to be made -- which may cause the entire effort to miss its political window altogether. If Bush cannot cut this deal, it's unclear than any successor would even come close.

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Posted by Ed Morrissey at January 8, 2007 5:04 AM

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