Presidential race: impact on WTO agreement

The Nov. 4 presidential elections could do more than determine the path of the United States for the next four years. They could also determine the future of the Doha Round, a former U.S. Trade Representative said.

WTO officials have been meeting with trade ministers around the world to try to restart the Doha Round after it fell apart in July over China and India’s refusal to open their markets. But the future of the negotiations could well hinge on who wins the U.S. presidential race, according to Robert Zoellick.

“It’s possible that we can restart the Doha Round,” said Zoellick, now the president of the World Bank, responding to a reporter’s question after he spoke at the World Food Prize Symposium in Des Moines, Iowa. “But if the next U.S. president is not pushing for the negotiations to succeed, it won’t happen.”

Zoellick did not mention either candidate, but as a former member of the Reagan and first Bush administrations and U.S. trade representative and deputy secretary of state for President George W. Bush, few would question his political leanings.

Zoellick, who helped start the latest round of trade negotiations in Doha, Qatar, in November 2001, said he remains optimistic about the negotiations, although the recent meltdown of the financial markets and rising food and energy prices have put the WTO in “dangerous waters,” as he put it in another speech earlier in the month.

(Trade officials from key countries have been meeting in Geneva to try to resolve some of the outstanding issues in the Doha Round, but Pascal Lamy, director-general of the WTO, has indicated he does not expect any meaningful progress on the negotiations until after the first of the new year.)

“I think a lot of people realized there were some good things on the table when they left Geneva after the talks collapsed in July,” Zoellick said during a press briefing at the World Food Prize Symposium.

“I’m worried about having to have 150 countries agree on every detail of a new document,” he said. “You have to have core leaders who are willing to step up and find a solution, who see it as a problem-solving exercise and not an arena for speech-making.”

He suggested changes will have to be made in how the negotiations are conducted to bring about progress toward what he termed the “new multilateralism.”

“We need a core group of finance ministers who will assume responsibility for anticipating issues, sharing information and insight, exploring mutual interests, mobilizing efforts to solve problems and, at least, managing differences,” he noted.

“For financial and economic cooperation, we should consider a new steering group for the WTO including Brazil, China, India, Mexico, Russia, Saudi Arabia, South Africa and the current G-7 (the United States, Canada, France, Germany, Italy, Japan and the United Kingdom.) But this group would not be a G-14. It should be numberless, flexible and, over time, it could evolve.”

Zoellick said the financial turmoil of the past year has created a number of problems that threaten world stability, including an increase in malnutrition among the world’s poor due to higher food and fuel prices, that could be addressed by such a group.

“Food prices have come down, but they’re still 40 percent above the levels of two years ago,” he told participants in the World Food Prize Symposium. “With many people in the developing world spending 50 percent of their income for food, the latest crisis has pushed 40 million new people into malnutrition.”

Because of such developments, the World Food Program has had to more than double its fund raising efforts, he said.

“We are not out of the woods on the current crisis. The World Food Program will need $6 billion to help feed the world’s hungry this year, compared to $3 billion in 2007. This organization has to raise all its funds, starting from zero every year. If you think it’s easy raising $6 billion, you should try it yourself.”

Responding to a question from Ambassador Kenneth Quinn, director of the World Food Prize, Zoellick said the World Food Program needs more flexibility in how it can raise and distribute the funds. “It’s not only a question of more money for research and development in agriculture, but also on the value chain,” Zoellick noted. “Some developing countries lose 50 percent of their food supply before it reaches the consumer.”

The World Bank and the International Monetary Fund are both making investments in agriculture and, more specifically, in the food chain to try to help more food reach the world’s malnourished. But more investments are needed, Zoellick said.

“That’s why leadership is needed,” he said. “If the United States is not willing to take the lead, it will be very difficult to push ahead on a new world trade agenda.”

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