TWN Info Service on Trade and WTO Issues (July08/15)
17 July 2008
Third World Network

Trade: President Bush and Doha - the Emperor has no clothes
Published in SUNS #6517 dated 15 July 2008

Washington, 14 July (Lori Wallach*) -- Many in Washington greeted the announcement that the WTO would hold a Doha Round ministerial on July 21 with extreme bewilderment. Negotiations do not normally occur unless all parties have authority to make a deal. The Bush administration has no authority to make binding commitments on trade since losing Fast Track trade authority a year ago.

In the months leading to Fast Track's termination, US and WTO officials warned that a WTO breakthrough had to be agreed before Bush lost authority. When the deadline passed, they changed their tune to try to keep talks alive. Yet, the US Constitution grants Congress exclusive authority "to regulate commerce with foreign nations" and to "lay and collect taxes [and] duties."

This means that while a president may negotiate, the United States can only be bound to trade commitments through a vote of Congress. Fast Track was an unusual procedure that allowed the president to enter into agreements prior to Congress' vote and then obtain a vote within a certain amount of time.

There is zero chance that Congress will provide President Bush new Fast Track authority. The congressional leadership has explicitly stated in writing that it will not support further Fast Track for Bush. Indeed, Bush abused his past Fast Track authority to such a degree that this April, Congress reasserted its constitutional authority, and took action to remove residual Fast Track authority that applied to a Colombia Free Trade Agreement (FTA) signed before Fast Track expired.

Even if Congress were inclined to give Bush new Fast Track, only twenty-four working days remain before adjournment on September 26. Congressional leaders have repeatedly stated that there will be no post election "lame duck" session. Business will resume in January 2009, with a new Congress and president.

Further, at this juncture, US positions in the Doha Round negotiations cannot be relied upon to represent what is politically viable in Congress. Bush is desperate to repair his woeful legacy by being able to announce some Doha breakthrough. Yet, he is simultaneously 100 percent free of responsibility to ensure such a deal could be passed by Congress.

Some have falsely compared the current situation to the first President Bush's handling of Uruguay Round talks in 1992. In contrast to his son, Bush I had Fast Track authority when he agreed to the Blair House agriculture deal. President Clinton arrived in office under the same Fast Track delegation and thus proceeded with an additional year of negotiations to reach a deal in November 1993 which was passed by Congress under Fast Track in 1994.

Countries making concessions now, relying on Bush administration promises, will almost certainly face additional or different demands from a new president, who will be responsible for ensuring a deal can actually get through Congress. The Bush administration's legacy-not-viability approach is precisely what occurred a year ago in regards to a trade pact with Korea. In that instance, the administration signed a Korea FTA it knew could not get through Congress just so that Bush could announce completion of another FTA minutes before Fast Track expired.

The unreliability of Bush administration representations is most obvious regarding agriculture. US negotiators are making offers that directly conflict with the recent US Farm Bill. Bush officials in Geneva are saying, "ignore the 500-pound gorilla in the room." European officials are saying that a Doha Round would be implemented after the Farm Bill expires. These statements are misleading at best.

First, the new Farm Bill sets US policy for the next five years. More importantly, Congress' support for the positions in this Farm Bill are so strong among Democrats and Republicans alike that Congress overrode Bush's veto to enact the legislation by more than a two-thirds vote - twice! Yet, the Bush administration continues to dangle bait - for instance, regarding subsidy levels - that it knows would be unacceptable in Congress.

Numerous US trade agreements - over one hundred during the Clinton presidency - have been completed without Fast Track. However, when an agreement is negotiated by the President without some form of delegated authority from Congress, the deal's terms are only locked in place after Congress approves it. Passing an agreement through normal procedures requires that the contents are broadly supported.

Given this, it is worth noting not only the recent Farm Bill, but also that many Republican senators (who might otherwise support a deal that favoured corporate interests), have joined Democrats regarding certain anti-dumping rules, as well as flat opposition to any new Mode 4 "movement of people" services commitments.

The political and legal reality is that the United States will only be in a position to engage honestly in Doha Round talks after the new president arrives. And, given there is a decent prospect that Barack Obama may be the next president, this may be good news for developing country WTO members. A Democratic president will be more focused on preserving domestic policy space and thus will be more open to reciprocal demands for flexibilities. And a President Obama will focus on rebuilding the US' global reputation so terribly damaged by Bush.

Then why do countries seem to be willing to go along with this WTO ministerial? The response I have heard from other countries' WTO negotiators is uniform: they know about the US situation and the severe danger of proceeding, but no country wants to be blamed for raising it. Thus, allow me to state the obvious publicly and let the blame come back here to Washington: the emperor has no clothes!

[* Lori Wallach is a Harvard trained lawyer and Director of Public Citizen's Global Trade Watch, a public interest organization based in Washington, D. C. She is co-author of "Whose Trade Organization? A Comprehensive Guide to the WTO" (The New Press, 2004).] +