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July 31, 2006

Trade Talks

Via Econlog, a truly excellent piece about trade talks and the Doha Round by Clive Crook.

Just powering up this free-lunch machine, they say, is going to lift maybe half a billion people out of poverty over the next 15 years. It is going to increase incomes in the world's poorest countries by around $200 billion a year, or roughly four times what rich countries jointly give them in aid. And it doesn't cost anybody a cent. Just the opposite, because the rich countries benefit big-time as well. This box is the best thing ever, they say. It's worth trillions, for heaven's sake -- and the inventors are proposing to give it to humankind free.

But hang on. The world's governments decide they had better have a meeting about this. They are going to need to talk it all over, for about five years. Let's not rush into anything, they say. Can we be sure this box is really such a good idea? There is a lot to discuss. How are the gains to be shared among countries, for instance? That will need some tough negotiating. And, country by country, what if some people gain more than others? That would be awkward. Come to think of it, if the world is suddenly going to be more efficient at making, well, everything, then perhaps we won't need as many farmers, say, or textile workers, as we used to. There might be some temporary unemployment. That would be bad.

So the governments have their five-year meeting. They pledge now and then that the machine will be connected up shortly, once all the issues have been resolved. They reaffirm again and again their commitment to confront the scourge of global poverty (as they call it), and say they understand that switching on the machine is the best and biggest thing they can do for the poor. And then one day they up and announce that, on reflection, they don't want the machine at all.

In breaking news from Brussels, Peter Mandelson is still a complete tit.

July 31, 2006 in Trade | Permalink


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"Kamal Nath warned that restarting negotiations could take anywhere from months to years".

I say 6 months minimum because there are issues from Cancun which still impinge on this. Plus, it can be reduced to simplistic terms, as everything can. This is not trade - this is national jockeying. No one's going to give way.

By the way - thanks.

Posted by: james higham | Jul 31, 2006 12:31:59 PM

gosh, it's almost as if those projections of massive gains from the Doha round were widely believed to be embarrassing bollocks, isn't it?

Posted by: dsquared | Jul 31, 2006 12:44:31 PM

By the way, I've lifted both these posts and am going to use them with my Minister at 1800. Pain in the bitt working late.

Posted by: james higham | Jul 31, 2006 1:32:13 PM

"is going to lift maybe half a billion people out of poverty over the next 15 years. It is going to increase incomes in the world's poorest countries by around $200 billion a year"

Yeah, I would love to know whose ass those particular figures were pulled out of, and why the usual requirement for the claim to bear any relation to reality seems to fly straight out the window whenever free trade is involved. I would also like to see a comparison of the actual gains to developing countries from the Uruguay Round to those which were flung about by economic journlists beforehand.

Posted by: Jim | Jul 31, 2006 3:07:35 PM

Well, we'll never know, will we D2? Are you saying the present situation is Pareto optimal? Perhaps you think Ricardo was talking out of his hat?

Posted by: David Gillies | Jul 31, 2006 6:31:08 PM

The figures are pretty comprehensively modeled and analysed in the book by my colleague Bill Cline, Trade Policy and Global Poverty.

Posted by: Owen Barder | Jul 31, 2006 7:56:50 PM

wasn't that the one that came in for some rough treatment at the hands of Mark Weisbrot? If so, I seem to remember that a lot of those gains came from China's WTO accession which isn't part of the Doha Round, and that the benefits were very fragile indeed to the method of calculation.

Posted by: dsquared | Aug 1, 2006 1:55:47 PM