Expert Explains Collapse of Global Free Trade Talks

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• JEFFREY BROWN:

  In November 2001, 149 member countries of the World Trade Organization began talks in Doha, Qatar, with an ambitious goal: to create a global free trade agreement that would boost economic growth and reduce poverty in developing countries.

  Five years later, the talks have collapsed. Yesterday, the director of the World Trade Organization suspended negotiations after a meeting in Geneva failed to make any progress.

  To help us look at the who, what, and some of the why, I'm joined by Sherman Katz, a senior associate in the Trade, Equity and Development Project at the Carnegie Endowment for International Peace.

  Welcome to you.

• International Peace:

  SHERMAN KATZ, Senior Associate, Carnegie Endowment for Thank you. Happy to be here.

• JEFFREY BROWN:

  Why don't we start by just saying who was at the table. Who are the players here?

• SHERMAN KATZ:

  There are 149 countries who are members of the WTO: the United States and all of the industrial countries are members; the OECD countries; the newly-emerged economies, such as Brazil, India, Egypt, South Africa; and all of the developing countries.

• JEFFREY BROWN:

  Now, in general terms, how do you define the goal? What was at stake here?

• KATZ:

  SHERMAN The goal was to give everyone a chance to participate more actively in the global economy by lowering trade barriers.

• JEFFREY BROWN:

  And how would that — I mean, specifically, lowering them on what kinds of trade?

• KATZ:

  SHERMAN On goods and services. Until the previous trade round, the so-called Uruguay Round, this organization, the WTO, only covered goods, but in that round the United States insisted that services be included. As you know, 70 percent of our gross domestic product is now in services, and we now have rules that cover export and import of services, and that's very much to our benefit.

• JEFFREY BROWN:

  OK, so what happened? Why did they break down?

• KATZ:

  SHERMAN Well, agriculture is the big problem.

• JEFFREY BROWN:

  And it has been for many, many years, right?

• SHERMAN KATZ:

  Absolutely. Indeed, when the WTO was created, then the GATT, the United States insisted that agriculture not be included. This was after World War II. We stood to be the world's breadbasket. We didn't want to be inhibited in any way.

  In the Uruguay Round, in the late '80s, early '90s, we agreed to include agriculture. And we promised the poor countries and the emerging countries that, in return for their accepting rules on services, on intellectual property, that they would get to sell more farm goods to the rich countries. Well, it didn't happen in the 10 years after the Uruguay Round.

  Then, we had Doha, beginning in 2001, and we promised them again: access is coming to our farm markets. And, finally, 2005, after five years of promises, 2006, we said, "We can't do any more than we've done. We can't lower our tariff barriers anymore."