Back To The 19th Century

WSJ.com – U.S. Ventures Plan to Save International Trade Talks
I don’t want to make too much of this right away, but it’s the best news I’ve heard in a while — at least since President Bush lifted the steel tariffs. I also doubt this will be pursued in Congress during an election year.

If we had been in the habit of raiding the public coffers to subsidize agriculture in the 19th century — and it had actually worked — this country would be dirt poor, quite literally. The purpose behind the subsidies is to protect agricultural jobs. In the middle of the 19th century 50% of the population was engaged in farming. Today it’s less than 3%.

That massive drop-off has been a blessing because we now have labor to build roads, write software, build cars and the like. If we had pursued these same policies in the middle of the 19th century we would presumably have a much higher portion of the workforce still on the farm and would be poorer for it.

The chief U.S. trade negotiator reached out to the developing world with a proposal to salvage troubled global trade talks by scaling back their ambition.

In a letter to all 146 World Trade Organization countries, U.S. Trade Representative Robert Zoellick proposed quickly eliminating all farm-export subsidies and slashing tariffs on goods, while scrapping talks on investment rules and other issues that had irked Brazil, China and other countries.

Since the so-called Doha round of negotiations fell apart in Cancun, Mexico, in September, the U.S. has done little to revive the effort to craft a global pact to lower tariffs. Critics claimed President Bush wanted to postpone a push to revive the talks until after the U.S. presidential election in November.

But in his letter, Mr. Zoellick said the U.S. hoped to make 2004 “a year that exceeds expectations” and said he planned a trip next month to key capital cities in Latin America, Europe and Asia.

The U.S. trade chief proposed that all countries aim for another meeting of top ministers by the end of the year, this time in Hong Kong.

The current round of talks, launched in Doha, Qatar, in November 2001, were meant to wrap up at the end of this year. No one now expects that to happen, but many had feared after Cancun that the global talks might fall by the wayside for years.

Election politics will likely limit how far Mr. Zoellick can push in coming months. But his letter, sent over the weekend, indicates that the U.S. wants to focus heavily on lowering tariffs on manufactured goods and agricultural products while eschewing negotiations in areas that stirred heavy opposition among a large bloc of countries that included China, Brazil and India.

“At the most fundamental level, I think we are most likely to succeed if we focus our work on the core market-access topics: agriculture, goods and services,” Mr. Zoellick said in the letter. To succeed in this, though, Mr. Zoellick said the key ingredient was for developed countries to agree to eliminate all agricultural export subsidies by a certain date.

Great news, indeed, if they can make it happen.

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