“We Are in the Endgame”

Amid concerns about a worldwide resurgence of trade protectionism, negotiators from the European Union and the U.S. met in Washington earlier this month to give new impetus to a stalled global trade accord. The World Trade Organization (WTO) suspended its so-called Doha Round last July because of disagreements between the U.S. and the E.U. over subsidies to their farmers, while countries from Australia to India complain that the ways both giants use such supports are a major trade distortion. There’s not much time left for a new deal, since the special “fast-track” authority to negotiate trade agreements, granted by U.S. Congress to President Bush, expires at the end of June. In an interview with Time’s Leo Cendrowicz, Europe’s chief trade negotiator assesses the situation.

There have been many attempts to breathe life into the Doha Round — why should this initiative be any different?
There is a wide appreciation among all the players that we are in the endgame. I think everyone realizes what a serious situation we are in. There is a shared sense of urgency about this, although it is partly for reasons to do with the electoral calendar in both the U.S. and Europe.

Protectionist sentiments seem rampant in Europe. How will you keep that in check?
Protectionist sentiment is not rampant in Europe. Europe’s economy remains the most open in the world to trade and investment. There have been a number of high-profile cases related to national protection in sectors like energy, but that is a particular issue. There is anxiety about the impact of low-cost imports of products like shoes and textiles from countries like China, but Europe has also benefited from these low-cost consumer goods. That is why we have to make the case for openness and to help individuals and communities adjust to inevitable change.

Is the U.S. Administration ready to do a deal?
President Bush said that he wanted a deal sooner rather than later, and expressed impatience with the negotiators — not least, his own. And the Democratic leadership said it wanted to put partisanship behind it. But the Administration now needs to make a serious gesture.

There are concerns that, with a wounded Administration and a new Democratic majority in Congress, it will be harder to get a strong U.S. position. Do you agree?
Without doubt, the Administration needs to do some heavy lifting with a Congress it no longer controls and a farm lobby that still has considerable power. Against this, President Bush is a free trader by instinct and wants to do the deal. We need to show that, in fact, it will not cost the U.S. much to cut its subsidies, yet will provide longer-term benefits to the economy. Agriculture is still the biggest sticking point.

What are the prospects in Europe, especially in view of coming French elections?
Europe is prepared to go further than others in cutting tariffs and farm subsidies, and do more than in any previous trade round. It won’t be Europe that allows agriculture to be the sticking point in this negotiation.

Despite the Doha Round’s failure so far, world trade is booming. Doesn’t that suggest that a deal may not be as important as you think?
World trade is booming because previous rounds and trade deals have succeeded in driving tariffs down. Doha can push liberalization further and spread the benefits more widely across the global economy. Success will lock in new levels of openness and guard against recession and protectionism.

You suggest that a global deal would benefit developing countries especially. But are they doing enough to make it happen?
Developing countries will be asked to make a proportionate contribution to the Doha package. But a key group of emerging economies like China, Brazil and India are now in a position to do more. These G-20 countries have played a clear leadership role in the Round. For a final deal they must step up to the table with strong offers.

What will happen if the Doha Round really is pronounced dead?
The inevitable response will be each for himself, and every continent will be the worse for it. The consequences would be, firstly, that we would miss this wonderful economic opportunity; second, there would be a weakening of the WTO, and this would particularly harm developing countries; and third, it would remove an important bulwark against protectionism.

Was the WTO too ambitious five years ago when it launched the Doha Round?
The world trade system is growing and changing at an incredible pace. The WTO and the current machinery for the Doha Round can’t keep pace. But it can be adapted and put back on track. I believe a deal is doable, and that it can be done within the narrow time frame that we have ahead of us.