Wto, Cancun And Free Trade

[Craig Read]

The CAIRNS group, and developing countries called the US and EU bluff on agricultural subsidies and tariffs.

Good for them. Time to get farmers who are 2 % of the GDP from managing trade relationships. Frankly I am sick and tired of the agro-business lobby group that seems to believe that all of Europe and North America exist for their approval.

Free Trade will help cure poverty.

The World Bank estimates that a new round of market opening would raise global output between $290 billion and $520 billion and lift some 144 million people out of poverty by 2015. Dan Griswold of the Cato Institute cites a May 2002 International Monetary Fund paper showing that ending agricultural protectionism alone would add $100 billion to global growth. Some $92 billion of that would go to the developed world, in the form of lower prices and better allocation of resources, and $8 billion would go to poor countries.

Cancun doesn't yet mean this Doha trade round is dead. The Uruguay round took eight years before it succeeded in 1993. Zoellick, the U.S. trade czar, has also stressed that he will continue to pursue bilateral and regional trade pacts with willing partners. Australian Prime Minister John Howard said yesterday that he expects to reach such a deal with the U.S. as early as next month.

Canada is apparently trying to organise trade pacts with developing countries.

Bi-lateral or group agreements conforming to the WTO to reduce these pernicious subsidies and tariffs to fat overpaid farming interests is the way to go. From a free trader's view, after all, the World Trade Organization is a protectionist device. It allows countries to justify, on grounds of treaty reciprocity, limits on trade that otherwise make no economic sense. Perhaps it's time for the U.S. and other countries that benefit from open global markets to begin once again practicing unilateral free trade.

The WTO is certainly not dead - but the bluff has been called.