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The World Trade Organization (WTO) isn't doomed by a collapse in negotiations. All advances in trade liberalization from previous rounds remain locked in. Though countries may gripe when they lose disputes arbitrated by the world body, no one seriously questions its value in resolving members' conflicts.
The WTO also will continue to provide a forum for lowering trade barriers, whether the Doha Round is revived or not. Between the end of the Uruguay Round in 1984 and the start of the current round in 2001, WTO members reached accords to eliminate most trade barriers on information techology, telecom equipment and services, financial services and e-commerce.
But the momentum for reducing global trade barriers has been blunted. Unless and until WTO talks restart, many countries will focus on cutting deals bilaterally or regionally. That risks undermining the WTO, which has the goal of creating a level playing field for all. It also could put the U.S. at a competitive disadvantage vis-à-vis the European Union and China. Both those economies are busily pursuing bilateral and regional trade pacts around the world.
The ability of the U.S. to negotiate such agreements depends on Congress renewing Trade Promotion Authority. Such legislation binds the Senate to give any free trade agreement submitted to it a straight up-or-down vote, with no amendments allowed. The most recent Trade Promotion Authority expired more than a year ago. The Democratic Congress has shown no interest in extending it to President Bush, save in the event of a successful Doha Round.
Odds are the 111th Congress will renew Trade Promotion Authority for the next president. But Democrats will set terms, regardless of who wins the White House. They'll insist new trade treaties include strong environmental and labor standards and stricter enforcement provisions. They'll also require U.S. trade negotiators to consult more frequently with Congress, bringing a wider number of congressional committees into the dealmaking part of the process.
One of the reasons for the current impasse over the Colombia Free Trade Authority congressional Democrats feel Bush repeatedly froze them out of trade talks. Democratic presidential candidate Obama supports such conditions. GOP rival McCain will grumble but end up accepting them.
"The question is, who would be interested in signing those agreements?" says Daniel T. Griswold, director of the Cato Institute's Center for Trade Policy Studies research center in Washington. "The list would be very small."
Fewer trade pacts that take longer to broker would suit many Democrats, who have shown increasing resistance to passing free trade agreements in recent years. All the same, a renewed Trade Promotion Authority will almost certainly grandfather the signed pacts with South Korea, Colombia and Peru.
Democrats who balked at giving President Bush trade victories by passing those accords will be more open to arguments from Obama or McCain that the pacts support critical allies as well as expand U.S. exports. Any other labor or environmental issues with the three pacts under consideration would be handled through side agreements rather than renegotiating the entire accords.
Global trade talks will likely remain on hold until 2010 -- at the earliest. The terms of the current trade teams in Washington and Brussels will end soon. President Bush's successor will have to appoint a U.S. Trade Representative, Commerce Secretary and Secretary of Agriculture, plus dozens of deputies and assistants to do the negotiating.
Getting these individuals confirmed and up to speed will take six to nine months. By then, the current term of the European Commission will be almost over, and the hunt will be on to find replacements for Trade Commissioner Peter Mandelson and Agriculture Commissioner Mariann Fischer Boel.
Reviving the Doha Round will be difficult enough, given the reluctance of China, India and other major developing economies to make concessions on market access for agricultural and manufactured goods. Until the U.S. and the EU can again mount a common front, it will be virtually impossible.
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