Trade deal proves an exercise in adventure, fantasy – Opinion

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Published: July 6, 2006

AS A kid, an occasional Sunday night treat was to leave the farm to visit a neighbour who had electricity and a television. The draw was Disney and almost as good as the drama was the guessing game anticipation.

Would it be Adventureland or Frontierland featuring Daniel Boone or Fantasyland featuring Peter Pan?

Covering the World Trade Organization is a bit like that.

Sometimes it’s Adventureland as progress is made and possibilities arise.

Sometimes it’s Frontierland as the tough hombres from the United States and the European Union face off over who has the biggest gun, while townsfolk on the streets denounce them both as bullies.

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Last week, it was Fantasyland featuring Pascal Lamy.

At the end of another failed WTO negotiation and another deadline missed, Lamy said he had been asked by members to upgrade his role from facilitator to catalyst and thereby broker a deal in two or three weeks that has eluded the 149 country members for more than four years.

Right. And the Montreal Canadiens will win the Stanley Cup.

The problem with the WTO is that it carries on its shoulders the unrealistic aspirations of its members.

They know in theory that a regime of worldwide trade rules, backed up by a dispute-settlement process, is the best hope for organizing a world in which trade is the economic lifeblood for many countries, many sectors and many producers in agriculture and almost all economic sectors. The alternative to rules is that the big guys dictate the terms.

But they also know in practice that no matter what the arguments of the trade theologians, all politics is local including the politics of trade. All countries want trade rules that benefit those sectors that want to export while protecting from competition those sectors that do not or cannot.

Add to the mix the obvious fact that not all countries are equal. Highly developed countries are far better able to compete than poor developing countries.

So a one-size-fits-all deal, even with a few variations for the weaker players, is still likely to benefit the rich competitive traders and create a widening of the economic gap for the poor.

In other words, for some of the major players, trade deals are simply economic road maps for the wealth-creating exchange of goods.

For many of the poorer players who are the vast majority of WTO members, trade rules are as much social as economic policy.

It is a complicated dysfunctional mix that has become all the more volatile as the clout of developing countries has increased during the past decade.

From 1988 in Montreal to last weekend in Geneva, there have been nine ministerial WTO meetings trying mainly to figure out how to integrate agriculture into the rules-based trading system.

By my calculation, 5.5 of them have failed and 3.5 have had a measure of success – the half being Hong Kong last year when targets were missed but a patched-together deal kept the process alive.

By any standard, that is a failing grade for an organization and a process.

It should lead to serious questions about whether the process is appropriate, the goals attainable and the underlying assumptions sustainable and appropriate.

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