Shadow Government

Weekend in Bali -- Celebrating a WTO Deal

Dan Drezner gets enthused about the last-minute trade pact struck over the weekend in Bali, Indonesia, between World Trade Organization negotiators -- and rightly so. The WTO has been pushing toward a deal since the "Doha Development Agenda" launched in 2001.

The pact that emerged over the weekend covered a sliver of the original ambition. Media sources are running with an estimate of $1 trillion as the value of the deal. That's plausible, but by no means certain. The centerpiece of the accord is an agreement on "trade facilitation" -- making it easier to move goods across borders. Delays in the processing of imports and exports can be as costly as or even more costly than tariffs. The catch is that procedural reforms to expedite trade can be costly. Developing countries have complained in the past about undertaking such reforms without compensation. There will be more questions about details and implementation than there would be with a good old-fashioned tariff cut.

That said, this still qualifies as a Bidenian BFD. The World Trade Organization had not struck a broad, significant agreement since the conclusion of Uruguay Round talks almost two decades ago. That experience has been wildly different from the vision some had held of a quasi-legislative body meeting regularly to craft new trade rules.

One of the early problems that emerged with WTO negotiations was that there were an awful lot of "veto players." In 2003, at what was supposed to be a midterm assessment of the Doha negotiations, the ministerial meeting in Cancún ground to a halt when West African cotton producers demanded recompense for the harm done by cotton subsidies. In 2008, at the last serious effort to conclude the Doha Round, the talks fell apart when India, and then China, demanded a special agricultural safeguard that would have them raise levels of protection. That pattern of some subset of the 159 member countries blocking a deal looked set to repeat late last week, when Cuba demanded action on the U.S. trade embargo.

Roberto Azevedo, the WTO's new director-general, deserves immense credit for crafting a compromise. It is vital for the institution that it be able to function as a negotiating body. U.S. Trade Representative Michael Froman suggested at one earlier point that, in the absence of a deal, the WTO would at least be able to serve as an impartial arbiter of disputes. In fact, there are strong reasons to think that this ability would decay in the absence of legislative progress. First, the rules the WTO would be enforcing would start to look time-worn (already two decades old) without new agreements. Second, there is the persistent question of why large, strong countries should ever give in to judgments in favor of small, weak ones. In the absence of any WTO army or marshal service, and with small countries constrained in their ability to retaliate, large countries will only comply if they feel the need to maintain their "good standing" at the organization. They will only feel that way if the WTO proves itself useful as a negotiating body.

So the bargain at Bali preserves the viability of the WTO. If we want to be wildly optimistic, we can envision a series of such deals that, combined, would begin to address the range of issues originally placed on the Doha agenda -- or new issues, such as data privacy. If participants expect a rapid succession of deals, they may be less likely to demand precise balance of gains in each one, which would certainly make them easier to conclude.

Beyond wild optimism, however, lies fantasy. Here we imagine that the Bali deal reveals the magic of trade liberalization and that, as at the end of a cheap musical, former antagonists embrace and join each other in song. This is a slightly exaggerated description of what Drezner describes as "the surprising forward momentum on trade liberalization." He cites the near passage of trade promotion authority (TPA). In fact, a TPA bill has yet to be introduced. There were rumors last week that a deal may be close, but there have been rumors like that since June. One of the distinctive features of the Bali deal is that, according to Office of the United States Trade Representative, it does not need to be submitted to Congress. That makes it vastly easier than TPA, the Trans-Pacific Partnership (TPP), and the (Transatlantic Trade and Investment Partnership) TTIP, on which there are serious fractures in Congress over issues such as intellectual property protection and regulation of labor and the environment.

Agreements are much easier to reach if the participants can just scale back their ambitions and declare victory. It was necessary and important to do that in Bali. WTO deals are designed to be partial, with leftover issues picked up at a later date. Big free trade agreement deals such as the TTIP or the TPP are designed to be one-offs (or at least infrequent); any move to scale back ambition will leave someone feeling seriously jilted.

Fortunately or unfortunately, there is no need to speculate on the "momentum" effects of Bali. U.S. trade negotiators went from Bali to Singapore, where TPP talks were supposed to conclude. On the home front, this week is likely the last for action by both houses of Congress this year. We will soon know the results.

Photo: ADEK BERRY/AFP/Getty Images. Balinese dancers perform a kecak dance on Dec. 5, 2013, during the gala dinner of the WTO's ninth ministerial conference.

Shadow Government

Memo for David Ignatius: 'Bipartisan' Means Republicans Too

Some op-ed columnists at either end of the political spectrum are crass partisans who merely preach to the converted and whose conclusions can be predicted even before reading them. Paul Krugman comes to mind. Other columnists are consistently interesting and non-dogmatic; David Brooks and Fred Hiatt are exemplars of this (lamentably rare) category. But then there is a third type of columnist, comprising the ones who are frustratingly inconsistent, veering between original insights and ideological blinders. David Ignatius falls into this category, and his most recent column is a case in point.

It begins with the apt observation that the United States confronts a worrisome contradiction: growing security threats abroad and growing isolationist sentiment at home. In his words, "The crackup ahead lies in the mismatch between the challenges facing America and the public's willingness to support activist foreign policy to deal with them. Simply put: There is a splintering of the traditional consensus for global engagement at the very time that some big new problems are emerging."

Ignatius then suggests a sensible, though hardly profound, proposal: the creation of a bipartisan commission of emerging foreign-policy leaders to think creatively about new foreign-policy ideas and help mobilize public support for more robust American international engagement abroad. (Though as an aside, his invocation of the Baker-Hamilton Iraq Study Group as a model is a head-scratcher, given that if Baker-Hamilton's recommendations had been followed in 2007, Iraq would have very likely descended into complete state collapse. Instead, President George W. Bush largely ignored Baker-Hamilton and implemented the surge policy that put Iraq on a much better trajectory by the administration's end).

In Ignatius's words, "a new generation of thinkers could form the bipartisan group I'm imagining." He then lists an impressive collection of names, all of whom are plausible candidates and some of whom, such as Jared Cohen, I am happy to count as friends.

But Ignatius must have pressed "send" too quickly on his op-ed draft. Because the list of names he proposes for this allegedly "bipartisan" commission is composed entirely of Barack Obama supporters, Obama administration officials, and two people who served as advisors to both the Obama and Bush administrations. It is "bipartisan" without the "bi." And it is hard to imagine how such a commission could appeal to a broad swath of the American public if it represented only one end of the political spectrum.

Ignatius enjoys an enthusiastic readership at this White House, so if the Obama administration is considering his proposal to set up this commission, perhaps I can suggest some more center-right names to add to Ignatius's list. For starters, how about Meghan O'Sullivan, Mitchell Reiss, Walter Russell Mead, Juan Zarate, Kristen Silverberg, Jamie Fly, Mike Green, Bob Kagan, Dave McCormick, Kori Schake, Colin Dueck, Mike Singh, and Mike Gerson? That list is just a beginning, of course, and there are many other quality names that could be added.

Besides needing to expand his Rolodex, Ignatius also completely neglects one major factor behind the public's aversion to global engagement: Americans are just reflecting their president's inclinations. As many of us have commented here at Shadow Government, Obama has done very little to generate public support for internationalism and American leadership. This is, after all, the administration of "leading from behind," of "nation-building at home," of severe cuts to the defense budget, and of disillusioned allies and emboldened adversaries. And it is led by a president who has given remarkably few speeches on international security, who has made no effort to pass trade promotion authority, who has few if any close friends among global leaders, and who has spoken openly of his preference for domestic education policy over national security policy.

If the Ignatius Commission to strengthen American global engagement ever gets created, perhaps its first audience will need to be in the Oval Office.

Photo: samdupont/Flickr