The recent collapse of global trade talks has important implications for the many U.S. businesses that import or export a wide variety of goods and services, according to Terence P. Stewart, managing partner of Stewart and Stewart, an international trade law firm based in Washington.
Manufacturers, farmers, and service providers hoping for easier access to new markets will be disappointed by this delay, said Stewart.It is clear that it will take time for trading nations to work out a framework that balances the concerns of their import-sensitive industries and the goals of expanding trade and economic growth.
After nearly seven years of difficult negotiations, trade ministers from over 30 countries, including the United States, meeting in Geneva in late July were unable to reach a breakthrough in the ongoing negotiations for a new international agreement for cutting tariffs and subsidies.
The negotiations were taking place though the 153-member World Trade Organization (WTO), the forum in which international trade rules and liberalization are negotiated. The WTO addresses trade in goods (manufactured or agricultural), services and trade related aspects of intellectual property.The current effort is called the Doha Development Round, named after the city where formal talks were launched and summarizing its goal of helping developing countries to more fully participate in and benefit from trade.
With this impasse and imminent changes in the political leadership in the United States and other key WTO Members, it could take more than a year to get back to a point where a breakthrough is possible.
This will mean delayed chances for gaining improved access to emerging markets for U.S. exporters of both goods and services.The only reductions in tariffs or other trade barriers in the foreseeable future are those that countries decide to undertaken on their own, such as reductions India and Brazil have made on some products in the past, or as part of the implementation of a bilateral free trade agreement (FTA).The United States is in the implementation stage of an FTA with Peru.FTAs with Australia, several Central American countries, Chile, and other countries are already in effect. Agreements with Colombia, Panama, and Korea await action by the U.S. Congress.Other market opening could occur as additional countries, such as Russia, join the WTO and agree to prevailing tariff levels.
The breakdown in the Doha talks also means that new fisheries subsidy rules aimed at reducing overfishing is on hold, as are possible revisions to mechanisms for combating unfair trade practices and other trade remedies, efforts to speed the movement of goods, and revisions to the WTO dispute settlement system.
The impasse might be welcome news for domestic firms concerned with import competition because U.S. tariffs will not be lowered for a longer period of time, according to Stewart.
In terms of issues affecting specific sectors, Stewart pointed out that with the Doha Round on hold, U.S farmers will see no reductions in domestic support rights or export subsidy rights through at least the end of 2009.Also, U.S. producers and marketers of goods other than wine and spirits will not face the possibility of additional limits on using certain names to connote the geographic origin of a product as they presently do on wines and spirits.For now, champagne has to come from that particular region of France but the question of whether such limitations will be considered for products other than wines and spirits is on hold.In addition, the question of whether the WTO will consider what, if any, rights under the Convention on Biological Diversity will be provided to countries from which plants are used for new drugs or for local knowledge that may be a factor in the development of a new drug will not be resolved until the end of 2009 at the earliest.