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Wednesday, August 9

Trade Pacts: bilateral is In, multilateral is Out

After the obligatory wringing of hands and gnashing of teeth about the collapsed Doha Round and dire warnings about what this means for the world's poorest countries, the Chairman of the House Appropriations Subcommittee on Foreign Operations gets down to brass tacks. Writing in yesterday's Washington Post, Jim Kolbe (R-AZ) notes that so many bilateral trade negotiations are now in the works that Congress needs to give the U.S. trade representative more staff.

Kolbe also advises that the Senate should sign off on the House-passed Trade Capacity Enhancement Fund, "a $522 million initiative to help developing countries prepare and implement free-trade agreements with the United States."

So, it's more or less official: even if Doha isn't deader than a doornail, nobody should waste time trying to breathe more life into the WTO's multilateral approach to trade negotiations and the Trade Aid idea promoted by Doha.

Bilateral talks are sprouting everywhere you look:
With Doha negotiations in the deep freeze, the United States needs to embrace an ambitious bilateral trade agenda. Of course, bilateral agreements are no substitute for multilateral ones; multilateral agreements propel the world toward economic openness faster. But without a multilateral round on the horizon, the United States cannot afford to remain idle.

Negotiations with South Korea are a good starting point. No other country the United States is negotiating with has an economy the size of South Korea's. Sealing a deal with that country could revive prospects for broader trade talks encompassing a number of developing nations. We would further increase the momentum for a new round by targeting even larger economies, Japan's foremost among them. A U.S.-Japan agreement would have the added virtue of deepening our most important Asian alliance in the face of threats by North Korea.

America's own neighborhood offers more reason for optimism. Along the Pacific coast, from Mexico into Central America and all the way down to Chile, every country except Ecuador is either negotiating a free-trade agreement with the United States or already has one. On the Atlantic, Doha's failure gives us the green light to initiate talks with Brazil, the largest economy in South America.

The future of free trade hinges on writing these agreements one by one. [...]
Click here for the rest of Kolbe's advice. As to how the World Trade Organization will be impacted by nobody pretending anymore to support multilateral trade pacts -- maybe in the way that the United Nations has been impacted by the Bush Preemption Doctrine. A tremendous amount of ink and energy will be funneled into declaring the emperor is not naked.
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