September 2, 2011 / 4:59 PM / 8 years ago

Fifty economists ask Obama to "step up" on trade

GENEVA/BRUSSELS (Reuters) - Fifty economists have written to ask U.S. President Barack Obama to “step up to the plate” on World Trade and champion a last gasp deal on the moribund Doha round of world trade talks.

A Mexican worker uses a saw to shape fiberglass at a factory near the border with Texas, October 29, 2009. REUTERS/Tomas Bravo

The letter was drafted by Jagdish Bhagwati, a professor at Columbia University, and signed by economists based in the United States, Canada, Europe, Australia, Singapore and Japan, as well as three former trade ministers and a former president of Mexico, Ernesto Zedillo.

“As the window of opportunity for a robust deal on Doha Round is closing, with the United States now about to enter into an election mode, we make an appeal for Presidential leadership in the United States to put Doha into closure along with the three Free Trade Agreements that finally seem close to passage by bipartisan agreement,” said the letter, which was sent on Wednesday.

“The fear of the labor unions that trade with the poor countries produces poor in the rich countries is mistaken. The demand of the business lobbies that want ever more concessions from others is excessive. The contention of some experts that the gains from Doha are minuscule is flawed in neglecting the costs of the failure of Doha and the ensuing damage to the WTO.

“The retribution by a protectionist public is greatly exaggerated: many jobs today depend on both exports and imports and the polls reflect that,” the letter said.

In an emailed reply to Reuters questions, Bhagwati said the United States remained the one country that could take the lead, and the letter, timed to go out in the run-up to Obama’s jobs speech on Sept 8, was intended to “nudge” him into action.

One of the signatories, Fredrik Erixon, director at the European Center for International Political Economy, said that without Obama leading, the trade talks would make no progress.

“If the White House wants to lead, if they want to turn to a more proactive trade policy, then we can see a turnaround rather quickly,” he said.

The call to rescue Doha comes as many trade experts in Geneva, the home of the World Trade Organization, openly despair of a deal and wonder if any world leaders will be bold enough to declare the Doha round dead, which some think is the only way of making fresh progress on liberalizing trade.

The letter echoes an attack on Obama’s trade policy in July by World Bank President and former U.S. Trade Representative Robert Zoellick. His call for a turnaround was dismissed by Michael Punke, U.S. Ambassador to the WTO.

Asked if the signatories were blaming the United States in particular, Bhagwati said: “Only in the sense that almost everyone following the Doha negotiations has noticed that Mr Punke simply says no to anything that could help close Doha.”

The Doha talks have had the misfortune to collapse twice. After a failure to clinch a deal this spring, WTO Director General Pascal Lamy tried to get the 153 member states to agree on a lesser package of reforms that could help the least developed countries (LDCs).

But that flopped too, and now all the main players — including the Americans, Europeans, Chinese and Lamy himself — are keen to sidestep any blame.

“I know that Pascal favors a ‘mini’ Doha settlement, just to say that Doha has not failed,” Bhagwati said. “But that means it is in intensive care; and the US will not agree even on emasculating Doha down to just a few items for LDCs.

“I think we ought to keep trying until mid-October. If Obama fails to stand up for what needs to be done, then we ...ought to seriously consider formally burying Doha.”

The next big date on the trade agenda is a meeting of WTO trade ministers in mid-December, which was once widely regarded as the target date for a Doha deal. But Erixon said nobody believed any longer that it could yield a groundbreaking deal.

“The alternative to an orderly ending is a disorderly ending,” he said. “For new things to grow some old things need to die.”

Reporting by Tom Miles, editing by Rosalind Russell

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