In yesterday’s New York Times, trade economist Jagdish Bhagwati takes the Obama administration and Congress to task for letting the World Trade Organization’s Doha Round languish. Bhagwati points out that with all the attention focused on bilateral agreements, special interests can have a hey-day and exercise their clout. Witness what trade unions have increasingly demanded with the pending Free Trade Agreements, cloaking their protectionist demands with talk of worker rights.
When the United States negotiates bilateral deals with other countries, the unbalanced nature of the one-on-one negotiations also opens the way for all manner of lobbies to ram their self-serving demands into the agreements.
Bhagwati noted that in a multilateral trading system, special interest lobbies are often stymied by emerging developing nations that clearly see the anti-competitive protectionist slant.
American labor unions have learned these same tricks, urging Democratic legislators and administrations to block bilateral trade deals unless their demands for labor protections are met, as they did with the three long-delayed agreements now pending.
But larger countries with more clout, like India and Brazil, will allow no such provisions. They correctly see these labor provisions as a form of anticompetitive protectionism. And they point out that it takes chutzpah for the United States to argue for labor rights abroad that often exceed those at home.
Bhagwati calls for President Obama to bring Democrats and Republicans together to add the Doha round to the packages of pending trade deals:
The president should ask Democrats and Republicans to immediately add the Doha round, as it has been negotiated over 10 years, into the same all-or-nothing package as the three bilateral deals. Such a bold gesture has a precedent. After sitting on the fence his first year in office, President Bill Clinton embraced the cause of trade, despite the political costs, and fought fiercely, and against great odds, for the Uruguay round. Mr. Obama should do no less.
Amen to that.