So, is Washington ready for another controversial take on a tough issue? Trade attorney Bob Lighthizer thinks so and has proposed what some may see as a radical step on trade policy in an op-ed in today's New York Times: Stifling the Economy, One Argument at a Time . In that piece he calls for pulling the plug on the Doha Round of multilateral trade negotiations and specifically re-focusing our trade agenda on four major problems: the US-China trade balance; currency manipulation; unfair tax rules; and, regulatory disparities.
I worked with Bob on trade issues decades ago on the 1988 Trade Act and the Uruguay Round negotiations when I was on Senate staff and he was at USTR in the Reagan Administration and later in private practice. Bob makes a good point. The basic premise of the Doha Round -- as the development round -- may no longer be central to the issues facing the trading system. I wondered if they ever were. Back in 2001, I wrote a paper on After Doha: What The WTO Is Not Talking About. In that piece I speculated that the Uruguay Round might have been the last major comprehensive round of multilateral trade negotiations. The complexity and range of issues now under discussion may be simply too big to handle in one package. These negotiations worked well when the issue was trading off tariffs on steel for tariffs on shoes -- when the goal of the discussions are to push tariffs lower on everything. But when the trade-offs involve balancing environmental regulations with investment issues, the process is not as clear. This is a point I and others have made before (see earlier postings).
My 2001 piece also made the point that for all the various issues being raised in the Doha Round, a major piece is missing:
Not on the table is a comprehensive look at policies toward information and other intangibles. We are moving to a knowledge economy. Knowledge is both an increasingly important input into the production process and an end-use commodity in and of itself. As the role of information increases in both our economic and social systems, issues of control of information will become increasingly central to our policy and political debates. Parts of the issue are included in the WTO agenda, such as: Trade-Related Aspects of Intellectual Property Rights (TRIPS); the work program on electronic commerce; trade and investment; and the proposal for a new discussion on technology transfer. Missing from the discussions is the recognition of the interconnection between these areas.So, I don't know if Bob is right that we should pull the plug on Doha -- or whether we should make a last push to wrap up something and call it a success. Nor am I sure that he has the right set of issues. For example, his concern over unfair tax policy focuses on the use of a value-added tax by other nations. Rather than fight this, I think we should be adopting it.
But I agree with him and many others that the major issues confronting trade policy are outside of and beyond the Doha framework. We need to re-orient our policy towards issues that matter, not simply continue on the same old path.