The time has come for transatlantic statesmanship on trade
It must be frustrating being the President of the European Commission: a whole lot of responsibility but very little power. When Jose Manuel Barroso meets George W Bush at the White House next week he may be able to offer some advice to a US President who has just lost control of Congress and is watching his Iraq strategy slip further into chaos.
On the agenda is climate change, international security and global trade. Bush is currently the world’s leading climate change denier and the chances of him recanting are as good as those of snowball in hell - or the polar ice caps, the way things are going. On international security, the EU lacks a standing army and even a foreign minister, so Barroso has very little to offer here. It is only trade policy that the two men can use this high level meeting to achieve something concrete: sealing a deal that has so far eluded their respective trade negotiators at the WTO in Geneva. Presidential ‘fast track’ Trade Promotion Authority (TPA) will expire in a matter of months, and so if there is to be a deal on Bush’s watch, it needs to be made now.
While the days when the EU and the US could stitch up trade deals bilaterally and the rest of the world would follow along behind are long gone, it is American intransigence on farm subsidies and European stubbornness on agricultural tariffs that caused the collapse of the Doha talks last summer. At the WTO in Geneva there is a the sense that one last push to reconcile differences on agriculture would enable negotiations on manufactured goods and services to fall into place. With farm commodity prices rising - and with them farm incomes - both the EU and the US have probably just enough negotiating space to improve their offers. As a down-payment for developing countries, Bush could offer to open US markets to exports from the world’s 50 very poorest countries - something the EU has already done - and the EU could extend its existing trade concessions to the whole of sub-Saharan Africa.
Even with TPA, Bush will have to get any deal through a Congress now controlled by a group of resurgent Democrats who were swept to office on the back of Bush’s personal unpopularity and in many cases with a strong whiff of protectionism in their campaigns. Whatever they said on the campaign trail, Democrats in Congress know that what they do this year and next will determine how successful they will be in raising the enormous amounts of money needed to run a successful presidential bid. Talking tough on trade might win support from the industrial heartlands and organized labor, any Democrat challenger for the White House knows that it is the big money donors from California and Wall Street that count. These are wealthy people who have made their fortunes from the global economy, embracing the opportunities of new technology in a changing world. They will not take kindly to a party showing protectionist tendencies. And when it comes to the crunch, would the party of Woodrow Wilson and FDR really block the trade round - and in doing so wreck the WTO, one of the very pillars of international multilateralism?
In Europe it has been France that has most strongly opposed any further opening of agricultural markets of ‘fortress Europe’. Over the years President Chirac has run rings around a succession of reform-minded leaders from Britain and Germany and is currently holding a gun to the head of EU Trade Commissioner Peter Mandelson, threatening to veto anything he agrees that is against the national interest of France. But France is changing and Chirac is on the way out. Whoever is elected as the new French President in May this year will be able to blame a Doha deal agreed now on his or her predecessor, and thereby escape the wrath of the voters. But again, time is short.
With the European integration project in the doldrums since the rejection of the draft EU constitutional treaty by French and Dutch voters, Barroso has been trying to regain some legitimacy and popularity for European institutions, largely on the basis of his Commission’s ability to deliver tangible benefits for European citizens. But so far he’s looked more like a competent administrator than a great statesman.
Neither Barroso nor Bush have to face the voters in elections. This should embolden them to break the deadlock in the world trade talks. They can surely withstand the political heat from powerful domestic farm lobbies in the knowledge that history will recognize the courage and wisdom of their actions. Rescuing the Doha Round would be an act of transatlantic cooperation with a lasting legacy.