This past week, the Obama Administration announced its intention to nominate Rick Barton as the nation’s first ever Assistant Secretary of State for Conflict and Stabilization Operations.  The announcement marks Washington’s latest run at creating a serious civilian “surge capacity” for managing instability and conflict in fragile states.

Rick Barton, if the Senate chooses to confirm him, would bring impeccable credentials to the job.  Former U.S. Representative to the UN’s Economic and Social Council, first Director of the highly regarded Office of Transition Initiatives at the U.S. Agency for International Development (USAID), former UN Deputy High Commissioner for Refugees, and Senior Advisor at the Center for Strategic and International Studies, Ambassador Barton appears to have spent his life preparing for this job.  The question is whether the U.S. government, after repeated failures to build a comprehensive civilian crisis management entity, will allow him to do the job.

Regrettably, for much of the past several decades, the U.S. government’s ability to generate a credible civilian surge in crisis situations has been a bit of a farce.  In an almost unbelievable period of sustained underperformance since 2004, Washington – both the last Administration and this one; both the State Department and USAID; aided and abetted by both houses of Congress – have systematically undercut attempts to create a serious surge capacity on the civilian side of the U.S. government.  The competent civilian reconstruction partner that the U.S. Department of Defense (DoD) and coalition fighting forces have been requesting for a decade remains – perhaps to be overly generous – a “work in progress.”

A quick review of how we got to this point:  The U.S. government learned quickly in the wake of the Afghanistan and Iraq interventions that it lacked the ability to locate and dispatch adequate numbers of competent, highly trained, language proficient reconstruction specialists from State and USAID to help rebuild after coalition forces had initially defeated the opposition.  This is not surprising given that State and USAID together have less than 1 percent – yes, that’s one percent — of DoD’s uniformed and civilian personnel levels.  You will recall the numerous exposes about civilians with only shreds of international experience appearing in Baghdad to “advise” the post-Saddam Hussein Iraqi government in the immediate aftermath of Baghdad’s fall.

In 2004, the Bush Administration – in what some might consider a rare moment of introspection – recognized the gap in U.S. civilian capacity, and pushed through the National Security Council a new concept:  the Coordinator for Reconstruction and Stabilization (CRS) at the State Department.  This new entity, located in the Secretary’s front office to ensure high impact and visibility, was to serve as the centerpiece of a reinvigorated “civilian surge” capacity, recruiting a “Civilian Response Corps” of stand-by reconstruction experts, ready to deploy on short notice, from across all federal departments.  CRS was also to serve as a focal point for enhanced partnership with multi-lateral and bilateral partners, as a number of TransAtlantic governments were building similar conflict management units.  Befitting the importance of the concept, Secretary Clinton once referred to this new U.S. capability as “an army of peace-builders.”

In reality, it is not much of an “army.”  After seven years, the number of full-time Civilian Response Corps members remains under 200 – not exactly the force envisaged in 2004; not the force likely to encourage military colleagues; and certainly not the kind of force that will have serious impact in one or more major conflict and stabilization crises.

Not only is the civilian surge “army” tiny, it basically doesn’t have any bullets.  Despite repeated requests by both the Bush and Obama Administrations for a modest contingency fund to allow the Civilian Response Corps to act quickly in a crisis, the Congress has not appropriated one penny of operational funding to CRS.  With a few notable successes – observer teams in South Sudan, for example – actual deployments by the Civilian Response Corps have been minimal, mostly consisting of two-week “assessment missions” to U.S. embassies in relatively peaceful countries.  Despite Secretary Clinton’s words of praise for her “army,” she chose not to deploy it to Haiti, despite a major crisis just miles from America’s shore.

U.S. Ambassadors, by and large, have viewed this new organization as a bureaucratic threat, rather than as an asset.  USAID, with its own history of crisis response, feels slighted, as well, by CRS, and has offered only grudging support.  Last year, the Treasury Department – a founding partner in the Civilian Response Corps, and a critical player in economically rebuilding failed states – simply dropped out of the “army,” its first major defection.  Meanwhile, the U.S. military, viewing this farce from across the Potomac River, has, understandably, begun organizing its own version of a civilian response corps, made up of DoD civilian employees.

Now, fast forward to the present.  The Administration’s recent Quadrennial Diplomacy and Development Review (QDDR), stated boldly that “embracing” conflict prevention and response in fragile states is a “core civilian mission.”  The QDDR proposed the creation of a new Bureau of Crisis and Stabilization Operations – the outfit Ambassador Barton has been tapped to head – to serve as the “locus for policy and operational solutions for crisis, conflict, and instability.”  The question remains whether the new surge in rhetoric, enthusiasm, and bureaucratic structures will – given the tepid performance of the past decade – translate into a capable civilian surge capacity on the ground when the world decides it needs to manage the next conflictive crisis.

It is not too late to rescue a great idea:  The United States, as well as its transatlantic partners, needs  a civilian surge capacity more than ever, both when confronted with instability in fragile states or when transitional opportunities arise, as in the birth of “Arab Spring” democracy movements in the Middle East.  It is past time to end the timidity and half-measures of the past several decades, and build a serious cadre of highly trained, on-call, conflict and stabilization technical specialists.  Before we have another repeat of the post-invasion Iraq fiasco, the Administration and Congress need to reach an agreement fully to staff, fund, and empower the new Bureau for Conflict and Stabilization Operations and the still-nascent Civilian Response Corps.

James Kunder is a Senior Resident Fellow at the German Marshall Fund of the United States.

Image by Lafayette University.

By Mark Allegrini and Kate Ritterspach

This summer, the issue of food security in sub-Saharan Africa has been thrown into cruelly sharp focus. The United Nations reports that over 3 million Somalis (almost half the country’s population) are in need of food aid, and the U.S. Agency for International Development claims that over 12 million people in the eastern Horn of Africa are in need of immediate food, water or medical assistance. Last month the U.N. declared an official famine in two regions of Somalia, and recent U.S. statistics indicate that nearly 30,000 children under the age of five have already died.

Hunger in Africa is a daily reality for many across the continent, though it rarely makes headlines. The current situation in the Horn of Africa is, to be sure, a particularly dramatic case, with several of its own peculiarities. The current famine was triggered by a severe drought that affected the whole of eastern Africa. Somalia, where the official famine has been declared, is essentially a failed state, and long-standing armed conflict and militant control over some areas of the country exacerbate the effects of the drought and make delivery of essential food aid much more difficult.

However, some of the food crisis’ other contributing factors are more structural, and are not unique to one region or one dry season. Drought, while potentially devastating to farmers around the world, does not automatically produce food shortages or famine. But a basic and crippling problem in many parts of Africa is the lack of reliable, fully functioning food systems. This includes the lack of technology required to protect crops and maximize yields, and, just as crucially, the lack of infrastructure necessary to harvest, store, process, transport, and ship food locally, regionally, and internationally.

Since 2009, major donors have devoted significant attention and funds to agriculture and food security. Encouragingly, there is widespread recognition that real food security requires a holistic, value chain approach. Ultimately, for donors this means a shift away from business as usual, where large sums of money are allocated and spent largely by the donors themselves on isolated projects. The imperative of transatlantic budget austerity has added to the urgency of doing things differently. Donors must leverage the skills and financial resources of other donors, host countries, regional institutions, civil society and businesses. They can no longer go it alone.

Actually implementing this new approach, however, has proven to be a difficult task.  While high-level donor dialogues have produced commitments to coordination and a more holistic approach, there remain large gaps on the ground.  In many cases, donors’ focus on decreasing the number of countries and sectors receiving funds and attention for the sake of efficiency and specialization (“selectivity,” in the development vernacular) has not been accompanied by the necessary increase in coordination.  In order to achieve development goals in a time of smaller budgets and greater need, a focus on partnerships is a good place to start.

While one could characterize most donor programs as partnerships between the donor and host country, it has become essential to look beyond this traditional dyad toward ways to leverage other funding sources.  Generally speaking, the private sector is best suited to create economic growth. Functioning food systems are, of course, ultimately built and operated by business. Therefore, a key part of a donors’ role in ensuring food security should be helping to create a friendly and stable investment climate.  In the context of food security, donors need to bring in both the private sector and civil society to determine where investment can have the most catalytic effect. Once this is determined (for example, in Tanzania a study found that investments in food processing have a higher multiplier effect than those in any other sector), donors and businesses must come to an agreement about the right balance of resources and roles to make investments scalable and sustainable.

While partnerships with the private sector and coordination amongst donors are not new concepts, they have become increasingly important given today’s political and economic realities. To be successful, donors need to find better ways to coordinate and leverage existing sources of funding at all levels.  Country-led plans such as the Comprehensive Africa Agriculture Development Program (CAADP) and the Feed the Future Initiative represent a good first step toward this approach.  Coordinating directly with a country on its own priorities, as in CAADP, and having a clear set of goals and mechanisms, as outlined in the Feed the Future Initiative, create a transparent platform for high-level donor dialogues.  The United States and European Union have gone so far as to identify priority countries that will be the focus of increased efforts at coordination.  However, while much of this work has begun at the highest levels, these are two programs where change will require a renewed focus on ground-level action and partnerships.

There are many instances where ground-level focus has yielded real development results.  Much of the work left to be done lies in identifying, scaling, and duplicating the successes that have already been achieved while getting past those projects that have failed to achieve real results.  It is all too apparent that some partnerships exist more on paper than in reality, and in a time of increased constraints, donors should not shy away from distinguishing success from failure and concentrating resources. Successful partnerships with host countries, civil society, and business need to be recognized and repeated; those that have not been successful need to be honestly acknowledged and left behind.

The German Marshall Fund is supporting a Transatlantic Experts Group to examine successful and failed food security partnerships in east Africa, with the goal of transmitting best practices and policy recommendations to transatlantic and African policymakers and other stakeholders in early 2012. The group will look beyond high-level commitments to partnerships in practice on the ground, and will work to provide an honest view of what works and what doesn’t.

Even aggressive action to increase coordination and focus on successful partnership models will not relieve the current crisis in the Horn of Africa. The current situation calls for intensive and immediate humanitarian relief. However, in order to minimize the likelihood of future famines and food emergencies, much remains to be done in creating the robust, functioning food value chains that so many in the developed world take for granted.

Mark Allegrini is a Program Officer and Kate Ritterspach a Research Assistant for GMF’s Economic Policy Program.

WASHINGTON — The Easter deadline to have the Doha Round endgame in sight has come and gone with no sign that the nearly decade-long stalemate has been broken. The commitment by the leaders of the G20 nations to complete the Round in 2011 now seems out of reach. World Trade Organization (WTO) Director General Pascal Lamy’s entreaties of the leading trading nations to table improved concessions have thus far not generated any meaningful outcomes. Bilateral negotiations between major parties including the United States, the European Union, Japan, Canada, China, Brazil and India have failed to bridge the insurmountable gaps. The “ambitious outcome” from Doha requested by the United States now seems remote. The Round is in a coma and the patient is about to die.

The Doha Round was launched in 2001 to address major challenges faced by the multilateral trading system in the 1990s. It got off the ground thanks to the leadership and determination of the United States and Europe, who put Third-World development at the center of the new negotiations by calling for meaningful concessions by advanced economies, including new disciplines on agricultural policies. But, in the past decade, the Round has stalled several times due to long-standing controversies around agriculture with little progress on reductions of tariffs, trade-distorting export subsidies, and support programs for agriculture.

Recently, negotiations in Geneva have focused more on industrial market access and services, with the United States calling on China and other emerging markets to enhance their commitments in key sectors, such as chemicals. But little has come of this effort.

Pressures from narrow business lobbies and the current sentiment in Congress toward Doha have made it difficult for the Office of the U.S. Trade Representative to accept any deal that does not include further access to China and other major emerging economies.  Hence, the United States seeks additional concessions for chemicals, industrial machinery, electronics, and services such as telecommunications, insurance, and other financial services. While the United States is also requesting guarantees for its exports in soya, cotton, rice, and poultry, it does not offer any concessions in return. The United States remains particularly reluctant to cut agriculture subsidies. Dissatisfied with existing offers, Ambassador Ron Kirk opined last week that the Doha Round “doesn’t have to be over” but that WTO members should decide whether a “Plan B” can be sorted out.

However, it would be wise to weigh the gains against the losses before completely abandoning Plan A. Even with what is on the table now, a successfully concluded Doha Round would provide significant benefits for the United States and the world economy.  Numerous reports, including a 2008 study by Professor Patrick Messerlin of Sciences Po in Paris supported by the German Marshall Fund, show that, without a Doha deal, emerging economies have the flexibility to more than triple their tariffs on average and still not violate their WTO commitments.  Moreover, a successful Doha conclusion based on what has been on the table since 2008 would increase U.S. income by $37.9 billion, while adding 393,000 new jobs to the U.S. economy, according to a study by the Trade Partnership Worldwide, LLC.

Moreover, the death of Doha might have broader political implications than those that can be quantified in numbers. Many low-income economies in sub-Saharan Africa and other parts of the world lack resources and the prospect of financial support to fight unemployment, to feed their entire population, and to maintain their economic, social, and political stability. Without a compromise on a development agenda, governments of low-income countries will not have any motivation to commit to market-based reforms that could provide increased economic opportunities for their citizens.  A failure to conclude the Doha Round might thus also spur broader security problems, economic instability, and food insecurity that could trigger floods of economic refugees seeking to enter Europe and the United States illegally.

The failure of the negotiations would moreover tarnish the credibility and even question the relevance of the WTO. If Doha fails, the already-troubled balance between the rule-making (the Doha negotiations), the executive functions performed by Lamy and the WTO secretariat, and the judicial function—the Dispute Settlement Mechanism (DSM)—would completely be upset. The failure would put insurmountable pressure on the DSM and the executive system that must operate at the behest of the members.  Additionally, a failure might undermine the well-functioning DSM. Compliance with dispute settlement rulings is likely to suffer since countries would no longer feel the same pressure to comply with adverse decisions in order to gain trust, respect, and concessions in the negotiating arena.

The death of Doha would ultimately give a clear carte blanche to rampant regionalization and further fragmentation of trade rules. Finally, the demise of Doha would be an acknowledgement of the lack of transatlantic leadership in multilateral institutions. And it would be unrealistic to expect much progress on other issues that require burden-sharing such as food security or climate change.

There is still time and opportunity to show political determination for a final push to finish the Doha Round this year. But to achieve an ambitious outcome it will require transatlantic leaders to take the helm from negotiators in Geneva, give further concessions to emerging markets, and breathe life into Doha. This patient does not have to die just yet.

Serdar Altay is a Program Officer in the Economic Policy Program of the German Marshall Fund in Washington.

The European Union spends ‚¬55 billion a year on farm subsidies. Until recently the question of where the money goes was a closely-guarded secret. But thanks to a campaign by journalists, researchers and computer programmers, European taxpayers now have the right to know how their tax money is spent. Jack Thurston, Transatlantic Fellow at the German Marshall Fund, has led the campaign since the beginning and tells the story of www.farmsubsidy.org in a short film”Fields of Gold: Lifting the Veil on Europe’s Farm Subsidies”.

The world’s farmers have to produce 70% to 100% more food by 2050, and yet do so while reducing the roughly 30% of greenhouse gas emissions that agriculture causes.   That was the challenge under discussion at Agriculture Day in Copenhagen on Saturday, a day-long set of meetings sponsored primarily by the CGIAR network, the group of crop research institutions around the world that brought us the Green Revolution.    The short answer given by the experts was money.

Most of the discussion was about the challenge of producing the food.   U.S. Department of Agriculture Secretary Tom Vilsack gave statistics from new analyses suggesting that rising temperatures will have serious impacts on world yields of rice, wheat and other crops.     That creates a challenge for the world’s farmers because it suggests the need for more land.  But that leads to deforestation.   Yield gains are therefore important.  Most of the speakers and members of the audience spoke more, and with greater animation, about this challenge of producing this food.

But that won’t be easy.   Governments have allowed funding to decline for basic crop research and “extension services” that send experts to work with farmers around the world.   IFPRI, one of the world’s lead agricultural research institutions, has calculated that $7 billion per year for decades is necessary just to address these yield challenges and keep the number of hungry children from increasing.   Meanwhile governments have spoken about contributing $3 billion per year, which is a major improvement, but probably still not enough.

As hard as it will be to produce more food, that may be the easy part.   Somehow the world has to produce more food on the same land while also reducing the nitrous oxide and methane €“ powerful greenhouse gases €“ that otherwise multiply as we use more fertilizer and make more livestock.     In truth, the group had fewer specifics to offer about solving that problem.

A key question that emerged for me was whether the funds for more food would also be used to encourage those forms of agriculture that reduce emissions.     Those officials involved in distributing funds to boost food production said that right now there are no criteria or mechanisms in place for prioritizing funds at those forms of agriculture that reduce emissions as well.    Increasing agricultural productivity is critical to protecting forests, but it would be a grave mistake to spend money just to boost food production without simultaneously encouraging production techniques that reduce greenhouse gas emissions.   That will include different ways of applying fertilizer, and even just producing some kinds of livestock rather than others.

The need for innovation was in the background but received less explicit attention.    No one would argue that we know today exactly how to produce all the energy the world will need while reducing greenhouse gas emissions.   The same is true for producing the world’s food.   But the need for innovation in farming receives much less attention.

The other challenge that only occasionally emerged was that of possibly using much of the world’s productive land to produce energy.   I spoke about a recent paper I co-authored in the jounral Science with twelve of the world’s leading scientists about an error in how carbon dioxide emissions from bioenergy are counted in international treaties and domestic cap and trade laws.   (See Fixing a Critical Climate Accounting Error at   http://www.princeton.edu/~tsearchi/writings/Fixing%20a%20Critical%20Climate%20Accounting%20ErrorEDITED-tim.pdf ).     In effect, the rules treat all bioenergy as 100% reductions in carbon dioxide compared to the use of fossil fuels.   But if the world produces this bioenergy by clearing forests, that may even increase greenhouse gas emissions.   The rules have to distinguish those forms of bioenergy that reduce greenhouse gases from those that do not.   If not fixed, this false accounting will encourage the clearing of much of the world’s forests, and create enormous competition for the world’s farmland with food production.   As the financial crisis has shown, it’s really important to get accounting rules right, and the principle applies as strongly to counting carbon as to counting money.

INPE, Brazil’s space research institute, also presented an interesting paper, which found that cattle ranching creates roughly half of Brazil’s greenhouse gas emissions through deforestation and methane.   The speakers emphasized the potential Brazil has to produce lots more beef on land that was already deforested.    Expansion of cattle grazing causes even more deforestation that expansion of soy fields and palm oil plantations.   That gives us reason for optimism because the technical potential is there to stop this expansion and whether we do so is a question of will and money.

After years of neglecting the links between farming, insecurity and poverty, last week G8 leaders committed to shifting development policy away from food aid toward food production in the world’s poorest countries. They seek to address the negative fallout from declining foreign direct investment, exports, and remittance flows and the rising fragility in these states. President Obama also spoke in Ghana where he discussed the need to help the extreme poor in ways that are transparent, accountable, and that build on the rule of law.

Notwithstanding the merit and need for these G8 proposals, are these pledges credible? At Gleneagles in 2005 G8 leaders agreed to double their aid to Africa by 2010. Since then Japan has boosted aid 150% and Canada by 206%. But, overall G8 members have only delivered a third of the extra funds needed and there are only 18 months left before the 2010 deadline. At this pace, about half of the cumulative pledge to Africa (roughly $11 billion) will have to be delivered in the final year. Donors also promised to improve the quality of aid, along with the quantity. The endorsement of the Accra Agenda for Action by both donors and developing countries in September 2008 marks an important step in bolstering aid effectiveness. But, implementation has been slow. The G8 promise to “make trade work for Africa” has seen very little progress €“ many U.S. and European trade and agriculture policies continue to run counter to development objectives.

Last week’s events around the G8 might give the appearance that on both sides of the Atlantic there is support for development as a vital tool for achieving peace and stability in the face of the current economic downturn. But, we should not be blind to the serious challenges to fulfilling G8 pledges. Foreign aid is competing with an array of other policy priorities, such as combating unemployment, regulatory reform, climate change, and Afghanistan. In donors, a key player in the political battle over public resources is often the national legislature. To varying degrees, legislatures can be important stakeholders in formulating national development policy, providing oversight and accountability for aid. They can often be a critical stumbling block to G8 pledges, particularly when it comes to untying food aid or boosting investments in developing country agriculture. Yet, the role that legislatures play in implementing aid and G8 commitments for that matter is often overlooked.

To shed light on the role of legislatures in aid budgets and execution, the German Marshall Fund and the Overseas Development Institute recently launched a new paper entitled”The Impact of U.S. and U.K. Legislatures on Aid Delivery.”   This new report seeks to deepen awareness on how the legislature-executive relationship impacts a donor’s ability to pursue its development objectives and international recognized best practice in aid. In light of this relationship, how do nations forge and sustain a sense of shared development objectives? Why has U.S. foreign assistance, like a bureaucratic hydra, continued to fragment and increase in complexity? Is the unprecedented agreement on a single anti-poverty goal for the U.K. aid budget beginning to wane? How do levels of trust and agreement on aid policy between the legislature and the executive impact managerial flexibility in agency decisions? How might these factors impact tied aid or the pursuit of more risky aid modalities like budget support?

While this study is limited to only two of the G8 countries, it offers insights that will inform other donors and policymakers. As G8 leaders seek to pivot away from food aid to food production, they should be honest about what is realistically possible and do the political spadework that will be required at home to deliver. If they do their homework, the G20 meeting in Pittsburgh this September can focus on achievements based on past pledges instead of only aspirations for new ones.

On July 6-7, as part of GMF’s on-going disemmination of the Transatlantic Taskforce on Development, I had the privilege of engaging with over 100 business and policy leaders from Africa at the Commonwealth Business Council’s G8 Africa Business Forum in London. In my remarks to the group, I urged G8 leaders and their counterparts in other nations to refocus on energizing the private sector in Africa to become the primary source of economic growth and poverty alleviation for the continent. Nonetheless, it is likely that G8 leaders will once again fall short on fulfilling promises on development for the poor.

Kofi Annan, Mark Malloch-Brown, Mark Moody Stuart, Paul Collier and many others have contributed fresh thinking on how business can help fight poverty in a new report in collaboration with Business Action for Africa. In February 2009 the German Marshall Fund launched the Transatlantic Taskforce on Development, which I co-chaired with the Swedish Minister for International Development Gunilla Carlsson. It consisted of government, multilateral agency, private sector, and NGO leaders from both sides of the Atlantic. While developing countries were not represented on the Taskforce, we believe that a transatlantic review specifically focused on donor country performance was merited and is critical to helping bring about greater development policy coherence.   Notwithstanding our focus on donor countries, we recognize that successful development can only be achieved when it rises from developing country leaders and their own civil society.

The Africa Business Forum offered   a unique opportunity to reach out to others in the developing world to explore cooperative solutions. It was reassuring to find that many Taskforce findings were consistent with African perspectives conveyed at the Forum including recommendations to support small and medium sized enterprises in their quest to gain access to capital, to push for the completion of the Doha Developing Round of trade negotiations or at a minimum, urge the industrialized countries to grant duty-free and quote-free access in their own markets to the world’s poorest countries. We must redouble our efforts if we are to reach these goals, especially in the context of the economic downturn.

There was a striking candor on the part of African business and political leaders attending the conference.   They expressed doubts about the value of aid because of its unpredicability, and they questioned the intentions of donors given how widely their trade policies diverge from their stated development objectives for Africa. The current   problems in US and European financial markets have turned traditional development assumptions like the Washington Consensus on their head. Some like Dr. Akin Adesina, vice president for the Alliance for a Green Revolution in Africa are calling for a new”African Consensus” that’s focused on agriculture production, innovation and growth.

Kolbe interviews Dr. Adesina on aid, agriculture, and innovation in Africa

Practical efforts aimed at developing seed systems, soil health, adequate water supplies and market access to facilitate vibrant networks of agri-producers, suppliers and distributors are required. It’s ironic that Africans remain supportive of trade and investment while the rest of the world grows more protectionist, defying G20 and G8 pledges in Washington, London, and Italy to uphold the global trading system. GMF has been collaborating with Global Trade Alert, an independent initiative investigating suspicious state measures taken during the crisis and making this information public.

Africa and the West both need a vibrant business sector to prosper. We all require good governance that spurs innovation but limits excesses within a national context and identity. Policy reform is required on all sides. But we must proceed with an eye toward international cooperation that tempers the kind of national impulses and self-interests that can only exacerbate tensions in the international system. The Taskforce is not an end in itself but part of a process that will continue to engage rich and poor alike toward that end.

As leaders of the Group of Twenty  (G20) largest world economies  prepare to meet in London at the beginning of April in the midst of deepening global economic difficulties, there is real and justifiable concern that the meeting is  almost guaranteed to fail. These fears are  based on the scale of the tasks at hand, deep divisions among participating countries, and  an overarching lack of political  commitment to the process — the latter being  evidenced by the outcomes (or lack of them) of the previous G20 meeting held in Washington late last year. At that meeting, among other things, G20 leaders pledged to”refrain from raising new barriers to investment or to trade in goods and services” and to”reach agreement this year on modalities that lead to a successful conclusion to the WTO’s Doha Development agenda with an ambitious and balanced outcome.” Before the ink was even dry on these commitments, leaders of G20 countries like Russia returned home and immediately began to raise trade barriers, while the United States–the host of the summit–effectively killed an attempt to hold a ministerial meeting at the World Trade Organization in Geneva, the only way modalities in the seven-year-old trade negotiations could have been agreed upon last year, which of course  they were not.

There are certainly useful conversations to be had at the G20 level about how to begin building a new global financial architecture that addresses some of the faultlines on display in the financial meltdown during the second half of last year. But with G20 members aggressively pursuing a raft of ill-conceived economic measures at home (bailouts, domestic preference schemes built into stimulus packages,  a return  to industrial policy) in a beggar-thy-neighbor race to export the costs of the global recession to each other, international cooperation to actually get the global economy moving again in the near-term seems depressingly out of reach. Expecting leadership from the G20 on this score is like asking a  bunch of foxes to agree on how to most efficiently operate the chicken coop. A sign of the growing  difficulties can be seen in the fact that there is  faltering political will among leaders to even pay lip service any more to to the kinds of measures that are necessary to help lift the global economy out of recession (or at least prevent  recession from deepening). For example, it is unclear whether  any communique coming out of the London meeting will still include the pledge to conclude the Doha Round,  empty  as this pledge has been in the past. Meanwhile, according to reports from the WTO and elsewhere, protectionism continues its steady upward creep.

Against this backdrop, with the only real debate being whether we are facing an economic crisis of the magnitude of the 1930s or”merely” one like that of the 1970s, Professor Jean-Pierre Lehmann of the Evian Group in Lausanne is circulating a petition. The petition is  addressed  to British Prime Minister Gordon Brown. It  urges that the G20 summit issue”a resounding rejection of protectionism and an unambiguous commitment to an open global market economy along with specific measures and deadlines for implementation.”  Professor Lehmann  is asking business leaders in particular to sign it. This is a particularly  timely intervention. In an accompanying paper entitled”If Globalization is to be Saved… This Time Business Leaders Have to Show Some Guts!” he reminds us that, when the infamous Smoot-Hawley Tariff was passed by the U.S. Congress in 1930, 1,028 economists signed a petition to President Hoover calling for a veto. They were ignored. But, as Professor Lehmann points out,  ”The petition would  have had much more impact if it had been signed by 1,028 business executives.”

Professor Lehmann may have a difficult task in the United States. He will have to get  past the business associations in Washington that appear to have climbed up a tree on global trade and left themselves without a way to get down without losing face. Polls in the Economist magazine have repeatedly shown the relative inattention of corporate executives to trade policy issues, especially the importance of concluding the Doha Round at the WTO,  thus delegating the representation of their interests to the Washington-based  business  associations. These associations  have been pursuing a strategy on trade that can only be described as quixotic at best. In the most recent example, John Engler, Bob Stallman, and Bob Vastine–presidents of the National Association of Manufacturers, the American Farm Bureau Federation, and the Coalition of Services Industries respectively–sent a letter to President Obama in late February rejecting the fruit of seven years of tortuous negotiations in the Doha Round as any basis upon which to conclude a WTO agreement. Their position appears to be that Obama should hold out for a better deal. And  all the while the surrounding fires of protectionism burn  higher and fiercer.

Perhaps the most interesting thing about this letter is the fact that they felt the need to address explicitly the arguments and evidence that have recently been put forth by renowned trade economist Patrick Messerlin of the Groupe d’Economie Mondiale and by economic modelers Antoine Bouet and David Laborde at the International Food Policy Research Institute. They have  forcefully argued for the value of the Doha deal as it currently stands as”a global insurance policy against protectionism.” Instead of simply ignoring these arguments, as their organizations had done previously,  Engler, Stallman, and Vastine  write that:

Some argue that we must quickly agree to accept what is on the table in order to eliminate the”water” (the difference between bound and applied tariff rates) so as to prevent countries from raising their applied rates in these tough economic times. This argument would have some validity if countries were required to eliminate their”water” immediately. But that is not the case. The Doha text gives these countries 10 years or more to bring their bound rates down to today’s applied rates.

This is a valid point, but smacks of sophistry. If their argument is that  the”global insurance policy”  would not kick in quickly enough, why not then adopt a position that calls for the speeding-up or frontloading of a do-able  Doha agreement such that countries adopt commitments to eliminate their  tariff water as  quickly as possible given the current economic climate ? This would be a more constructive position than their  present one, which amounts to  waiting for pie-in-the-sky-when-you-die.  A good  start would be signing Professor Lehmann’s petition,  a way to begin the process of climbing down from the tree  up which they find themselves  stuck.

History tells us that multilateral trade rounds never die, and Doha is no exception. If the negotiations cannot be concluded this year, they will enter a period of hibernation, and things will pick up again when conditions are ripe to engage in a meaningful negotiation (probably during the second half of 2009 at the earliest). We will have to wait for the U.S. election, the nomination of a new USTR, and trade promotion authority from Congress.   India’s upcoming elections and changes in the EU presidency will also delay negotiations.

Despite the slow progress, there are a number of good reasons to continue to support a successful conclusion of the Round.   First, a strong multilateral trading system is essential for world economic growth, stable international trade, continuing agricultural reform and above all, for defending the interests of developing countries. Second, there are issues that can only be solved in a multilateral context; particularly given the agriculture industry’s challenge of increasing production with limited resources in order to meet growing demand for food, feed and fuel.

Looking ahead, a number of options exist for promoting trade liberalization in a post-Doha environment.

Sectoral Negotiations

When the WTO was created, the idea was for the organization to become a permanent negotiating forum that would successively tackle issues of interest to the Membership. It was to start with the agreements on agriculture and services reached in the Uruguay Round.   The recourse to new Rounds of trade negotiations was, at least temporarily, shelved.   However, the EU soon made it clear that if there was to be a high level of ambition in the mandated negotiations, particularly in agriculture, Members would have to agree to launch a new Round that would incorporate their interests:   industrial products, intellectual property, rules, environmental goods and the so called Singapore issues, namely, investment, competition, government procurement and trade facilitation. This finally occurred in Doha in September 2001.

In light of the difficulties experienced since the launching of the Round, including the recent breakdown, it would be desirable – at least once the Doha Round is completed – to return to the original idea of sectoral negotiations.   Reform of trade-distorting policies requires that negotiations in agriculture continue after Doha. In the absence of a new trade round, the only way to proceed would be through the launching, within the WTO, of sectoral negotiations following the implementation phase of the obligations agreed in the Doha Round.

In order to be successful, sectoral approaches should ensure the participation of all Members, regardless of whether they have offensive or defensive concerns on the subjects under negotiation. This is particularly important with regard to agriculture in view of the protectionist and defensive attitudes of so many Members in the WTO (both developed and developing). I am afraid that unless one can have all members on board, one will not be able to properly address important issues such as subsidies, particularly domestic support.   Improved market access can more easily be obtained through other means such as bilateral, regional or preferential trade agreements.

Consensus among members on how to achieve the long-term reform envisaged in the Agreement on Agriculture is a prerequisite.   For example, priority could be given to the elimination of all distorting forms of domestic support (amber box, blue box and de minimis). A possible approach could be to first eliminate the amber box, say over a period of 8 to 10 years, then proceed with the elimination of the blue box, and so on. Similarly, we could agree on the level of reduction and eventual elimination of tariffs (and expansion until then of TRQ’s)

In order to monitor implementation progress of such agreements, we could have special sessions of the Agriculture Committee or eventually the General Council every two years. Alternatively, progress and compliance with the agreed objectives could be analyzed during sessions of the Trade Policy Review, which should be strengthened for that purpose. If countries are not complying or violating their obligations, a role could be envisaged for the Dispute Settlement Body.

Plurilateral Negotiations

I am not convinced that plurilateral approaches are a convenient way out, although I acknowledge that they would be easier to implement. Plurilateral approaches create different categories of Members, undermine even further the multilateral nature of the WTO, and are likely to discriminate against the interests of developing countries. They could also further marginalize the poorest countries in discussions on major new issues of the international trade agenda.  

Preferential Trade Agreements

Regional and bilateral trade agreements may well be the main vehicle for trade liberalization in the foreseeable future.   In agriculture, these agreements can provide improved market access for participating countries. They may also improve the situation with regard to some non-tariff barriers such as sanitary and phytosanitary regulations. However, these agreements will not be able to effectively address domestic support issues.

I believe that the proliferation of preferential agreements – with different product coverage, rules of origin, private standards, exceptions, and measures that are not necessarily in line with multilaterally agreed rules and disciplines – will become overly complex and costly for private enterprises involved in international trade.   Moreover, trade agreements between major trading partners are likely to involve considerable trade diversion, enhancing tensions, disputes, retaliation, and a return to protectionist practices.   These agreements may also further exclude developing countries from the international trading system.

Carlos Perez del Castillo is a member of the International Food & Agricultural Trade Policy Council (IPC) and an independent consultant. He is the former permanent representative of Uruguay to the WTO and was chairman of the WTO General Council in 2003 and 2004.

A joint initiative of The German Marshall Fund of the United States (GMF) and the International Food & Agriculture Trade Policy Council (IPC), this blog collaboration aims to provide insight on concluding the Doha Round and pursuing trade liberalization in the future.

Making progress in multilateral trade negotiations involving more than 150 countries is very difficult. Negotiations require exchanges – offering something for what you want. Given the widely discrepant wealth of developed and developing countries, the poorest countries must, in relative terms, offer a great deal more.

Negotiations can advance because the internal interests of the countries are not homogeneous. Societies are divided and a trade negotiator, who must represent the interest of the country, is subject to pressure from more than one group.     It is sometimes necessary to mobilize interest groups across countries.   This requires a sound communication strategy.

When we started the development of the cotton dispute against the US and sugar against the European Union (EU) in 2001, an important objective was to demonstrate to the world the unfairness of international agricultural trade. The litigation should not only seek a favorable WTO ruling, but also help communicate the implicit unfairness of US and EU countries’ policies vis-a-vis developing ones. Even in case of an unfavorable WTO ruling, the communication objective of seeking litigation would still have been valid.

The decision taken to litigate provided a great communication opportunity. The international media sided with Brazil. Large sectors of society, possibly the majority, in the US and EU supported Brazil in the need for change.   The first result of the arbitration panel concerning the cotton litigation occurred in June 2004. We scored more victories than anybody had foreseen. The US appealed, using all possible delay tactics. We continued to win. This groundbreaking case certainly helped to establish Brazil as a global agricultural leader.   But still, the Brazilian government neglected an important communication aspect of this WTO case. The panels were administered discreetly in Geneva – too discreetly.

The Brazilian government did not sufficiently use the cotton case to create alliances for greater progress in the Doha Round. Even worse, Brazil reached an informal agreement with the US, and accepted the US argument that the Doha Round would lead to a cut in US cotton subsidies. What Brazil should have done was to use the panel finding to press more forcefully for progress in the Doha Round.

They did not use the result of the dispute in the WTO ministerial meeting in Hong Kong, in 2005. Cotton was not even on the Brazilian agenda. The African countries, with whom an alliance was never sought by Brazil, and which had opted for a political route to solve the issue of cotton subsidies, were abandoned. Again, in the recent failed mini-ministerial meeting in Geneva, Brazil did not make cotton a priority.   In short, the tremendous leverage the WTO ruling on US cotton subsidies could have had on the Doha Round was wasted on several occasions.

It is not a question of singling out a product for special treatment, but rather of understanding that it can serve as an important communication tool on unfair subsidy practices. Greater progress in subsidies would have translated into greater progress on market access. The cotton case ruling €“ which is arguably of greater political than economic significance – should have been used by Brazil to push for a better outcome in Geneva.

With the breakdown, or delay, of the Doha negotiations, the Brazilian government is now boasting that it will retaliate against the US for noncompliance with the panel decision. WTO rules allow such retaliation when compliance with a WTO ruling is not forthcoming.     Retaliation requires authorization from the WTO, and could take the form of increased import duties on products imported from the US.   Such an increase in tariffs will hurt US exporters as well as Brazilian consumers, since US imports will become more expensive.   Retaliation may also take the form of ending payments of intellectual property royalties.   These types of retaliation are warranted and unfortunately, necessary. In the strong rules-based system we all desire, the rules that take so many years of negotiation must be followed. Retaliation can also create the political momentum to finally push the decision to lower cotton subsidies, which is a step in the right direction to correct unfair practices in international agricultural trade.

Pedro de Camargo Neto is a member of the International Food & Agricultural Trade Policy Council, president of ABIPECS Brazilian Association of Pork Producers and Exporters, and an agricultural trade policy consultant. He was the Secretary of Production and Trade in the Brazilian Ministry of Agriculture from 2000-2002.

A joint initiative of The German Marshall Fund of the United States (GMF) and the International Food & Agriculture Trade Policy Council (IPC), this blog collaboration aims to provide insight on concluding the Doha Round and pursuing trade liberalization in the future.