G-8
summit: nice photo ops, but little action on trade
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Richard D. McCormick:
"It's time for the United States to reaffirm, through its actions
as well as its words, leadership in developing the world economy"
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By Richard D. McCormick
Denver,
USA 1 July 2002 -
Another G8 summit has come and gone, with leaders of the world's largest economies
successfully dodging demonstrators, posing for photographers, affirming aid
to Africa, and talking up trade.
What they didn't do, it
appears, is much to strengthen the world economy.
After two days of talks
at Kananaskis, the Group of Eight agreed on additional aid to Africa, outlined
a new way of distributing that aid, and called for economic reforms on that
continent.
But the leaders announced
no new initiatives to expedite the World Trade Organization's current negotiations,
nor toward removing the trade barriers that threaten economic growth, especially
industrialized-country barriers to developing-country exports.
Worst of all, the U.S. made
no commitment at Kananaskis to correct the disparity between its pro-trade rhetoric
and its recent actions that cast doubt on that commitment. To be fair, neither
the Europeans nor the Japanese showed much leadership either.
As recently as last November,
the U.S. was showing the right stuff, rising above trade disputes over bananas,
beef and various other goods and services, to champion a new round of WTO negotiations.
The success at Doha provided a much-needed lift to the spirits of businesspeople,
farmers, workers and consumers around the post-Sept. 11 world.
The commitment to make the
new trade talks a "development round" was especially encouraging to
people in the developing countries, where exports of farm products an
d textiles
will be the key to climbing out of poverty and hopelessness.
But in the months that followed
the Doha talks, the U.S. slapped new tariffs on imported steel and on Canadian
lumber, while also passing a subsidy-laden farm bill. And now Congress may attach
protectionist strings to the president's long-awaited "fast track"
authority to negotiate new trade agreements.
Business and government
leaders around the world have made no secret of their irritation with a nation
that calls for cooperation against terrorists' actions, but ignores its neighbors'
cries for help eliminating the poverty that is one of the breeding grounds of
instability.
To its credit, the U.S.
announced additional aid for Africa during the recent Monterrey conference on
financing for development. A mechanism for distributing that aid was outlined
at the G8 meeting. But aid is a small bandage for the haemorrhaging economies
of Africa and elsewhere.
Africa produces only two
percent of the world's exports, but even that income far outweighs the continent's
aid from all sources. Its only hope for lasting economic growth is through additional
exports.
In other words, the best
answer to the world's worst problems is not aid. It is trade.
But the developing countries
must have better access to rich-country markets, which means fewer tariffs,
duties and market-distorting subsidies.
It's time for the United
States to reaffirm, through its actions as well as its words, leadership in
promoting, developing and facilitating the world economy.
Since 1947, the U.S. has
been the driving force behind previous trade negotiations, most recently the
Uruguay Round that created the WTO.
And the Bush administration
has been vocal about the need for "trade promotion authority" and
increased trade generally. Commerce Secretary Don Evans has noted that even
a one-third reduction in global barriers to trade in agriculture, services,
and manufacturing would add $613 billion a year to world economic output.
Observers in the business
community, here and abroad, are hopeful that no more surprises, like the steel
tariffs, await our trading partners.
And that the U.S. will reassert
its leadership in the WTO negotiations, reaffirming the WTO's authority in trade
matters and insisting that member nations resolve their trade disputes through
negotiation rather than litigation.
The U.S. and other nations
must advance the WTO negotiations with a spirit of flexibility and a commitment
to continue to reduce or eliminate tariffs, streamline customs procedures, lower
protectionist barriers in agriculture, further liberalize trade in services
and agree on principles of direct foreign investment. They must ensure that
environmental agreements are consistent with trade rules, permanently remove
import duties from e-commerce, reaffirm that labour standards be addressed through
the International Labour Organization, and generally support the free flow of
goods, services, capital and ideas among nations and peoples.
All of those steps are vital
ingredients in opening more markets to developing - and developed - countries.
With renewed U.S. leadership,
the world trading system can deliver the kinds of progress that the rich countries'
leaders only hinted at in Kananaskis.
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McCormick, of Denver, is
President of the International Chamber of Commerce.