The Wall Street
JournalBy Robert B.
ZoellickAs the U.S. economic
locomotive picks up speed, the 146 members of the World Trade Organization
have an opportunity to spark other engines to build global momentum. This
week's meeting of the WTO in Cancun is a midpoint on the growth track first
laid at the Doha Ministerial in November 2001. Doha established goals for
lowering barriers to global trade and development by 2005. At the
Cancun meeting we will seek to specify the negotiating frameworks for attaining the Doha goals. Given the diversity and number of participants,
this is no small challenge.
The Doha Development Agenda
aims to connect the energy of globalization to a widening network of
development through four circuits. First, development depends on global
economic growth, and freer trade accelerates growth. Over the course of the
past decade, exports accounted for 27% of U.S. growth. World Bank
points out that during the 1990s, incomes in developing countries
that lowered trade barriers the most grew three times faster than earnings in
countries that remain closed.
With more open markets,
American workers, farmers, and consumers will gain from lower costs, a
healthier global economy, and the freedom to buy and sell around the world.
The two major U.S. trade agreements of the 1990s -- the Uruguay Round and
Nafta -- increased the income of an average American family of four by
$1,300 to $2,000 a year. Yet the U.S. has supplied much of the world's
purchasing power over past years. America is supporting over $500 billion of
international sales in excess of U.S. exports, because U.S. growth has
outpaced that of the other major economies.
The global economy needs
more balanced growth. The Doha negotiations could encourage the European
Union and Japan to reallocate resources from agricultural toward more
poductive enterprises and to undertake structural reforms. Freer trade would
enable developing countries to raise living standards, attract investments,
manage debt service, and earn a place in global sourcing networks.
Second, people in Latin
America, Africa, and Asia want to sell their products to developed countries.
If three major continents -- encompassing some five billion people -- cannot
prosper, we will all pay the price. That is one reason why the U.S. has
proposed to slash subsidies and tariffs on farm goods and eliminate tariffs
and non-tariff barriers on manufactured goods. The World Bank estimates the
elimination of barriers to manufactured and agricultural products would
boost global income by over $830 billion, with two-thirds of that gain
accruing to developing countries. The U.S. has also pointed to the potential
gains of a freer services trade, with a minimum of $900 billion for
developing countries alone, according to the World Bank.
Third, developing countries
that lower their barriers to trade benefit both their own consumers and other
developing countries. About 70% of the tariffs that developing country
exporters pay are imposed by other developing countries. Roughly
three-quarters of the trade gains for developing countries can only
be achieved by cutting their own barriers.
Finally, the WTO should
customize solutions to address particular problems of development. India
needs to reassure its millions of subsistence farmers. Africa needs
assistance to strengthen the rule of law and support small business.
Small island economies, particularly in the Caribbean, face unique
challenges. We can consider longer time frames for liberalization and special
adjustment provisions in such cases. This year the U.S. is devoting some $750
million to help developing countries build their capacity to benefit from
trade. Both the World Bank and the IMF have pledged to help.
If, however, attention to
the special problems of some developing countries were interpreted as a
general license to avod trade competition by some 120 self-determined
developing economies, we would create a modern mercantilism that fails the
cause of development. Strong economies and a healthy trading system depend on
a broad-based willingness to import as well as export. The WTO will only be
successful if developed and developing countries both assert their individual
interests and accept a sense of mutual responsibility.
Some developed countries
seek cuts for manufactured goods, but not for agriculture. Some developing
countries call for the reverse. A few of our partners seek to add new issues
to the negotiations. Too many countries argue that others should open to
competition but that they themselves cannot. So the Cancun meeting may only
end up compelling participants to recognize that successful multilateral
negotiations in the WTO require a common understanding on how to combine
ambition and compromise.
The U.S. is promoting
ambitious results in all three core areas: agriculture, manufactured goods,
and services. These are the sectors that will drive the global economy and
development. Over past months, the U.S. has led the process of translating
initial demands into realistic negotiating approaches. To help give impetus
to the Cancun meeting, we overcame the gap between developing countries that
were concerned about immediate access to critical medicines and the companies
that invest in developing life-saving drugs for the future. We worked with
the EU, Canada, and other developed and developing countries to outline plans
to cut tariffs and non-tariff barriers for manufactured goods.
After encouraging the EU to
reform its Common Agricultural Policy, we thrashed out a draft framework to
cut agricultural subsidies and tariffs. This approach commits to deeper cuts
than achieved in the last global trade negotiations -- if others give
American farmers a fair chance to compete, too. And we have worked with all
our trading partners to craft a balance of interests.
President Bush has
demonstrated his commitment to fight for freer trade so that Americans can
compete on a level playing field. He worked with Congress to restore
authority to negotiate trade packages for an up-or-down vote. The U.S. now
has free trade agreements with six countries, is negotiating with 14
more, and is pressing ahead to establish free trade throughout the Western
Hemisphere. As our coalition for openness expands, other countries from
diverse regions are embracing the president's vision of "a world that trades
in freedom." Therefore, our aim in Cancun points straight at the Doha target:
The United States wants to open global markets across-the-board, to expand a
virtuous circle of trade and economic growth for developing and developed
economies that can strengthen one another.
Mr. Zoellick is the U.S.
Copyright 2003 Dow Jones
& Company, Inc.