Meanwhile, the second article touches on a host of related issues such as various bilateral trade deals (most of which are also in limbo) and a farm bill in Congress that, if anything, grants even more subsidies in contrast to recent concessions made by US WTO negotiators on Doha. Already there is talk that the US will only escape inaction when the rest of the world's countries start making deals with each other, bypassing the US:
Success in global trade negotiations will most likely have to wait until a new president is in the White House, according to senior lawmakers on Capitol Hill.
The scepticism in Washington about a near-term breakthrough in the troubled so-called Doha round of trade talks underlines the difficulties faced by negotiators, even as officials at the World Trade Organisation in Geneva report some progress in the discussions.
Charles Rangel, the New York Democrat who chairs the House of Representatives’ ways and means committee, which regulates foreign trade, told the FT in an interview: “At this point in time I don’t think we have to deal with Doha, unfortunately . . . I think President Clinton is going to have to deal with it.” Mr Rangel is a long-time supporter of Hillary Clinton’s bid for the White House.
A senior aide to Max Baucus, Mr Rangel’s counterpart on the Senate finance committee, said the lack of progress in Doha had pushed the subject well down the senator’s agenda. Collin Peterson, chairman of the House agricultural committee, told the FT he had more or less discounted any chance of near-term progress in Doha.
Last week Crawford Falconer, the New Zealand WTO ambassador who chairs the farm talks, said there were encouraging signs of countries negotiating seriously over reducing farm tariffs and subsidies, including promises of cuts from the US. “The leviathan is beginning to move. That’s my impression. We’ll see if it remains that way,” he told delegates, according to one official present.
Susan Schwab, US trade representative, said she understood the scepticism in Congress given the lack of progress so far, yet argued that a deal was still possible.
But she underlined that any further reduction in US farm subsidies was contingent on big cuts in industrial goods tariffs by developing nations.
Some big emerging market countries have said that tariff reductions suggested in a text by Don Stephenson, the Canadian ambassador who chairs the goods talks, were too drastic.
“The countries that were signalling that they were going to be obstructionist in terms of the [industrial goods] text: what is their stance?” Ms Schwab said. ”Ask Brazil. Ask India. Ask Argentina. Ask South Africa. Ask China.”
Mr Rangel’s heavy discounting of Doha’s immediate prospects is echoed widely across Capitol Hill and most of Washington.
With the Democrats in charge of Congress and President George W. Bush’s political capital dwindling weekly, there is a widespread feeling that, at least until next year’s presidential elections, any progress in trade talks will be narrow, halting and weighed down with scepticism about the benefits of globalisation.
Many argue that the expiry over the summer of “trade promotion authority” (TPA), formerly known as “fast-track”, which allows the White House to submit pacts to Congress without having them picked apart line-by-line, has diminished trading partners’ enthusiasm for negotiations.
Charles Grassley, the senior Republican on the Senate finance committee, says: “It is a chicken-and-egg situation. We have Democratic leaders in the Congress say: ‘When there is some sort of a breakthrough in Doha, we will do something on TPA. And then you have people around the world saying: why should we do something on Doha if the president doesn’t get TPA?’”
The four deals in the pipeline submitted before TPA expired – Peru, Panama, Colombia and Korea – arouse varying enthusiasm.
Their importance to US trade is in any case limited: only Korea is among its top 40 trading partners.
Peru is the first and most likely deal to be passed, not least because Mr Rangel and fellow senior Democrats have enshrined within it sufficient protection for labour rights and the environment that they can portray it as the kind of fair and balanced trade deal they want to see.
Panama may be of sufficient foreign policy importance to get through Congress. But the election of a man wanted in the US for the 1992 killing of a US soldier in Panama as president of the country’s congress has been cited as a “serious obstacle” to approval by Max Baucus, chair of the Senate finance committee.
In Colombia, the murders of trade union leaders there have alarmed Democrats with strong affiliations to organised labour.
Meanwhile ongoing problems with Seoul allowing American beef and cars into its market seem likely to give the Korea deal at best an extremely rocky ride.
The administration, which remains free-trade in its rhetoric, insists that the strategy of “competitive liberalisation”, or moving forward on all fronts, remains in place. Putting deals like the Korean “free trade agreement” [FTA] on hold risks the EU, which is also negotiating a bilateral pact with Seoul, stealing a march.
Susan Schwab, US trade representative, said in an interview: “A straightforward assessment of the [Korea] FTA is [that] it is a very strong deal for any US auto maker that wants to increase exports to Korea. [Question for Schwab: Why would Koreans need SUVs? Even the US government encourages Americans to buy Korean cars in the interest of fuel efficiency according to a recent flap.]
“When other constituencies . . . start to focus on the benefits of the FTA, they will see a real level of commercial benefits.”
On the global scale, flickers of movement at the Doha talks in Geneva are not registering on Capitol Hill.
The House of Representatives has just passed its version of the “farm bill”, which will set agricultural support for American farmers for the next five years.
Even more lavish than the current one, it could require radical surgery if the US accedes to demands from its Doha negotiating partners for cuts in farm subsidies.
Ms Schwab says American farmers would prefer to get more export market access than subsist on federal payouts. “This farm bill is not our Doha round offer” [???--don't the farm bill and the Doha offer need to be reconciled with each other?]
But a former administration official says American farmers will make tougher demands on developing countries to cut agricultural tariffs as a trade-off for reducing US subsidies, making an agreement yet harder.
Many observers think the outlook is bleak. Fred Bergsten, director of the Peterson Institute for International Economics, says: “Assuming the Democrats take the White House next year, there will be at least a couple of years’ inaction on trade while they try to enact legislation to soften the blow of globalisation . . .
“Only then will the economic and foreign policy consequences of having the rest of the world sign trade deals between each other and ignore the US become sufficiently apparent for them to take action.”
It may not just be President Hillary Clinton who is asked to agree a difficult deal on Doha, but a President Clinton who is already running for re-election.