Tags: neal | asbury | wto | russia | trade

Russia Joining WTO is Mixed Blessing for US

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Thursday, 09 Jun 2011 09:46 AM Current | Bio | Archive

The Group of Eight (G-8) leaders are moving forward on allowing Russia to join the World Trade Organization (WTO).

This will have mixed results for the U.S. U.S. exports to Russia could double to $19 billion after Russia joins the WTO. But U.S. exporters could lose sales in Russia if Congress refuses to grant “permanent normal trade relations” (PNTR) to keep pressure on Moscow to improve its human rights record or address other concerns, according to the Peterson Institute for International Economics.

This topic isn’t getting much attention. However, the United States has an obligation to demand its trading partners measure up to certain standards if we are ever to make this world a better place.

Along with our constitution and democracy, the U.S. economy is our greatest achievement.

As a condition to participate in the world’s most sturdy and stable economy, our trading partners must:

• strive to eliminate corruption (which is the sinister enabler of poverty); 

• do more to protect the environment so our planet is safe for our children and their children;

• be committed to protecting labor rights and human rights;

• respect intellectual property;

• practice fair trade.

Russia is culpable and we can’t let them off the hook by joining the WTO without first making some concessions on values we hold dear.

In fact, it is time to stop wasting energy, resources and goodwill and admit that although the WTO has reached the critical mass to be self-sustaining, it will never be much more than it is today.

The WTO is the trade equivalent to the United Nations but only wackier. It is much more practical and rewarding to negotiate with one trade partner at a time instead of the 149 members of WTO all at once, each having veto power. Groups are often formed to thwart American initiatives and interests. Russia would certainly be among these.

If we’re talking about the WTO, then we have to talk about the multilateral Doha Round of the World Trade Organization negotiations, which was launched in Doha, Qatar, in November 2001, at the Fourth WTO Ministerial Conference.

The WTO talks are at an impossible impasse over the EU (held hostage by France) and Japan’s inability to give up the “opiate” of agriculture subsidies and a block led by Brazil and India unwilling to agree on meaningful Intellectual Property Rights (IPR) protection.

No country is more important to a successful Doha outcome than China.

By any estimate, China will be an enormous winner from a Doha agreement. China’s exports have dominated world trade since joining the WTO, but it continues to maintain high tariffs, ignores intellectual property rights, manipulates its currency and practices abusive human rights. Regardless of the thumbing of their noses at fair trade, China’s practices would continue under the current parameters of the Doha Round.

Despite its position as an economic and trade powerhouse, today’s WTO rules allow China to have open access to major markets without giving appropriately reciprocal access. In Doha, WTO officials are asking China to commit to a significant opening of its market in industrial sectors – like chemicals, electronics, and industrial machinery. This has largely fallen on deaf ears.

Reuters recently quoted a G-8 official: "As part of its continued efforts to support the recovery of the global economy, the G-8 reaffirms its longstanding commitment to free and open markets. G-8 members of the WTO note with great concern the unsatisfactory progress in the Doha Development Agenda negotiations. We reiterate our commitment to advance the process of trade liberalization and rule-making to strengthen the multilateral system, and are ready to explore all negotiating options to bring the Doha round to a conclusion including with regard to the priorities of least developed countries (LDCs) in line with the Doha mandate."

This is wishful thinking. Doha is doomed to failure. Admitting China to the WTO without requiring it to make a firm commitment to fair trade and to uphold the values all good people hold dear was a huge mistake.

It certainly hasn't served U.S. interests as we have a $280 billion trade deficit with China as a result of their barriers and manipulations practiced with impunity against U.S. exporters without any whimper from the WTO. How about the $300 billion of U.S. intellectual property that China steals annually according to the U.S. Department of Commerce? The WTO remains silent.

The WTO is non-effective and allowing Russia to join without major concessions will bring little to the party, other than adding another member to the anti-American voting bloc.

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NealAsbury
The Group of Eight (G-8) leaders are moving forward on allowing Russia to join the World Trade Organization (WTO). This will have mixed results for the U.S.U.S. exports to Russia could double to $19 billion after Russia joins the WTO.But U.S. exporters could lose sales in...
neal,asbury,wto,russia,trade
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2011-46-09
Thursday, 09 Jun 2011 09:46 AM
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