Global Policy Forum

By Luke Eric Peterson

There may come a day when the G-8 protestors who daubed graffiti on the Geneva headquarters of the World Trade Organization will find themselves pining for the much maligned WTO. At the Doha Round of world trade talks, the United States is already making plans for life without another multilateral institution.

Last month, Robert Zoellick, the Bush Administration's point-man on trade relations, told Reuters that the U.S. is building a "Coalition of liberalizers" in case the Doha Round doesn't reach fruition.

The impetus for the U.S.'s new go-it-alone posture was a decision last August by the U.S. Congress to grant the President so-called Trade Promotion Authority (TPA). Armed with TPA, the Administration can negotiate free trade deals which Congress can either approve or reject, but cannot subject to amendment or lengthy analysis. And the new negotiating authority has freed the President to consummate relationships with multiple trading partners. In fewer than nine months, talks have been launched with Chile, Singapore, Australia, El Salvador, Guatemala, Costa Rica, Honduras, Nicaragua, Panama and Morocco, and are being explored with a number of other Asian, African and South American nations.

This explosion of regional and bilateral trade talks has been a major factor in the WTO Doha Round. U.S. enthusiasm for the multilateral forum has flagged, as the Administration has recognized that it can extract much deeper concessions from trading partners by playing them off one another in one-on-one negotiations. Recently, U.S. Trade Representative Robert Zoellick spelled out the Bush Administration's new strategy in testimony before the U.S. Congress: "Since securing TPA, the President has had the key backing we needed to press ahead with trade liberalization globally, regionally and bilaterally. By advancing on multiple fronts, we are creating a competition in liberalization." Zoellick also gave some indication of what it takes for countries to win this competition for a trade deal with the United States: a willingness to prostrate themselves to U.S. foreign policy and national security goals.

In a separate speech before the Washington-based Institute for International Economics, Zoellick warned that under the Bush Administration: "(A free trade agreement) is not something one has a right to. It's a privilege." And when it comes to prospective trade partners, Zoellick noted that the Bush Administration now expects "cooperation — or better — on foreign policy and security issues." Indeed, Zoellick conceded that this new litmus test would make it difficult for the U.S. to consider a free trade deal with New Zealand, a nation which had failed to support the U.S.-led war on Iraq, and has long refused to allow nuclear powered vessels into its waters.

While sounding the death knell for New Zealand's free trade aspirations, the Administration's new policy has been music to the ears of neighbouring Australia. A loyal member of the "Coalition of the Willing," Australia recently saw its trade negotiations with the U.S. placed on a fast-track, by order of the U.S. President.

Washington's new trade policy also has been generating unease in other national capitals. Chile, which had concluded negotiations on a trade pact with the U.S. late last year, saw that agreement placed in jeopardy when it became clear that Chile would not use its UN Security Council seat to vote for second UN Resolution on Iraq in March. Although the U.S.-Chile deal simply needed to be translated and signed, for several months its fate remained as uncertain as that of a Guantanamo Bay prisoner. Only a concerted lobbying campaign by business and key U.S. Senators encouraged the Administration to break its sullen silence late last month, and to announce that the agreement will be signed after all.

Other countries are less likely to squeak through the door. According to one Washington-based trade news publication, the Administration has put the world on notice of its "long memory" for diplomatic slights. And as countries like Chile or New Zealand slide down, or off, the priority list, more compliant nations, like Bahrain, are moving up the queue. Although trade in oil between the U.S. and Bahrain is already largely free, and there are few other serious economic benefits to be had by the U.S. from a trade pact with the tiny Gulf state, the Administration views Bahrain as a testing ground for broader free trade deals with other Middle Eastern nations willing to move closer to U.S. policy objectives.

No longer does the Administration's approach to trade liberalization appear to be guided by economic considerations. The long-standing theory of comparative advantage — the notion that countries should focus on producing what they produce best, and trade with others for their other needs — seems to have been supplanted by a theory of comparative sycophantage, as countries jostle with one another to pledge their allegiance to U.S. foreign policy goals.

Despite the heavy economic price which comes with being frozen out of the U.S.'s preferential trade circle, not all nations are rushing to hand the keys to their Foreign Office over to Washington. New Zealand Prime Minister Helen Clark has been unapologetic in the face of the U.S.'s rebuff: "We have to be free as a sovereign country to make our own foreign policy." At least some Western nations are showing backbone, instead of pursed lips.

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