The spat across the Atlantic over war with Iraq could cause
unforeseen collateral damage to a world trade-liberalization round.
"Bad relations between the United States and France and Germany
aren't going to help," says Walter Russell Mead, a senior fellow at
the Council on Foreign Relations.
Last summer Congress gave the Bush administration "trade
promotion authority" to negotiate trade deals and present them to
the legislature for an up or down vote with no opportunity for deal-
But politics, at home and abroad, are making the conclusion of a
world trade round highly unlikely before 2005 at the earliest, maybe
not before 2009.
In the US, President Bush will be concentrating on his reelection
"He will have no desire to bring contentious trade issues to
Congress in the months before the election," says Harald Malmgren, a
veteran trade consultant in Washington.
Global trade negotiations always involve cuts in trade barriers
that are attacked by affected industries and their employees.
The Doha Round, launched by the 144-nation World Trade
Organization at a meeting in 2001 in Doha, the capital of Qatar,
will be no exception. So Mr. Bush probably won't let negotiations
get really serious until his second term - if he wins in the 2004
Abroad, the insults the Bush administration has thrown at "Old
Europe" won't improve the negotiating mood. Europeans, though not
entirely comfortable with "Pax Americana," have little desire or
prospect for matching American military might. But they are able and
willing to go chest-to-chest with the US on trade and economic
"It is one area where they are an effective counterbalance to the
United States," says Mr. Mead.
Three negotiating areas are crucial to the European Community and
the US: agriculture subsidies and exports, the Airbus competition
with Boeing, and "cultural exceptions."
France and some other European nations are keen on protecting
their domestic "culture," including television and movies.
Europe will likely provide Airbus with enough research or other
subsidies to assure its competitiveness. It has become a symbol of
European technological competence.
And Europe will not give up its farm subsidies to let efficient
American Midwestern farmers take their agricultural market.
Europeans love their rural landscapes. Farmers are an important
political bloc. And there is some genuine concern that there be
enough domestic production for Europe to feed its own people in an
emergency. Uncertainties circling war with Iraq add to European
uneasiness over US might.
Older Europeans remember the grim food shortages after World War
II. So do the Japanese, who are keen to protect their rice farmers
from foreign suppliers.
"In Europe and Japan, food is a security issue as well as an
economic issue," says Mead. With the US Navy standing as the key
guardian of the world's sea lanes, many in Europe and Japan are
hesitant "to hitch their food wagon to globalization."
Since the US Senate is unlikely to approve any global trade deal
that does not win farm-trade concessions from Europe and other
nations, prospects for a successful round do not appear great. …