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Serving: United States

WTO: Sound and fury, little else

This will be my last report to you from Hong Kong. After five days of briefings, press conferences, interviews, sleep deprivation and spicy Thai satay, I'm ready to come home.

Travel halfway across the world and it's easy to lose track of time. Suddenly I realize, it's a week before Christmas. I look out the window of the sparsely-filled hotel dining room where I'm writing this, and I see massive 40-story skyscrapers decked out top to bottom with glittering Holiday lights. There's some cheesy elevator music playing and I think, this could just as easily be Chicago.

All around Hong Kong you see the positive impact of globalization: bustling, clean streets, magnificent public transporation, a thriving economy, multicultural, well-educated people. This shining jewel of free trade, where hundreds of multinational companies call home, is a city on the move.

Unfortunately that was not the case with the WTO this week. The United States came to this crucial ministerial meeting armed with an ambitious proposal to make deep cuts in protectionist trade barriers worldwide. That proposal never came close to passage; The European Union made sure of that. Watching the EU and U.S. bicker this week was like watching your kid brother and sister go at it. Amusing on one hand and just a little disconcerting on the other.

While WTO negotiators got nowhere inside Hong Kong's massive Convention Center, Korean farmers outside were protesting. The activists were worried that global trade rules might force them to open up their protected rice markets and allow cheaper rice to be imported. Japan and Korea have put tariffs on rice imports that make it impossible to sell rice in to those countries.
After all, it's not easy to get two people to agree on something. It's not easy to get one company to agree with another on a business deal. Now, try getting governments together to agree on things. Try 150 of them. That's one thing farmers don't think about when they hear these frustrating no-result reports from these meetings. Believe me, the folks like U.S. Trade Representative Rob Portman are very serious about getting some kind of agreement this week. They were stuck in those rooms until 3 a.m. each night, hammering at each other. He and Secretary of Agriculture Mike Johanns were earning their paychecks.

Political baggage
Governments have a lot of political baggage to contend with when they come to the negotiating table. They can't simply say yes, we agree with that. They have people to consult, positions to take, limits they must stick to. They have more baggage than a Samsonite store.

I'm not defending the lack of will power that was demonstrated this week in Hong Kong. But it is a reality nonetheless.

No matter. The two sides will pick up the pieces and go on. There's another meeting set for Geneva in March.

Buy time
I've learned many things this week, but the most important may be this old adage: When you have no solution, buy time. In the United States, we're used to jumping on a problem and fixing it. In world trade talks that's a huge disadvantage. Take your time. Maybe the problem will just go away.

To some extent, agreements are entered into without ever solving the really tough issues. They are purposefully left vague so that the courts can decide on them later. Sometimes you simply have to let things be vague to avoid political gridlock.

Let's also admit that the WTO may never provide the answers we want - free and fair rules that allow efficient multilateral trade to flourish across the world. We won't be able to force the Europeans into doing anything they don't want to do. Even if you could move them off their current position of limiting access (with high tariffs) to their markets, those folks are the masters at non-tariff trade barriers - you know, inventing some kind of standard that you can't possibly meet so therefore don't even try to sell your goods there. Think: beef growth hormones, GMO food, and other "standards" hidden under the guise of consumer quality and safety demands.

They didn't have a very good week this time around, but they still hold the upper hand. Both the U.S. and the EU can only move forward if they move forward together. That's like tying two elephants' legs together and asking them to get moving.

The experience at Hong Kong was an eye-opener. Building a better world economic engine through trade sure has a shiny sound to it. But the reality is much darker. Of all the people I met this week, I could count the idealists on one hand. All the others fall into the following categories: pragmatic, realist, skeptical, cynical, and downright jaded.

It appears the more of these meetings you come to, the farther down that list you move.
Next week: reaction from farmers who came to Hong Kong
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