4 July 2010 - Moving forward on trade agreements

The old saying "it's slower than watching paint dry" certainly applies to agricultural trade negotiations. The difference, however, it takes much longer to make progress in trade talks than it takes for paint to dry.

Case in point...the current round of trade talks of the World Trade Organization labeled the Doha Round was launched in 2001 and it seems we are no closer to any kind of agreement now than when we started 9 years ago. The talks have been plagued with constant arguments among member countries accusing one another of not putting enough on the table and seeking too much in return for their own offers.

But finally, some encouraging news from President Obama who, at the G20 meeting in Toronto last month, told those member countries that the talks do not offer enough to the U.S. He said it will take "not a few modifications, but significant change" in the terms to win the support of U.S. negotiators. That prompted the Chinese ambassador to accuse the U.S. of asking for the Doha Round to be restarted with its demand.

On another, perhaps more important trade matter, President Obama met with the President of South Korea at the Toronto meeting and said he wanted to move forward to finalize the U.S. South Korea Free Trade Agreement by November. Here, too, we have been watching paint dry because the agreement was signed 3 years ago and has not been implemented because negotiators have been unable to finalize terms on two sticking points, opening the Korean market to more U.S. autos and more U.S. beef. This is an important agreement for us because South Korea is the world's 14th largest economy and at one time was a major market for U.S. cattle producers.

The President said "It is the right thing to do for our country. It is the right thing to do for the Koreans. It will strengthen our commercial ties." Democratic Senator Max Baucus, Montana said "It was great news for America's economy" and stressed the importance of removing trade barriers to American beef.

I think the great news in these two trade matters is the personal involvement of President Obama who, thus far, has not been very active in promoting trade. I commend him for these moves; I hope he remains active in the discussions and pushes Congress to move forward on other unresolved trade issues and maybe, perhaps, even finally bring an end to the trade embargo with Cuba.

My thoughts on Samuelson Sez.