None too soon, President Barack Obama seems to have discovered that one of the best ways to create jobs and growth is through more world trade. To create the most jobs and the most growth through trade, he must also discover the World Trade Organization.
The President of the United States surprised everyone at the recently concluded summit of the leaders of the Group of 20 countries in Toronto by saying he wants to conclude the long-delayed free trade agreement between the United States and Korea.
By all means, we should conclude the proposed FTA with Korea. We should also conclude the proposed FTA's with Panama and Colombia. The sooner the better. Those bilateral deals will produce jobs and growth for Americans and for our trading partners.
But by far our best opportunity for creating jobs and growth through more trade is a global deal ― which is why the United States and others should be focusing much more on the long-stalled "Doha Development Round" of global trade negotiations among the 153 member countries of the WTO.
Global negotiations make possible global "trade-offs" leading to many more concessions in trade in many more goods and services by many more countries. Under WTO rules, any concession made to one country must be made to all. This can lower trade barriers of all kinds, and can maximize the potential gains from trade worldwide.
For these reasons, we can create many more jobs and much more growth from a global trade deal with a whole world full of countries than we can ever create from any bilateral trade deal with only one or a mere handful of countries.
Yet G-20 leaders seemed to give short shrift in Toronto to the WTO and to the need to conclude a global deal in the Doha Round. Reportedly, the stalemate in the global trade talks (now in their ninth year) came up behind closed doors. What was supposedly said behind those closed doors explains much about why, for all the potential gains from a global deal, the world has turned increasingly from multilateralism to bilateralism in trade.
One world leader reportedly described a Doha deal as "the cheapest form of stimulus." Obama replied candidly that there is not enough on the negotiating table in the current deal for the United States.
They are both right.
At a time when governments worldwide are retreating from public spending because of growing debt, and when businesses worldwide are refraining from private spending because of continuing uncertainty, the "cheapest" way to help sustain and strengthen the fragile recovery from the global economic crisis would be to lower tariffs and other barriers to international trade. Tariffs, for example, are taxes. A global trade deal would be a tax cut for the whole world that would generate jobs and growth.
But nine years of mind-numbing negotiations thus far in the Doha Round have simply not produced proposed concessions sufficient to secure the needed approval of a global trade deal from the Congress of the United States. And, despite their protestations otherwise, most likely this is true of other major trading countries as well.
Additional concessions are needed by all major trading countries to achieve an ambitious result from the global trade negotiations, and to further a faltering global recovery at a time when more of the right kind of stimulus is still much needed worldwide ― but is unlikely to come in many countries from more spending.
For the United States and the European Union, this could mean making more concessions on trade-distorting subsidies that protect inefficient agriculture. For China and other emerging economies, it could mean opening their markets much wider to the manufactured goods and services of the United States and other developed countries.
Doubtless doing this will be politically difficult everywhere ― not least in the Congress of the United States. But the potential payoff in new jobs and new growth is considerable.
By one estimate, an ambitious result from the Doha Round could yield potential annual gains in gross domestic product worldwide of more than $280 billion. Of this, about $36 billion annually would be by the United States, adding four-tenths of one percent to American GDP ― every year.
Back from Toronto, President Obama has renewed his pledge earlier this year to double US exports during the next five years. Among other initiatives, he says he will be "pushing hard" to conclude the Doha round in a way that will "translate directly into more opportunities for American exporters."
Is this merely the usual obligatory mention in passing of the global negotiations? Or has the President, having discovered trade, discovered also the potential benefits for American businesses and workers of additional trade agreements through the WTO?
James Bacchus is a former Member of Congress, and a former Chairman of the Appellate Body of the World Trade Organization. He chairs the global practice of the Greenberg Traurig law firm.