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Zachary Karabell Headshot

Hong Kong, Doha, and the WTO - Huh?

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In the continued interest of counter-programming, let's turn our attention away, for a moment, from the fascinating saga unfolding in Washington. And it is fascinating -- and disturbing -- no doubt. But a world away, another saga is unfolding, one which, like the rise of China as an economic behemoth, is shaping everyday life in more prosaic, but probably more significant, ways than anything that George Bush does or does not do with the latest golly-gee technologies of the NSA.

This week, the World Trade Organization convened the latest round of ministerial talks in Hong Kong. The last few meetings of this so-called "Doha Round" of negotiations ended in the chaos of the Seattle riots in 1999, and the collapse of the Cancun talks in 2003. Another failed round might have upset the entire apple-cart of the trade liberalization process that the WTO stands for. OK. I recognize that on the left, the entire WTO process is greeted with strong suspicion about the preeminence of multinational corporations at the expense of the workers everywhere. But the story of free trade, beginning in the 19th century, is also one of increased access to markets and decreased cost of finished goods and raw materials. This hasn't and doesn't unfold in a linear fashion, but the upside of the downside of the Walmart phenomenon is less expensive products, and that is a direct result of lowered trade barriers.

At this round of talks, the United States was, for a brief moment, not the villain du jour. The US Trade Representative, Bob Portman, actually won plaudits for a degree of humility and candor which must have caught the delegates by surprise. The drama, instead, was produced by South Korean rice farmers suspicious of what would happen to the protective subsidies that keep them gainfully employed and the hypocrisy of the European Union in demanding lowered subsidies for the developing world while refusing to lower their subsidies for European farmers.

Before you hit the snooze button, consider for a moment how much France, Germany, Japan, and other countries use agricultural subsidies to cushion themselves against global trade and keep their markets from being flooded by lower cost agricultural goods. The United States also protects its farmers, but the European Union plays the anti-U.S. card in order to deflect criticism from its equally egregious policies. The fact is that the developed world, and its leading nations such as Brazil, are becoming agricultural powerhouses and pose a competitive threat, and the EU isn't prepared to meet that challenge.

The agreements struck in Hong Kong this week will lead to a gradual lowering of these subsidies between now and 2013. That should give the EU enough time to make necessary adjustments and give the developed world the ability to penetrate hitherto closed markets. For those on the left who have decried the imbalances between the northern hemisphere and the souther tier, or between the developed world and the developing world, these are positive steps. But it's hard to not to sense that just as the developed world is unprepared for the emergence of China, we're unprepared for cheap food whose global movement we can't control. Farmers, and agribusiness, in the United States and Europe, as well as Japan, have been insulated from these shocks, while manufacturing has not. There are only 2 million farmers left in the United States, and 14 million factory workers, out of a labor force of nearly 130 million. But these developments will shake the heartland all the same.

A decade from now, the saga of the Bush administration will be over, but the issues simmering with each new advance of the WTO will be with us, shaping our lives, in ways we still refuse to acknowledge.