The U.S. hedges its bets on the Doha round
Until 2006, the Bush administration’s policy of “competitive liberalization” in trade had been pretty much symbolic. FTA’s with Bahrain, Morocco, or even the CAFTA countries were economically insignificant. Neither the EU nor India was going to feel compelled to move on Doha because of CAFTA. This year, however, there have been annoucements to negotiate FTAs ...
Until 2006, the Bush administration's policy of "competitive liberalization" in trade had been pretty much symbolic. FTA's with Bahrain, Morocco, or even the CAFTA countries were economically insignificant. Neither the EU nor India was going to feel compelled to move on Doha because of CAFTA. This year, however, there have been annoucements to negotiate FTAs with Malaysia and South Korea. Competitive liberalization has a bit more teeth to it. Alan Beattie points this out in the Financial Times: It?s always wise to have a Plan B. As the US urges progress in the ?Doha round? of trade talks, it is also chasing bilateral trade deals across east Asia. These proposed pacts, which include South Korea, Malaysia and Thailand, will act as insurance for a disappointing round. They also put down a marker for future US influence in the region. The US has for several years pursued a policy of ?competitive liberalisation?, pursuing both multilateral and bilateral liberalisation. This irks many trade experts who say bilateral deals do more to divert and complicate trade than advance it. But the US strategy is clear. William Rhodes, senior vice-chairman of Citigroup and chairman of the US-Korea business council, says: ?Because the Doha round has been moving so slowly...there will be more of these bilateral FTAs like that being negotiated between the US and Korea.? The bilateral talks have a sense of urgency. The US?s ?trade promotion authority? ? the White House?s right to submit entire trade agreements to Congress for a Yes-No vote ? expires in the middle of 2007. While the expiration of this authority sets a hard deadline for Doha, it will also close the window for the US to sign bilaterals. Karan Bhatia, deputy US trade representative with responsibility for Asia, says: ?TPA is concentrating our focus on making sure we lock down agreements that we believe can and should be achieved before that deadline. We are pushing forward aggressively with Korea and Malaysia to try to close those before the time expires.? The $64 billion dollar question is whether these propoed FTAs will convince the EU to relent on ag subsidies and India and Brazil to relent on non-agricultural market access. At a minimum, the European Commission is making noises about more FTAs in Asia. Developing.... at least until TPA expires.
Until 2006, the Bush administration’s policy of “competitive liberalization” in trade had been pretty much symbolic. FTA’s with Bahrain, Morocco, or even the CAFTA countries were economically insignificant. Neither the EU nor India was going to feel compelled to move on Doha because of CAFTA. This year, however, there have been annoucements to negotiate FTAs with Malaysia and South Korea. Competitive liberalization has a bit more teeth to it. Alan Beattie points this out in the Financial Times:
It?s always wise to have a Plan B. As the US urges progress in the ?Doha round? of trade talks, it is also chasing bilateral trade deals across east Asia. These proposed pacts, which include South Korea, Malaysia and Thailand, will act as insurance for a disappointing round. They also put down a marker for future US influence in the region. The US has for several years pursued a policy of ?competitive liberalisation?, pursuing both multilateral and bilateral liberalisation. This irks many trade experts who say bilateral deals do more to divert and complicate trade than advance it. But the US strategy is clear. William Rhodes, senior vice-chairman of Citigroup and chairman of the US-Korea business council, says: ?Because the Doha round has been moving so slowly…there will be more of these bilateral FTAs like that being negotiated between the US and Korea.? The bilateral talks have a sense of urgency. The US?s ?trade promotion authority? ? the White House?s right to submit entire trade agreements to Congress for a Yes-No vote ? expires in the middle of 2007. While the expiration of this authority sets a hard deadline for Doha, it will also close the window for the US to sign bilaterals. Karan Bhatia, deputy US trade representative with responsibility for Asia, says: ?TPA is concentrating our focus on making sure we lock down agreements that we believe can and should be achieved before that deadline. We are pushing forward aggressively with Korea and Malaysia to try to close those before the time expires.?
The $64 billion dollar question is whether these propoed FTAs will convince the EU to relent on ag subsidies and India and Brazil to relent on non-agricultural market access. At a minimum, the European Commission is making noises about more FTAs in Asia. Developing…. at least until TPA expires.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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