A MODEST PROPOSAL FROM PASCAL LAMY?

The FT reports that the European Trade Commissioner is studying ways to allow governments to ban imports from countries that do not agree with their national values and/or standards, what he dubs a national "collective preference."

Without knowing the details, it is clear prima facie that such a proposal runs counter to WTO rules, which allow for import restrictions only specific instances and based on a preponderance of scientific evidence (a burden of proof that has been hard to acheive in the WTO dispute settlement mechanism).

It's hard to see this as anything but a retrenchment of European interest in a multilateral trading system, no doubt over issues of Europes agricultural policies and its citizens' preferences for non-GMO food. And it is certainly a BIG monkey wrench in the works of the current round of WTO negotiations. Watch for the trade punditocracy to converge on Pascal Lamy, villifying him for squashing the development hopes of the world's poor by denying them a new trade agreement.

The pro-poor, pro-development discourse that has emerged around the Doha round of negotiations is an interesting development in trade politics in the West, and makes a compelling argument for most compassionate swing voters who are confused and unsure about what globalization actually means. Unfortunately, the pro-poor line of argument is really, really bunk, as I've argued elsewhere.

It should be noted that resistance to the current WTO negotiating agenda actually originates in the developing countries. Why? Because the advanced countries, and the U.S. in particular, want to force them to relinquish all the policy tools of economic sovereignty, to adopt stricter than Western style intellectual property rights, to spend millions overhauling customs systems to suit Western preferences, and to grant special rights and privileges for foreign investors--all in exchange for a few crumbs of tariff reductions and faster phase-in schedules. Even the most rose-tinted evaluations show developing countries actually losing income from these policy proposals.

The agriculture subsidies issue, while important, is particularly misguided in the discourse. Subsidies are both symptom and disease in a American-European agriculture policy that impoverishes the world's farmers. It's a complicated but compelling argument, and anyone who wants to know more than the average neoclassical economist about agriculture trade policy should check out this report from Daryll Ray at the University of Tennessee.