Neoliberalism vs. Free Trade

Recently, I quoted Dwayne Andreas' (former CEO of Archer Daniels Midland) statement that "the customer is the enemy." According to Jesse Walker, the feeling is mutual: "The enemy isn't India--it's Archer Daniels Midland." That's from an article on the collapse of the Doha round at Reason. Here's more:

It has been less than a decade since demonstrators clogged the streets of Seattle, locking arms, blocking traffic, and accusing the U.S. of shoving free trade down the Third World's throat. But as the latest round of trade talks collapses in Geneva, it's clear that the U.S. government is, in fact, one of the greatest institutional barriers to free trade. Asked to choose between freedom and the farm lobby, Washington will opt for agribusiness almost every time.

Savvy observers already know to check the fine print when politicians talk about "deregulation." Usually the rules are being revised, not removed--some stricken, some strengthened--with the details determined by what will benefit the industries with the most pull in Congress. This is just as true when the regulations in question involve international trade....

* With the Uruguay Round of 1986 to 1994, so called because it was launched in Punta del Este, Uruguay, Washington changed its tune: Price supports were now up for debate. This was partly because of shifts in the international market that made recipricocal agreements more appealing to many American growers, but it was also a political trade-off. In exchange for putting its subsidies on the table, the U.S. asked developing countries to accept rules that favored other American industries. Notably, new intellectual property requirements made trade significantly less free, by imposing Washington's much more restrictive copyright and patent rules on poorer countries. As the economists Jagdish Bhagwati and Arvind Panagariya noted in the Financial Times a few years back, the result was "the capture, reshaping and distortion of the WTO in the image of American lobbying interests."

The same virus infects our other trade pacts. The Central American Free Trade Agreement, for example, required member nations to match our extended copyright terms, allow patents on software, and imitate the Digital Millennium Copyright Act by banning technologies that circumvent copy protection.

* Meanwhile, the agriculture rules adopted in the Uruguay Round were still riddled with loopholes. States have been able, for example, to conceal export subsidies in other programs, such as food aid. And while countries were asked to cut farm tariffs, they were allowed to average those cuts across all their crops, preserving protections for politically powerful producers as they allowed more competition in other areas.

Now the Doha Round has collapsed without an agriculture agreement. The U.S. refused to cut subsidies unless the Europeans agreed to deeper cuts in tariffs, while the Europeans refused to cut tariffs unless the U.S. agreed to deeper cuts in subsidies. Neither had a strong incentive to reach a consensus, because the biggest beneficiary would be the developing world....