Fighting terror with trade
DEEP IN THE SHADOW of the military developments of the last couple of weeks, an important agreement was reached in Doha, Qatar, to launch a new round of global trade negotiations. Thease talks, which really should be called the "World Trade Center Round", could be ultimately as valuable in the war on terror as advances in Afghanistan. The new effort to strengthen the trading system is both a product of Sept. 11 and a solution to the tensions behind it. Vibrant world trade can bridge the economic divide that drives resentment of the West. And the Doha agreement, reached against high odds, testifies to a new sense of global cooperation that is emerging in the wake of the tragedy. Of course, present and future bin Ladens will not be assuaged by more, or even fairer, world trade. But the people who make it possible for them to thrive - those who "hate us" - are the product of systems that deliver neither economic nor social progress, in large part because they are on the fringes of the modern global economy. There are now 142 countries in the WTO, but few in the Middle East are members. Much of the region remains outside world trade rules - including Afghanistan, Iran, Iraq, Lebanon, Libya, Saudi Arabia, Sudan, Syria and Yemen. As long as they remain isolated, their economies are destined to lag behind Asian and other competitors. The world trading system needs to be so attractive, so fair, and so inclusive, that no government can afford to stay out. The WTO is now taking major steps in this direction by drafting an agenda that addresses developing countries, and by growing its membership, with such countries as China, Jordan, Oman and Taiwan joining in the last year. Up to the last minute of the Doha meeting, many believed that the outcome would be negative. Agreement required consensus among 142 diverse members - an immense challenge that led to the collapse of the talks in Seattle two years ago. But as the deadline neared, a sense of purpose took over, and country after country abandoned previously hard positions to reach for compromise. Developing countries scored important victories. The negotiations will address the end of agricultural subsidies (conceded by Europe) and the relaxation of drug patents and anti-dumping procedures (once "nonstarters" for the United States). They will have opportunities to discuss the accelerated opening of textile markets, and managed to keep labor standards off the agenda. There is plenty in the agenda also for developed countries. Europe has been looking for progress on linking environment with trade, and for reviewing U.S. dumping practices. It has also wanted to discuss merger policies, which may now happen at a second stage. And while the United States gave a lot, it also got a lot ? discussions of the elimination of agricultural and other subsidies, opening markets for services including finance and communications, and talks to keep electronic commerce free of regulation. But Doha is just a starting point. It produced an agenda and a launch - the hard negotiations are ahead. Indeed, judging by how difficult it was to get this far, the 2005 deadline for completing the talks seems optimistic. So this week the ball is back in the America's court: We need to make it possible for the President to negotiate and to lead the round. This means passing "trade promotion authority" (TPA) - legislation that commits Congress to either approving or disapproving the eventual agreement, without changing it item by item. President Clinton had such authority when he negotiated NAFTA and the Uruguay Round, but Congress failed to extend it in 1994. There was strong democratic opposition then, as there is likely to be now. The Bush administration still needs to invest hefty political capital in the battle for TPA, but passage should be possible in the post-Sept. 11 era. As political and economic threats abound, the world is ready to cooperate. Congress can respond in kind by making it clear that we intend to extend the benefits of the global economic system to people everywhere, in partnership with other countries. World trade rounds eventually acquire names - and I hope this one will be called the World Trade Center Round. By attacking the symbols of world trade, the terrorists meant to stop global economic integration, but in fact helped to build the resolve for reinvigorating it in Doha. Peter A. Petri, Dean and Carl J. Shapiro Professor of International Finance in the Graduate School of International Economics and Finance at Brandeis University, has published widely on international trade and investment.