It’s Time to Rethink Trade Talks

The Australian Financial Review

By John W.H. Denton,
Partner and Chief Executive Officer
Corrs Chambers Westgarth
Chairman, BCA Trade and International Relations Task Force

The Business Council of Australia has long advocated a comprehensive global trade agreement because it would generate clear and lasting benefits to all sectors and regions of the world economy, including developing nations.

As we pick over the bones of the failed Geneva meeting on the Doha Round, analysing the issues that caused negotiations to break down and seeking to pinpoint someone to blame, it can be easy to forget the reason 153 countries gathered together in the first place.

They were there because world trade matters.  It matters for governments, it matters for business, and most importantly, it matters for the citizens of WTO member countries for whom world trade brings cheaper goods, better wages and wider choices.  We should not let that reason go.

Well-constructed bilateral and regional trade deals can provide an important alternative.  We know that ultimately multilateral agreement will bring the greatest results.

But that certainly doesn’t mean we should proceed as before.

If nothing else this negotiating round has proven Einstein’s point: doing the same thing over and over and expecting a different result is the very definition of insanity.

Surely, the collapse of Doha suggests it is time to reassess the way in which we go about global trade negotiations.  For example, should we reconsider the number of issues that have been brought into negotiating rounds?  Industrial tariffs, agriculture and investment are all critically important, but perhaps we need to reconsider whether the all-in approach is really facilitating the progress we need.

And given the rapid increase in WTO membership in the past two decades, is it time to consider a greater role for regional sub-forums of the main organisation?  In its formative days, WTO negotiation took place between countries broadly similar in size and stage of economic development.  Those days are gone, but negotiations continue in largely the same vein.

And, critically, how can we enhance the contribution of business to the negotiating process?

Agreements are negotiated between governments, as they should be, yet the principles of free trade are based in part on a presumption that markets should be free, which in turn implies that the role of governments in markets should be minimised.

It is governments, not markets, that are swayed by protectionist leanings in difficult times.

The global business community must be prepared to take a leadership role in demonstrating the worth of the free-trade agenda and convincing governments to stay on track.

Successful businesses understand only too well the importance of learning from failure.  They understand that doing business in changed circumstances, with players of different sizes or cultural leanings, often requires new approaches to get the deal done.

It will be to the detriment of all if the member governments of the WTO don’t realise this also.