Completing the Doha Round: The U.S. Political Realities

1
Completing the Doha Round The U.S. Political
Realities

• James P. Durling
• Willkie Farr Gallagher
• Asia WTO Research Network
• Taipei Conference
• April 24, 2006

2
Introduction

• Can we complete the Doha Round?
• Important shifts in U.S. political realities.
• Are the headlines correct?
• Review where we stand in 2006.
• Contrast 2006 with 1993, in the final stages of
  the Uruguay Round.

3
The President

• Clinton 1993
• First term, with strong party backing
• Focus on economics from beginning
• Viewed trade as one of his key issues as a new
  democrat
• Engaged in issues

• Bush 2006
• Second term, with declining party support
• Focus on security since 9/11 attacks
• Realizes his entire legacy will be the Iraq War
• Delegates most issues

4
Presidential Power

• Clinton 1993
• Trade and economic issues a priority
• Approval ratings in the 40-50 range
• Able to pressure Democrats
• Aligned with Republicans on trade
• Less partisan environment

• Bush 2006
• Trade secondary to security issues
• Approval ratings in the 30-40 range
• No credibility with Democrats
• Weaker Republican support for trade
• Extremely partisan environment

5
The USTR

• Kantor 1993
• Key political advisor, no trade experience
• USTR from beginning
• Signal of commitment to trade issues
• Reputation for closing deals

• Schwab 2006
• Trade technocrat with limited ties to Bush
• Brand new in job
• Portman to OBM signals lower priority
• Less political experience

6
The Congress

• 1993 Reality
• Not an election year
• Democratic control of both houses
• House D 258, R 176
• Senate D 57, R 43
• D did not anticipate 1994 dramatic shift

• 2006 Reality
• Election year
• Republican control of both houses
• House R 232, D 202
• Senate R 55, D 45
• R fear loss of control due to Bush problems

7
The U.S. Political Scene

• 1993 Reality
• Stronger President, focused on trade
• Confident Democrats
• Non-election year
• Less attention on GATT, implications
• Fast track simply assumed1993 extension passed
  House 295-126

• 2006 Reality
• Weakened President, focused elsewhere
• Nervous Republicans
• Election year
• Growing attention on WTO
• Fast track at risk lapsed 1994, 2002 passed
  House 215-212

8
The Status of the Round

• The 1993 Draft
• Dunkel had prepared complete draft in December
  2001.
• Set a clear context for the remaining issues.
• Dunkel took the criticism, Sutherland closed the
  deal.

• The 2006 Draft
• No such draft yet Lamy contemplating such a
  step.
• Still very new in job, less experience than
  Dunkel.
• Lamy has to close the deal.

9
The Challenges to be Met

• 1993 Realities
• Issues had been narrowed
• Bringing areas within WTO disciplines
• Developing countries less engaged

• 2006 Realities
• Many issues still open with diverging interests
• Tightening those disciplines
• Developing countries more engaged

10
Differing Political Imperatives

• 1993 Realities
• Sense of momentum, need to finish
• FTAs less prevalent
• US focus on multilateralism
• Clinton priority
• Always had fast track authority

• 2006 Realities
• Less momentum, legacy of Seattle
• FTAs expanding
• US dual track approach
• Not a Bush priority
• Fast track is running out of time

11
Conclusions

• Weaker, less focused president just replaced
  USTR at critical stage
• More partisan Congress focused on WTO in an
  election year
• More ground to cover, in more challenging
  international environment
• Little momentum notwithstanding impending fast
  track deadline.
• The headlines are correct, but actually
  understate the challenges in 2006