Friday, May 16, 2003

This WTO suit is so stupid I'm starting to wonder if the point is something entirely different from what it seems. First, the Financial Times [sub. req.] explains the stupidity:
First, the US could pay the political costs of launching an inflammatory dispute and then lose. Most press accounts compare this case with one of the first disputes ever handled by the WTO: the EU's ban on beef that had been produced using hormones. The EU lost because its ban had no basis in science and in "comparable" areas of food policy it had adopted much less strict rules -- a telltale sign that the ban was a protectionist gambit.

On the surface, the cases appear similar. Although the science on the health risks of GM food is contested, essentially all the credible evidence shows that these foods are safe, which would seem to indict the EU ban. But in critical ways the cases differ. Across the board, the EU is tightening food safety regulations in ways that seem irrational by standard cost/benefit tests but, crucially, are broadly non-discriminatory and consistent - the key tests for whether a trade ban is legitimate. Moreover, the GM ban is a temporary measure - unlike the permanent ban on beef hormones - and trade rules allow more flexibility for countries that implement temporary measures when they can claim the science is uncertain.

Second, the EU could change its rules in the middle of the dispute. For several years, EU bureaucrats have been designing a new set of standards that would "reopen" Europe's markets to GM foods if traders complied with onerous tracing and labelling requirements. This shift would make it harder for the US to win because trade laws are tolerant of labels that allow consumers to make the final choice. While the US might respond by dropping the suit, it would be more likely to redirect the dispute against the tracing and labelling rules. In the past, hotly contested trade disputes have usually taken on a myopic life of their own. Each side digs in and the political damage spreads.

Third is the most likely (and worst) outcome: the US could win. The victory would be Pyrrhic because the issues are fundamentally ones of morality and technology - they must be settled in the courts of consumer opinion. On this score, the beef hormones case is instructive. Even today, hormone-treated beef is no more able to find European consumers than it was before the US won its case; and the years of legal wrangling have led to counter-sanctions that have harmed a wide variety of unrelated products and industries. The antagonism over GM foods appears to be unfolding in much the same way.

Futhermore, they are fucking over the WTO itself:
Nonetheless, the prospect of being called on to adjudicate in such a politically sensitive conflict between the world's two economic superpowers is sending shivers through the WTO. The organisation is already under fire because of past decisions in trade disputes that critics, including members of the US Congress and activist groups, say trample on national sovereignty.

Trade officials fear that trying to lay down the law - in an area where global rules are far from clear - would expose the organisation to still fiercer attacks that could undermine its authority. "Whichever way a case on GMOs went, the WTO would lose," says one. Despite those risks, Mr Bush's administration has decided to press ahead. It has threatened since October to bring a WTO case; but the White House blocked action in January, fearing it would complicate efforts to win European support for the war in Iraq.

[Also, supposedly, FT -- I could only find it here]. This at a time when the current (Doha) round of negotiations is stalled -- the House Ag Comittee is holding a hearing on this next week -- and a number of countries are preparing another WTO challenge to the monstrous US farm bill.

Could it be that they actually want to destroy the WTO? And replace it with their new mercantilist bilateral strategy? You might think so, but US industry seems to need someone to whine to: just now they are complaining that banning the import of exotic Newcastle-infected poultry somehow constitutes an "unfair" restraint of trade (as opposed to, say, steel tariffs and corporate tax breaks). And yesterday an organization called the National Foreign Trade Council released a report claiming that virtually any safety or quality standard is restraint of trade. See, the playing field is just not "level" enough for US corporations to compete fair and square. But, considering how crazy these neocons are, maybe the theory is that they won't need to whine once we impose our inferior disease-ridden products on the world by force. This prominent quotation on the NFTC's homepage says it all:

"From the point of view of Halliburton, one of the most valuable organizations we are a part of is the NFTC."

-- Richard Cheney

(After, of course, the US Government).

[more on the bilateral agreements here and here; open democracy link thanks to skimble; modified/elaborated substantially on 5/16]

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