Status Report: Geneva
Last week, near the shores of Lake Geneva, three major trading nations flatly rejected a proposal by the European Union to jump-start stalled talks to reduce or eliminate customs duties on most international trade in electrical and electronic equipment. Essentially, the three refused flatly to reduce their tariffs on imported products in ways that would grant new market access in return for the U.S., EU, Japan, and Australia eliminating their tariffs on the same categories of goods. "Who are these countries?," you might ask. Three-quarters of the celebrated BRICs: Brazil, India and China.
You could be forgiven for having forgotten that there are global trade talks underway aimed at removing tariff and non-tariff barriers to trade in industrial goods, services, and agricultural products. Since their launch in late 2001, little real progress has been made under the banner of the Doha Development Agenda negotiating round of the World Trade Organization (WTO).
For much of almost-decade, the U.S., Japan and others have advocated for an agreement that would deliver zero or near-zero tariffs for many electrical and electronic products. For its part, NEMA has advocated long and hard for the list of products and participants to be as large as possible and include all major trading countries. More recently, the European Union joined the effort to strike a deal on a so-called "sectoral agreement" in this area, along with similar deals for trade in chemicals and industrial machinery. Initially, the EU proposal inspired hope that some real give-and-take could take place across the table at least. But Brasilia, Delhi and Beijing are apparently quite happy with their high tariff levels, thank you, and will not admit to seeing any advantage to allowing more competition in their markets. Nevertheless, NEMA and the U.S. government will continue to press for new market access.
In the meantime, Russia (the "R" in BRIC) is continuing to negotiate the terms of its accession to the WTO rules-based trading system, a negotiation that has been complicated not only by the Russian bureaucracy but also the country's 2010 customs-union with Belarus and Kazakhstan. Once Russia joins the WTO, which could happen as soon as late this year, Moscow will have to reduce its tariff levels on imports from the U.S. and elsewhere. Aye, but there is a rub: In order for the U.S. to be able to take advantage of the deal, Congress and the President must approve legislation removing Russia from the "Jackson-Vanik" list of countries and thereby grant permanent "most-favored nation" status to Moscow, which will bring them up to the level of all other WTO members. That Capitol Hill debate is expected this autumn.
05-16-2011 11:20 AM