US Targets India, Brazil for Doha, China Sidelined

Opening up the markets of Brazil, India and other emerging economies through an agreement in the Doha Round of WTO negotiations would play a crucial part in meeting Washington’s goal of doubling US exports by 2014, the White House said last Wednesday in its annual economic report.

The report - not to be confused with the US trade representative’s trade agenda for 2011, was released by the president’s Council of Economic Advisors a day after WTO Director-General Pascal Lamy cautioned government delegates in Geneva that “a major acceleration” in the Doha negotiations was necessary to conclude the nine-year-long talks by year’s end. Analysts note that a failure to finalise an accord by then would result in deadlock at least until after the next US presidential elections in November 2012.

“The share of total US exports sent to mature trading partners has been declining for decades,” the report noted, while most future export growth is expected to come from emerging economies.  For instance, in 2000, a year before China joined the WTO, only 2 percent of US exports were destined for the Chinese market. By 2009, China was the destination of 6.6 percent of US exports, and the fast-growing Asian giant had become America’s fourth largest trading partner behind the EU, Canada and Mexico.

In contrast to China, the report said, US exports to Brazil, India, and other emerging markets have “leveled off” since those countries’ initial liberalisation programmes in the mid-1990s.  Unlike China, Brazil and India were founding members of the WTO, and did not need to undertake far-reaching market-opening commitments in order to join the global trade body.

The White House report calls for further trade liberalisation commitments from these emerging economies through the Doha Round “not only to enhance opportunities for US exporters…but also to increase opportunities for development-enhancing trade among developing countries.”

The report notes that major developing countries like Brazil, India, and China have significantly cut import tariffs over the past 20 years, but remain high compared to US levels. Brazil’s implied import tariff is 13.6 percent, India’s is 13, and China’s is 9.6 compared to the US’s 3.5 percent.

The report also cites a World Bank measure for evaluating a country’s overall trade restrictiveness, with a higher number meaning more trade restrictions.  On this index, Brazil’s score is 20.3, India’s is 18, and China’s is 9.8 while the US has a score of 6.3, the EU 6.4, and Japan 11.3.

The prospect of increasing US exports to these countries and meeting its export goals for 2014 depends in part on how much further they are willing to cut import tariffs, the report said.  In addition to the Doha negotiations, the US is in talks on a Trans-Pacific Partnership trade agreement with a number of Pacific Rim nations (some of which already have trade agreements with the US). The US has signed, but not yet ratified, FTAs with Korea, Colombia, and Panama.