Friday, November 04, 2005

Facing Hong Kong and Tunis

Two days of intense discussions in Washington reinforces the impression that the contacts over the Atlantic are much better now than, say, a year ago. The poisonous athmosphere immediately after the Iraq war has been replaced with a far more cooperative approach on most issues.

It was a deliberate decision by the second Bush administration to improve the links. The February visit by the President to Brussels was the key event that turned things around, and there was of course also an eagerness on the European side to move on. We both need the partnership.

But this does not meant that there aren't issues where there is a certain amount of friction.

The issue of what will happen with the EU arms embargoe with China is still hanging out there even if it is not as acute as it was a year ago. There is the beginning of a more strategic dialogue on all the different aspects of the peaceful rise of China.

The two issues in focus at the moment are related to Hong Kong and Tunis - to the upcoming World Trade Organisation ministerial and to the World Summit on Information Society. In the first case the friction is mostly about agricultural policy issues and in the second about Internet governance.

There is no missing the importance that is attached to the later issues. A meeting with one of the true top decisionmakers in town opened immediatly with him asking what the EU is really up to. And in Congress there was as broad support as you can get for the position that the US has taken on the issue.

It is important that this issue is defused as fast as possible. The Tunis meeting is likely to split over the issue anyhow, but it is important how it splits, since that will have a determining effect on what happens thereafter. And it would be very bad if there is a profound split over the Atlantic.

The tragic thing is that much of the EU position - as explained by Commissioner Reding - is based on rather fundamental misunderstandings of how the Internet and ICANN system really works. It's embarrasing to have to admit in discussions in Washington, but it is unfortunately a fact.

On the question of agricultural subsidies the clash of interests is more substantial. It's as complicated to get political acceptance for the rapid reduction of different agricultural support schemes in the European Union as it is in the United States. Both have presented packages of cutbacks that are fairly substantial, but most want the European Union to go farther and faster.

Here the clock is now ticking very fast and one can only hope that the utmost will be done to bridge the differences. If that is done, then the task will be to press all the other - de facto more important - issues that are on the agenda in Hong Kong. But without progress on agriculture there is scant hope of progress when it comes to market access for other products.

When ministers from the 148 countries of the WTO meet in Hong Kong, no one wants to repeat the failure of their last meeting in Cancun in September 2003, not to speak of the earlier utter disaster of Seattle.

If there is failure it is more than likely that we will see a rapid rise in protectionist sentiments in the US as well as in Europe, with different countries starting to go the bilateral rather than the multilateral trade liberalisation route and the chance for a real breakthrough for global trade and development missed for years t come.

This would be a true tragedy. Since the so called Uruguay round of trade liberalisation talks was completefd in 1993 the world economy has been transformed. Partly as a result of Uruguay we have seen not only the rapid rise of China and India, but also the emergence of strong trading nations like Brazil.

But the Clinton administration failed miserable in Seattle to give the further liberalisation new momentum. Now it might well be descrtibed as a test more important than Iraq whether the Bush 43 administration and the present leadership of the European Union can secure the further progress of globalisation by carrying the Doha round to a succesful conclusion.

The mood between Washington and Brussels is undoubtedly much better. But failure and fissure in Hong Kong and Tunis can quickly change the scene again.

We do need a more open global trading system, and we do need a stable and reliable Internet.

We should simply not be allowed to mess up so important issues for us all.