Doha's collapse will cut energy use the hard way

Bob Tippee
Editor

Adherents of the minimalist approach to energy consumption have much to cheer in the collapse July 29 of the Doha Round of trade negotiations.

After all, anything that suppresses economic activity also crimps the use of energy and whatever environmental consequences come with it. To the minimalist camp, every reduction in the use of energy, especially hydrocarbon energy, advances humanity.

Failure of the Doha Round negotiations, over a special safeguard mechanism in farm products for developing countries, will suppress economic activity.

That doesn't have to mean disaster. During most of the nearly 7 years since the Doha Round began, trade has flourished, and the global economy has mostly expanded.

A world trade agreement is neither essential to trade nor the only type of agreement possible. Doha's collapse doesn't preclude new regional or bilateral deals.

Furthermore, as World Trade Organization officials were quick to assert, the latest stalemate doesn't mean the round is finished.

The outlook, though, isn't cheery. If anything, protectionism, especially involving farm products, is hardening.

China and India, with growing populations beginning to reap the fruits of industrialization, have received blame for holding fast to their farm subsidies. But Europe and the US were hardly magnanimous in this area.

In the US, in fact, Congress seems to have turned hostile toward trade in general and farm trade in particular. Earlier this year, it overrode a veto of a farm bill loaded with subsidies and blocked a trade agreement with Colombia using a rules change that has hurt US creditability on trade issues.

While a stalled Doha Round need not be disastrous for the global economy, it surely won't help.

Trade benefits economies and fosters development. An agreement lowering barriers would boost trade and thus stimulate economies.

So even if the world's economic system stays healthy without a successful and fair outcome from the Doha Round and despite high energy prices and other troubles, it's reasonable to think it would have become healthier with one.

That's one a way to conserve energy. But it's a tough way. Ask anyone who's chronically hungry.

(Online Aug. 1, 2008; author's e-mail: bobt@ogjonline.com)

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