Monday, July 24

WTO's mad tea party

I am not sure why I found the following report hysterically funny. Maybe it's because there has been so much fighting at the WTO meetings about subsidy reductions. I mean, if nobody ever knew how much subsidizing was going on, how did they ever imagine they'd work out equitable deals?

Or maybe it struck my funnybone because Lamy sounds so earnest when he observes that one can't forge deals in the absence of information. But dagnabbit they somehow managed to wrangle for years in the absence of reliable data.

The whole thing reminds me of the tea party in Wonderland.

Humans. God might not like us but He'll never forget us.
Bloomberg News via International Herald Tribune
WTO sees discrepancies in subsidy data
Published: July 24, 2006

(GENEVA) The World Trade Organization said Monday that it had little reliable data on how much money governments spend subsidizing farmers and industries like steel, mining or banking, complicating efforts to simplify trade.

Under WTO rules, governments must submit details of their subsidy spending each year. In practice, though, fewer than half of the Geneva-based organization's 149 members do so, and even then, there are discrepancies with national spending.

There is "an extraordinary paucity of reliable and systematic information on subsidies," Pascal Lamy, the director general of the WTO, said in a 223-page report.

"It is simply impossible to make good policy or to forge mutually beneficial international cooperation in the absence of information."

The most recent available data at the WTO show that the United States spent on average $16.3 billion annually in aid from 1998-2002. That is less than half of the $41.5 billion reported in national accounts for the four-year period, the WTO said.
Japan, for the same period, reported $4.2 billion to the WTO of a total $34.3 billion actually spent on aid, according to the report, while the European Union reported $96.3 billion of $109 billion.

Still, the WTO's subsidy data do show that the world's 21 most industrialized nations account for $250 billion of the $300 billion spent annually in 69 countries on subsidizing their industries. That amounts to 1.4 percent of developed economies' gross domestic product and 0.6 percent for emerging nations.

Patrick Low, director of economic research at the WTO, said that while it was clear that subsidies to farmers were falling, the same could not be said of mining, coal, forestry, shipbuilding and carmaking industries where government support was "most pervasive."

On subsidies to services like banking or tourism, "we know almost nothing," he said.

"The data is very incomplete," Low added.

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