Trade for Development: All Talk and No Action in the New Development Strategy?

While Connie Veillette pointed to many promising elements in President Obama’s speech to the UN MDG Summit and in the new presidential directive on development (PDD), trade remains one of the, mostly, missing elements.  President Obama said that the new strategy would “harness all the tools at our disposal -- from our diplomacy to our trade policies to our investment policies,” but when it came to specifics, it was mainly the actions of others that were highlighted:

“We’ll work to break down barriers to regional trade and urge nations to open their markets to developing countries.  We will keep pushing for a Doha Round that is ambitious and balanced --one that works not just for major emerging economies, but for all economies.”

The call to complete the Doha Round is good, but the key criticism of the U.S. position in the Doha Round is that the Obama administration came into office demanding more of others without putting any new U.S. offers on the table, for example to further reduce trade-distorting farm subsidies. The new PPD has even less on trade and even the USAID report laying out a strategy for meeting the MDGs is incomplete at best when it comes to trade. It reiterates the importance of completing the Doha Round, but in terms of the MDG commitment (under goal number eight) to provide duty-free, quota-free market access for all least-developed countries (LDCs), the report and the President are mostly silent. The USAID report refers only to the African Growth and Opportunity Act, ignoring Haiti, which has its own program (less generous than AGOA) and 15 Asian LDCs that, in practice, receive little, if any, preferential access to the U.S. market.Despite the fact that LDCs as a group account for only 0.5 percent of U.S. non-oil imports, the United States is falling further and further behind other countries, including some emerging markets, in meeting the DFQF goal. While Congress is the one that has to pass legislation to implement DFQF, the unwillingness of the President, USAID administrator Raj Shah, Secretary of State Hillary Clinton, or U.S. Trade Representative Ron Kirk to take the lead in pushing for action remains deeply disappointing.