Completing the Doha Round: The U.S. Political Realities

1. Completing the Doha Round: The U.S. Political Realities James P. Durling Willkie Farr & Gallagher Asia WTO Research Network Taipei Conference April 24, 2006 Willkie Farr & Gallagher

2. Introduction • Can we complete the Doha Round? • Important shifts in U.S. political realities. • Are the headlines correct? • Review where we stand in 2006. • Contrast 2006 with 1993, in the final stages of the Uruguay Round. Willkie Farr & Gallagher

3. Clinton: 1993 First term, with strong party backing Focus on economics from beginning Viewed trade as one of his key issues as a “new democrat” Engaged in issues Bush: 2006 Second term, with declining party support Focus on security since 9/11 attacks Realizes his entire legacy will be the Iraq War Delegates most issues The President Willkie Farr & Gallagher

4. Clinton: 1993 Trade and economic issues a priority Approval ratings in the 40-50% range Able to pressure Democrats Aligned with Republicans on trade Less partisan environment Bush: 2006 Trade secondary to security issues Approval ratings in the 30-40% range No credibility with Democrats Weaker Republican support for trade Extremely partisan environment Presidential Power Willkie Farr & Gallagher

5. Kantor: 1993 Key political advisor, no trade experience USTR from beginning Signal of commitment to trade issues Reputation for closing deals Schwab: 2006 Trade technocrat with limited ties to Bush Brand new in job Portman to OBM signals lower priority Less political experience The USTR Willkie Farr & Gallagher

6. 1993 Reality Not an election year Democratic control of both houses House: D 258, R 176 Senate: D 57, R 43 D did not anticipate 1994 dramatic shift 2006 Reality Election year Republican control of both houses House: R 232, D 202 Senate: R 55, D 45 R fear loss of control due to Bush problems The Congress Willkie Farr & Gallagher

7. 1993 Reality Stronger President, focused on trade Confident Democrats Non-election year Less attention on GATT, implications Fast track simply assumed;1993 extension passed House 295-126 2006 Reality Weakened President, focused elsewhere Nervous Republicans Election year Growing attention on WTO Fast track at risk; lapsed 1994, 2002 passed House 215-212 The U.S. Political Scene Willkie Farr & Gallagher

8. The 1993 “Draft” Dunkel had prepared complete draft in December 2001. Set a clear context for the remaining issues. Dunkel took the criticism, Sutherland closed the deal. The 2006 “Draft” No such draft yet; Lamy contemplating such a step. Still very new in job, less experience than Dunkel. Lamy has to close the deal. The Status of the Round Willkie Farr & Gallagher

9. 1993 Realities Issues had been narrowed Bringing areas within WTO disciplines Developing countries less engaged 2006 Realities Many issues still open with diverging interests Tightening those disciplines Developing countries more engaged The Challenges to be Met Willkie Farr & Gallagher

10. 1993 Realities Sense of momentum, need to finish FTAs less prevalent US focus on multilateralism Clinton priority Always had fast track authority 2006 Realities Less momentum, legacy of Seattle FTAs expanding US dual track approach Not a Bush priority Fast track is running out of time Differing Political Imperatives Willkie Farr & Gallagher

11. Conclusions • Weaker, less focused president; just replaced USTR at critical stage • More partisan Congress focused on WTO in an election year • More ground to cover, in more challenging international environment • Little momentum notwithstanding impending “fast track” deadline. • The headlines are correct, but actually understate the challenges in 2006 Willkie Farr & Gallagher