I don’t think I’ve used the word “Doha” (as in the Doha round of WTO talks) in many, many moons. Since talks broke down, there has been little discussion about reviving negotiations and absolutely no news that any breakthroughs on agriculture have been made.

Since that time, the Great Recession has led to protectionist policies worldwide and a lot of angst, particularly here in export-dependent China. Perhaps all this fear can finally break the logjam?

I’m not going to hold my breath on that possibility, but this has been bandied about recently, including in this New York Times article:

But there are signs that the collapse in trade and the rising protectionist rhetoric have awoken many leaders to the advantages of strong international rules to keep trade channels open. This is particularly true of China, which has suddenly found its exports on the receiving end of tariff increases and antidumping suits.

Quite true, of course. A lot of the noise on trade between the US and China, for example, has consisted of calling the other guy a protectionist while explaining why their own discriminatory practices are perfectly acceptable.

China of course has a great deal riding on avoiding a trade war. Its economy has not “decoupled” from the West and is still heavily reliant on exports. Although attempts are being made to rebalance the economy, these are ultimately long-term efforts. The government is certainly aware of this and is hedging its bets by cutting export taxes and giving incentives to export industries (policies I generally disagree with).

So is a deal possible? I am pessimistic. The US in particular is not politically situated to go for a free trade agreement. The US Congress is now in the hands of the Democrats, who have more or less aligned themselves with protectionist constituencies and have promised to, if anything, review prior/existing agreements in light of perceived environmental and labor flaws. A new deal would be tough for their supporters to swallow during a recession.

Are either the Europeans or large developing nations in the right frame of mind to make further concessions? I just don’t see this in the middle of a recession. Even in good economic times, you practically have to pistol whip a French politician before he’ll vote against the sainted French farmer. I’m not sure the Italians or Spanish are any different. I applaud the efforts of EU trade folks in getting approval on CAP (the Common Agricultural Policy) adjustments in the past few years, but going farther than that would be hard to imagine.

Developing nations are pretty much just holding on to what they have right now, and since they have already given up so much in the past, I don’t expect a lot of movement on that side either.

China might be the biggest booster for a new deal among all of them, or at least it makes sense. But really, I think China will be more than happy to maintain the status quo when it comes to protectionist policies. If things don’t get worse, then Chinese goods should have no problem satisfying old customers when demand picks back up again.