US not alone as super trade power, author says

Jan 23, 2003, vol. 26, no. 2
By Howard Fluxgold

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The United States is not as preeminent a world power in trade as it is militarily, contends international relations professor Ted Cohn (left), who has recently completed the herculean task of writing a book on international trade, while revising his text on international political economy.

“Many who focus on security issues in international relations say we are in a one power world today,” Cohn explains. “They say the U.S. is calling all the shots. But if you look at economic areas such as trade, it is a different story. In trade the U.S. has a huge balance of trade deficit and is not as pre-eminent as it used to be. The European Union (EU) and the U.S. are pretty much on a par today as major trading powers.” His book, Governing Global Trade: International Institutions in Conflict and Convergence, traces “how we got to a situation where the EU is at about the same level as the U.S. in trade.”

Cohn's book focuses on the decision-making process that has helped produce the rules by which world trade is governed. Cohn examines the role played by three institutions and their relationship to the General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization (WTO). The first is the group of seven and eight (G7/G8), made up of the heads of government and state of the major economic powers - the U.S., Japan, Germany, France, the U.K, Italy, Canada, and in the G8 Russia. However, the G7/G8 has been preoccupied with security and financial issues rather than trade. As a result, an informal group was set up in 1981 called the Quadrilateral group (the Quad) of trade ministers and officials from the U.S., the European Union, Japan, and Canada.

Although the Quad has remained out of the limelight, it has been a key component of decision-making. The third institution is the Organization for Economic Cooperation and Development (OECD), which helps to develop a consensus on issues among developed countries before they are brought to the GATT/WTO.

Cohn says that the exclusivity of the trade decision-making process has angered developing countries as well as many non-governmental groups leading to protests at the 1999 WTO ministerial meeting in Seattle. Those protests did bring change.

Cohn argues that “the developed countries are now more sensitive to the concerns expressed by developing countries and are attempting to become more inclusive. However, some exclusivity is necessary, because without a degree of consensus between the U.S. and the EU there will be no global trade agreement.”

Cohn attributes trade disputes such as the softwood lumber disagreement partly to the growing inter-dependence of trade since the Second World War. While previously trade issues focused primarily on border measures such as tariffs, now what one state does within its own borders often affects international trade.

“The U.S. claims that our stumpage system gives us an unfair advantage. However, as Canada points out, the U.S. claim is highly debatable,” Cohn says.

While writing Governing Global Trade, Cohn was asked to write a second edition of his textbook, Global Political Economy: Theory and Practice. It was first published in 1999 and is now widely used in universities in the U.S., U.K. and Canada. “A lot of my being has gone into this textbook,” he reveals, but promises never again to work on two books simultaneously. “My wife wouldn't allow it,” he laughs.

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