US foot-dragging dims hopes for world trade deal
By David R. Francis | 11.20.09
Prospects for reaching a deal in the eight-year old Doha Round of global trade negotiations were remote; now, they’re truly distant.
On Nov. 30, trade ministers of the 153-nation World Trade Organization (WTO) hold their ministerial conference in Geneva , but their agenda doesn’t even mention negotiations. It is officially defined as a “housekeeping” session. Since they only meet once every two years, that’s a little like hosting an Olympics without scheduling any sporting events.
An impediment to a deal is the United States , which is a switch from the past. The Geneva session will open precisely 10 years after a similar ministerial meeting in Seattle exploded with violent protests outside and disagreement inside on starting the current trade round. Despite that resistance, the US pushed for and other nations agreed to launch the Doha Round in late 2001, amid widespread sympathy fostered by the 9/11 terror attacks two months earlier.
Part of the problem today is that the Obama administration is up to its neck in other issues, including healthcare reform, financial-markets regulation, labor issues, global climate, and what to do with the Bush tax cuts when they expire, says Harald Malmgren, a Washington consulting economist who helped negotiate the successful Kennedy Round of trade talks decades ago. So trade matters are going to have to wait.
But the US is also hanging tough, pushing developing nations to open up their financial markets to competition from foreign companies, a difficult pitch considering the world’s financial crisis. “We have said flat-out that there will be no deal without a solid result on services which would result in new market opportunities, but we believe that a positive outcome is still achievable,” US Trade Representative Ron Kirk said last month at a meeting of service industry officials in Washington .
Trade liberalization is never politically popular. Mr. Obama and probably more than 60 new members of Congress ran partly last year on trade reform platforms. Some campaign messages directly opposed the Doha Round. Obama talked of renegotiating NAFTA and CAFTA.
Nonetheless, Mr. Malmgren does not regard Congress as truly protectionist. Most members recognize the economists’ argument of “comparative advantage,” that nations are better off if they export goods and services they can produce at a lower cost than other countries, and similarly import cheaper goods and services.
Activists are also pushing countries to refocus their trade agenda, but not in the way the US wants. Lori Wallach, director of Public Citizen’s Global Trade Watch, hopes the WTO will start to address proper regulation of the financial industry, the climate crisis and related energy matters, and the excessive concentration of food production in relatively few nations. Some 56 developing countries have become net importers of food to feed their populations since the Doha Round started, she says.
“Junk that old [WTO] agenda,” she says. It’s a “totally different world” since the Doha Round was launched in 2001.
– David R. Francis is the Monitor’s economics columnist.
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Best deals from Black Friday 2009 ads: Use your smartphone
By David Grant | 11.20.09
Using Black Friday ads to get the best deals could be grueling. If your best sales intelligence came from printed retail circulars, it meant organizing and comparing long lists. If you used an online deals aggregator, you still didn’t have a good way of transporting that knowledge to the store without putting it on paper.
Enter the smartphone — and retailer’s rush to connect with customers through the device.
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Um, Virginia, Santa’s not getting his mail in North Pole, Alaska
By Laurent Belsie | 11.19.09
Fewer children will get their letters to Santa answered this year.
Tight budgets and tougher privacy protections have forced the US Postal Service to scale back its Operation Santa program, where volunteers help postal workers answer children’s letters to St. Nick. Some residents of North Pole, Alaska, think the post office is being a Scrooge. (more…)
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On Black Friday sales 2009, can Amazon compete with Wal-Mart?
By David Grant | 11.19.09
Until Wednesday, Wal-Mart was siccing its legal team on websites of all types to keep its Black Friday 2009 deals from lighting up cyberspace. At the same time, Radio Shack was e-mailing scanned copies of its “Shack Friday” circular to the news media.
The lesson? Wal-Mart runs the Black Friday show. All others need to hustle to keep up.
But can they?
Many Black Friday watchers are skeptical. Because Wal-Mart maintains lower prices with similar profit margins, the initiative belongs to the Bentonville, Ark.,-based corporation.
“It all depends on how deeply Wal-Mart wants to cut prices. It’s kinda throwing the ball up in the air in terms of Wal-Mart and seeing how it trickles down to the other retailers,” says Steven Rogé, portfolio manager at R.W. Rogé & Co., a financial-management firm in Bohemia, N.Y.
There is one retailer that might (at least eventually) take a bite out of Wal-Mart: Amazon.com.
“Black Friday has traditionally been an in-store shopping holiday, but it has also creeped online in a big way as well and merchants have incredible deals online for those people who don’t want to fight the crowds in the stores. This has made a way for Amazon to get into the game,” says Luke Knowles, co-founder of Internet coupon distributor Coupon Sherpa.
Amazon’s power derives from the migration of consumers to online shopping combined with advances in mobile technology that makes comparison shopping more comprehensive and immediate than ever.
“You’re in Wal-Mart. You see the product you’re looking at cheaper on Amazon,” via a smartphone, Mr. Knowles explains, “and you can be physically standing in Wal-Mart and buy something on Amazon.com.”
It’s not as if brick-and-mortar stores are eschewing online sales. Far to the contrary, they are pushing hard into mobile and online retail.
Traditional retail outlets “are trying to find ways to engage that social media a little bit more than they have in the past,” says Brent Conver, director of DVDTalk.com. “Before, if anything breaks on the Internet, [retailers think] ‘We’re going to lose our in-store purchases.’ Now, they are saying, ‘We want more Internet activity anyway, so we’re going to make sure that we lead with a few important deals and they’ll pick their spots to drop an important coupon online.’ ”
But Amazon isn’t developing online strategy. It’s perfecting it.
Over the last three years, Amazon’s revenue has grown an average 31 percent per year compared with 9.1 percent for Wal-Mart. While Wal-Mart’s $400 billion-plus revenue last year dwarfed Amazon’s $19.2 billion, Mr. Rogé says, “those are quite substantial revenue numbers for Amazon, and those are sustainable probably for the next decade. Ten years from now we’re going to be talking about Wal-Mart in bricks and mortar as a clear winner and online, possibly even competing in the same breath as Wal-Mart, Amazon is going to be right there.”
For brick-and-mortar outfits, the key is to compete on adding customer-service value to every product. By offering free installation, warranties, and friendly, hassle-free service, retailers without Wal-Mart’s huge purchasing power could compete on consumer experience once the product is off the shelf.
“If you think back, and if you think Sears, you think, ‘I can buy my product here and not worry about anything going wrong. I can buy a Craftsman lawn-blower and I can take it back and they are as friendly as anything and I’ll get a new one. To some extent, that changed over the past couple of years,” Rogé says. “To some extent, that’s why a lot of us go to Costco to buy stuff, because we know that pretty much they’ll take anything back. So you can feel safe.”
Still, while companies like Target, Sears, or Amazon might be able to match or beat Wal-Mart on a particular product, on balance, Wal-Mart stands alone.
For a particular model TV, for example, “Wal-Mart might not beat that price but Target, that’s their one-trick pony,” says Michael Brim, founder of BFads.net. “Wal-Mart is the three-headed monster of Voltron. They’re big.”
See also:
The story behind the leak of Wal-Mart’s Black Friday deals
Are Black Friday’s years numbered?
Black Friday 2009 Wal-Mart ad: Some people know what’s in it
On Black Friday 2009, Will Best Buy or online stores win?
Wal-Mart’s 2009 Black Friday Flier
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— David Grant is a Monitor contributor. What are the best Black Friday deals on the market right now? Let us know on Twitter.
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Wal-Mart Black Friday sales for 2009: The story behind the leak
By David Grant | 11.18.09
Updated 11:15 a.m. EST with comment from Wal-Mart.
Wal-Mart’s Black Friday sales for 2009 are now alive in full color on the Internet. From door-buster TVs to a $198 laptop to a $59 GPS system, the retail titan’s Black Friday plans have been laid bare at last.
Where just this past weekend Wal-Mart was brandishing its brace of lawyers at the leak of several movie and videogame prices, Wednesday it OK’d the release of its entire clutch of Black Friday secrets ahead of its own Nov. 23 release date.
