The world won't end if there is a weak result from the Doha Round, or even if there is a failure to complete the round.
But the world will be a better place if we do. Economics columnist Martin Wolf takes up the theme: If trade liberalisation fails (Financial Times, Nov 1, subscription required). In addition to explaining what we stand to lose, he has some advice on how to conduct the negotiations:
Failure would weaken the WTO - "That would matter because the WTO represents the world’s most impressive achievement in multilateral rule-making."
A weakening of the WTO would almost certainly lead to yet more preferential agreements. Since these agreements are almost entirely unregulated, the weak would be at the mercy of the strong, while the latter would, in effect, be seeking to create commercial spheres of influence. The consequences must include a rise in global political tensions.
And a successful agreement would have widespread benefits - including for developing countries. He cites a recent World Bank study estimating the benefits from a "radical" trade liberalization at almost $300 billion a year after 10 years.
But how are we going to get there?
...First, there needs to be agreement at least on the modalities of the negotiations in Hong Kong. The aim should be a substantial cut in protection, with the biggest falls where barriers are now highest.
Second, the limited number of developing countries that are significant players in world trade... need to make substantial offers in all three areas of the negotiation: agriculture, non-agricultural market access and services. With the European Union’s internal trade excluded, just 20 countries accounted for 82 per cent of world imports of goods and 86 per cent of world imports of commercial services in 2004. Fewer than 30 players matter in these negotiations.
Third, developing countries that do little trade should be allowed not to make commitments, as has already been agreed for the least developed. This does not mean it is in the interests of these countries to tax consumers in favour of politically powerful domestic producers, far from it. It is far more important, however, to sustain liberal world trade than to force a host of small trading countries to make binding commitments.
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