The Demise of the Doha Trade Talks – A Lost Opportunity

The collapse of the Doha Trade Round at the end of July should be viewed as a true setback for all world economies. The real battle among the trade talk participants was between those who want to expand the era of global trade and prosperity, and those who want to carve out their own protected niches. The protectionists, well meaning but misguided, we believe, caused this failure to reach expanded free trade agreements.

Free trade has proven to be a strong path to improved life styles. To quote the Wall Street Journal (July 31), “In 1990, trade represented about 40% of world GDP (gross domestic production), according to the World Bank. By 2004, trade exceeded 55% of world GDP, and the global economy had expanded by 50%. This opened vast new opportunities for global business, spreading competition and innovation that have helped to raise the living standards across the globe.”

“Having defeated Doha, the world’s protectionists will now press forward with their special-interest agendas, hoping to build a lattice-work of cartels and managed trade. Doha’s failure is a lost opportunity, but it could become much worse if it leads to the tariffs and currency devaluations that led to and exacerbated the Great Depression.”

We hope for a new surge of global economic leadership soon to help restore the positive free trade momentum among all countries. It would be a smart move!