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International Herald Tribune
Special Supplement on the World Trade Organization Ministerial
(November 8, 2001)
New trade round will be an act of defiance
By Richard D McCormick
Despite the events of 11 September and heightened security concerns throughout the world, the World Trade Organization is meeting in Doha as originally planned. That gives reason for hope.
The conference in the Gulf state of Qatar makes clear that more than140 WTO member governments will not allow terrorism to deflect them from their course. All participants are determined, especially now, to make a success of this crucial ministerial meeting. Doha is an act of defiance.
If the WTO can, indeed, launch a new trade round, it will send a confidence-building signal to business and the countless millions who depend on business for their livelihoods. Amid the gathering evidence of a global economic downturn, companies are eagerly awaiting that signal.
Business’s belief in the value of a new trade round is clear in the results of a survey of executives conducted recently by the International Chamber of Commerce and Germany’s Ifo Institute for Economic Research. On every continent, executives agreed that improved market access and economic growth would create new business opportunities.
Nobody should expect a new trade round to produce results quickly – the previous Uruguay Round took eight years. But it is within the grasp of the trade ministers to set the ball rolling. The stakes, political as well as economic, are enormous.
The failure to get a trade round off the ground at Seattle in 1999 can be written off as a temporary setback. The economic impact was limited because it happened during a period of strong economic growth. In today’s very different economic climate, the effect of a second failure would be much worse.
The world community cannot risk allowing the WTO, guardian of the rules-based multilateral trading system, to be seriously weakened. A future in which rich and poor nations alike disregard the WTO system and scramble to make what bilateral deals they can would provoke a return to protectionism. Governments in the new century must avoid repeating the mistakes their forerunners made in the 20th century.
Statesmanship will be needed on all sides in Doha. One of the advantages of a broad trade negotiating agenda is that it allows room for everyone to accept compromises through old-fashioned horse-trading. Potential deal-breakers – whether agricultural subsidies, anti-dumping, competition, the environment, or intellectual property rights – can and must be subject to give and take.
No government will get everything it wants, but everybody will get something. The ultimate reward will be benefits far exceeding the concessions individual countries, or groups of countries, will have to make.
It is vital that this be the “development round” that UN Secretary-General Kofi Annan has called for. Trade is a powerful tool by which developing countries can lift themselves out of poverty. It is not, of course, the only means – peace, the rule of law, wise government and investment in health and education must all be part of the equation.
The link between trade and economic progress is undeniable – witness a recent WTO study showing that the poor countries that are most open to trade are the ones having the greatest success in catching up with rich nations. Study after study has shown that further trade liberalization would generate far more income for developing countries than any aid they receive.
The political gains from of a new trade round will be just as important as the economic gains. Inability to export the goods they can produce makes it much harder for developing countries to overcome poverty – and poverty breeds instability and conflict.
Especially in these troubled times, a broad-based trade liberalization round will help to bring nations together, exchanging goods and investment, technology and ideas more freely – an antidote to the division, fear and enmity the terrorists seek to generate.
Doha has to succeed.
Richard D McCormick is President of the International Chamber of Commerce
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