Magazine article Foreign Policy

R.I.P., Wto

Magazine article Foreign Policy

R.I.P., Wto

Article excerpt

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Someday historians may look back on 2010 as the year the global trade system died--or contracted a terminal illness. A pledge by world leaders to complete the Doha round of global trade negotiations this year looks increasingly likely to end in yet another flop, and that would deal a crushing blow to the trade system as we know it.

Of course, commerce will continue across national borders, and one-off deals between countries will still happen. But the slow-but-steady, across-the-board opening of markets that has fueled growth for decades is grinding to a halt. After eight painful years of standstill and failure, with each meeting just a shoveling of intractable problems forward to the next, the Doha talks might collapse once and for all in 2010, possibly taking the World Trade Organization (WTO) down in the process.

Yes, negotiators could once again defer the day of reckoning by setting a new deadline and resolving to try again later--just as they've already done in Cancun, Geneva (three times), Hong Kong, and Potsdam. But they're running out of chances. No less an authority than Stuart Harbinson, the former WTO General Council chairman who played a key role in the round's launch in 2001, wrote recently: "This time ... the crisis is real. Too many deadlines have come and gone and the WTO simply cannot afford a repeat. The fundamental credibility of the institution is now at stake.... 2010 is a real deadline."

That's dangerous, because for all its failings, the WTO Is a rare international organization that works as intended. The Geneva-based trade group is the current embodiment of the system established after World War II to prevent a reversion to 1930s-style protectionism and trade wars. Its rules keep a lid on its member countries' import barriers, and members take their trade disputes to WTO tribunals rather than imposing tit-for-tat sanctions on each other's goods. In addition, the WTO is the guardian of the most-favored-nation principle, which requires members to treat each other's products in a nondiscriminatory fashion--a valuable bulwark against the sorts of trade blocs that can lead to friction or even military conflict.

If Doha falls apart, the WTO's ability to continue performing its vital functions would be imperiled. If It can't forge new agreements, how long before it loses its authority to arbitrate disputes? …

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