Failure of the current round of world trade-liberalization talks
might be a good thing. If they succeed, the result will be more free
trade and an acceleration of already widely unpopular globalization.
The Doha round, named after the capital of Qatar, where it began
in 2001, continues to move forward - but perilously.
"A lot of economies are handling all the disruptions and
adjustments they can deal with already," says Peter Morici, an
economist with the University of Maryland's business school, in
In a way, he has a "stop the world, I want to get off" view.
Change is just too fast for many nations to absorb. Throwing cold
water on freer trade for a while would let the dust settle.
That's far from conventional wisdom.
Most economists regard freer trade as a grand opportunity for
greater prosperity. Under their "law of comparative advantage," each
nation or business specializes in certain goods and services,
becoming highly efficient. In that way, all trading partners
eventually benefit through cheaper or better cars, clothes,
computers, software, etc. But in the short run, freer trade means
more discombobulation - for many, lost jobs and damaged businesses.
Freer trade results in losers as well as winners. Concern over
the losers is prompting various nongovernmental organizations to
gear up to protest when the 149-member World Trade Organization
meets in Hong Kong Dec. 13-18 for a key ministerial meeting.
With eight earlier multiyear deals in the post-World-War-II
period, international trade and investment has become highly
relevant to most of the world. World merchandise exports reached
$8.9 trillion in 2004 and are probably up another 6.5 percent this
year, the WTO estimates.
To Mr. Morici, this current round of trade negotiations "is no
good. We [the United States] do all the giving and don't get
anything in return. We need a new round."
Whether that's true or not, success in the Doha round could be
delayed until 2009, after the election of a new US president,
suspects Harald Malmgren, a Washington trade expert who helped
negotiate the 1964-67 Kennedy round.
Here's how Mr. Malmgren sees the Doha scene:
In Hong Kong, the negotiators could agree to a statement
affirming some progress and spelling out remaining differences. The
Office of the US Trade Representative, under former congressman Rob
Portman, is better prepared for this ministerial meeting than was
the case at earlier ministerial sessions. Most real negotiations are
done outside these cumbersome gatherings. Ministers want to make 15-
minute speeches for home consumption. …