For the first time since 2001, when the much-maligned Doha round of trade talks was inaugurated, the WTO’s members declined to reaffirm the round’s mandate this weekend in Nairobi. One senior trade delegate told the Financial Times that the Nairobi meeting represented “the death of Doha and the birth of a new WTO.” In abandoning a far-reaching agreement, representatives in Nairobi decided on a ban on agricultural export subsidies, and agreed to slash tariffs on 201 IT products.
This is good news, on the whole. The talks had become a quagmire, blocking global progress on the trade agenda. The leading hold-up was that some developing countries, including India, overplayed their hands, using their ability to veto progress and trying to hold out for unrealistic concessions. The developed economies worked around the stalled talks, pushing big Pacific and Atlantic deals like TTIP and TPP. The BRICS, who once thought they would be reshaping the world economic order, have been left outside, noses pressed against the windows.
Still, the problems of the WTO-based trade negotiations will be with us long after Doha has gone to its final resting place. Much of the low-hanging fruit in trade liberalization has been picked, and there are so many WTO members that it is hard to get agreement on anything significant. And given that we are still in a period of slack global demand in which most of the world’s countries are engaged in promoting exports by keeping their currencies low, it seems unlikely that there will be widespread support to intensify global competition.
The world’s trade agenda in many ways still reflects the assumptions of the 1990s when history was over and the world was flat. These days, things are looking more complicated. Developing a new and constructive trade agenda will be difficult. Even so, putting in the hard work is worth the potential rewards. Trade advocates should remember that the greatest beneficiaries of liberalized trade are the world’s poor. Opening the doors to world trade opens the doors to better jobs and lives for people who could really use a break.