Global Trade: Deal or No Deal

From yesterday’s Guardian, an article on the Doha round of global trade negotiations by Kevin Gallagher, research fellow at the Global Development and Environment Institute at Tufts. The current issue of D&S includes a feature article on the economics of climate change by Frank Ackerman, also of GDAE and a long-time D&S Associate.

Deal or no deal

Current proposals on international trade amount to deregulation in the developing world and protectionism for the rich

In Lewis Carroll’s classic, Through the Looking Glass, the Red Queen says, “It takes all the running you can do, to keep in the same place”. In the turbulent wake of the financial crisis, developing countries find themselves in a perilous new “wonderland” where they will need all the running room they can get.

Contrary to most public pronouncements, rushing to a global trade deal, as the so-called G20 leaders proposed in their own Wonderland moment in November, could take developing countries in the wrong direction.

The final G20 communiqué argued that without a swiftly negotiated agreement in global trade talks at the WTO, nations will rush to erect trade barriers and send the world economy even further into the abyss. The statement has now prompted yet another flurry of negotiations in Geneva.

Warnings of rampant protectionism are fear mongering. There is no danger of the kind of protectionism that helped deepen the Great Depression. Since that time, the world has established a WTO where tariffs are at their lowest in world history. What’s more, both in the communiqué and at the recent Apec summit, world leaders pledged not break their WTO commitments to respond to the crisis.

Most importantly, further deregulation will not fix a problem caused by deregulation in the first place. Current proposals on the table amount to deregulation in the developing world and protectionism for the rich.

Read the rest of the article.

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