If economic logic was all that counted, trade ministers could spare themselves a trip to the Gulf this week to talk about lowering barriers to global commerce.
Although the elixir of free trade works best if mixed with policies that promote economic stability, competition and good governance, it is a truism that permitting more imports translates over time into impressive income gains.
In a study prepared for the Nov. 9 to 13 meeting of the World Trade Organization (WTO) in Doha, Qatar, the World Bank calculated that coordinated steps to scrap trade barriers and promote allied reforms could lift an extra 320 million people out of poverty by 2015 by expanding global income by US$2.8 trillion.
"Trade and investment liberalization are part of the basics of getting things right," said Razeen Sally, a senior lecturer in international political economy at the London School of Economics (LSE).
"As a broad policy maxim, it really should be up there in lights because the overwhelming evidence ... and the weight of economic history do show that opening to trade as part of a wider combination of policies delivers much higher growth. And that in turn makes serious inroads into poverty reduction," Sally said.
Apart from the longer-term benefits, policy makers say there is a pressing need to agree in Qatar on the agenda of new trade talks in order to shore up confidence and fend off demands for import curbs spawned by a rare synchronized slowdown in the global economy.
After a 13.3 percent advance last year, growth in global trade is set to slow to a crawl of just 1 percent this year -- a record deceleration -- as import demand in the US, Europe and Japan drops hard, according to the World Bank.
"The biggest danger right now is that economic weakness will generate protectionist pressures, as it has in previous recessions," said Peter Sutherland, European chairman of investment bank Goldman Sachs.
Sutherland, who was the WTO's first director-general, noted that the US authorities were due to rule soon on remedies to shield the US steel industry from cut-price imports. A ruling that led to broad sanctions against other producers would undoubtedly sour the global trading environment, Sutherland said. "The launch of a trade round should have the effect of dampening pressures for protection -- or, at least, of making governments think twice before responding positively to those pressures," he wrote in Goldman's Global Economics Weekly.
A related danger is that failure in Qatar would further dent confidence in the multilateral trading system and the WTO itself, which has still not recovered from the collapse of an earlier agenda-setting conference in Seattle in December 1999.
This is especially the case because the sheer length of a trade-negotiating cycle -- the last one, the Uruguay Round, lasted seven years -- makes quick regional and bilateral deals attractive to businessmen working to ever-shorter product cycles.
"There is a perception that the business community is less engaged in supporting multilateral negotiations than it was in the lead-up to the Uruguay Round," Ken Heydon of the Organization for Economic Cooperation and Development's trade directorate wrote in the OECD Observer, an in-house magazine.
Mari Pangestu of Indonesia's Center for Strategic and International Studies said the steel stand-off, Japanese curbs on some Chinese farm imports and a spate of bilateral trade pacts showed the multilateral system was under strain even before the Sept. 11 attacks on the US deepened the global downturn.
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