COPENHAGEN – Last month, the Doha negotiations, promising freer trade, broke down, ostensibly over a small technicality in safeguard rules. In reality, the talks collapsed because nobody – not Europe, not the United States, China, India, or the other main developing countries – was willing to take the political short-term hit by offending inefficient farmers and coddled domestic industries in order to create greater long-term benefits for virtually everyone.
And they broke down because we really don’t care. After a few exasperated editorials, the world has pretty much dropped the subject and gone back to its usual concerns.
This is foolish. Establishing significantly freer trade would help the world combat almost all of its biggest problems. For an astonishingly low cost, we could improve education and health conditions, make the poorest people richer, and help everybody become better able to tackle the future.
We have known for centuries that free trade almost always benefits both parties. The economist David Ricardo pointed out in 1817 that both Great Britain and Portugal would benefit if they exploited their comparative advantages. Portugal could produce wine cheaply, whereas Great Britain could produce cloth much more cheaply than wine. By selling cloth and buying wine, Great Britain obtains more of both, as does Portugal. The same holds true today, when countries, doing what they do best, produce more and exchange it for more of all other goods.