Imagine that the world’s trade ministers simply walk away from their forthcoming Hong Kong meeting of the World Trade Organization (WTO) with this simple declaration: “We failed to reach an agreement; we’ll try to do better next time.” This would bring the so-called Doha “Development” Round to an unsuccessful conclusion, but it would be no disaster.
Talk to World Bank and WTO officials, and you will get an earful of inflated claims about the benefits that a successful Doha round would bring. These officials often make it sound as if the livelihood of hundreds of millions of poor people in developing nations hangs in the balance. Look closer at these claims, and you find that they are built on sand.
The World Bank’s most recent estimate is that complete trade liberalization (including in manufactures and by developing nations themselves) would produce a net gain to the developing world of half a percentage point of their income. But that hasn’t stopped the Bank doing its best to hide this meager impact behind impressive-sounding claims.
The fact is that the world economy is more open today than it has ever been, and will remain so even if the Doha talks collapse. Most developing nations have opened themselves significantly to foreign trade and no longer employ the most damaging policies of the past (such as quantitative restrictions on imports).