Free trade and open markets have done much to create wealth and opportunities and lift millions of people out of poverty in recent decades. But, especially in these troubled economic times, countries are still tempted to try and protect their domestic industries and jobs behind trade barriers. This is dangerous and will hamper the recovery of the global economy. The complex spat last week between China and the US — over illegal subsidies and duties on cars and poultry — threatens to deny their companies access to markets they need to expand their businesses and create jobs. In India, the government was not able to open the retail sector to international investment because of political opposition.
This is why it is important that the ministerial meeting of the World Trade Organisation (WTO), which concludes in Geneva today, find a way out of the current deadlock in negotiations for a new international free trade agreement. It is clear that the present round of talks is not likely to achieve its aim of opening markets in such a way that it supports the further development of emerging economies. Neither developed nor emerging countries have been courageous enough to put their national interests aside for the greater good.
However, all is not lost. This meeting will see Russia join the ranks of the WTO, further strengthening its authority and the likelihood of an agreement to open trade in some sectors, like government services. Existing trade blocs may also do more to reduce obstacles to commerce between member states. But, this is not ideal. Emerging economies, such as India and China, must recognise that with more power comes more responsibility for global growth, while advanced countries must realise that they will also benefit from more free trade in the new world order.
