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The Future of the WTO

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Abstract:

The suspension of Doha Round in late July caused global concern that the international trade talks will permanently collapse. However, in a new Policy Outlook, The Future of the WTO, the Carnegie Endowment's Sandra Polaski argues that such fears are unfounded. In fact, the collapse of the talks provides a much-needed opportunity to rethink the negotiations and resume them on a better tack. The Policy Outlook analyzes the causes of the recent failure and the political climate. It identifies key objectives that must be addressed when talks resume.

Polaski, director of the Carnegie Endowment's Trade, Equity, and Development Project, argues that although the immediate cause of the collapse was disagreement on agricultural trade between the U.S. and the EU, other problematic issues would have halted the talks as they continued. The main issue facing the Doha Round--which has not yet been confronted-- is global employment. Until a trade deal is found that allows countries to manage the job destruction that trade expansion will cause while presenting better prospects for strong job creation, there will be no agreement on a new trade regime.

The suspension of talks is causing undue alarm, Polaski argues. The current round of trade negotiations has been underway for only four and a half years; it took nearly twice that time for the previous round of talks to conclude. There is plenty of room for world trade to expand under the existing rules. The only sense of crisis comes from setting unrealistic deadlines that the WTO is unable to reach, creating a false sense of failure. Polaski argues that what the WTO needs most now is clear-sighted leadership, acknowledgment of global job anxiety, and a commitment to address the needs of the growing number of developing nations in the WTO.