The Debacle of Geneva, II

By July 31, 2008Trade

Looks like the Wall Street Journal editorial writers and Helmut Hauschild of the Handelsblatt are on the same page, very, very discouraged about the failure of the Geneva WTO negotiations. From today’s WSJ editorial, “The End of Free Trade?”

Having defeated Doha, the world’s protectionists will now press forward with their special-interest agendas, hoping to build a lattice-work of cartels and managed trade. One way to push back is with bilateral or regional trade pacts, but these also risk establishing regional cartels and a web of conflicting trade rules that raise business costs.

Doha’s failure is a lost opportunity, but it could become much worse if it galvanizes even part of the world to resort to the tariffs and currency devaluations that led to and exacerbated the Great Depression. It was precisely the bitter memory of that era that led the world’s postwar statesmen to build the GATT, the European Common Market, and the rest of free-trade system we now take for granted at our peril.

What the world really needs now is a fresh burst of global economic leadership — on currency movements, pro-growth tax policies, and free trade.

At least they put a question mark on their headline.

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