After the breakdown in WTO negotiations last July, many commentators left the multilateral trading system for dead. A few political actors, in Italy and elsewhere, did not conceal their satisfaction, hoping that the challenge posed by globalization would just go away. But negotiations have restarted, although we won't see the final results until after the US elections. Such negative views have not taken Pascal Lamy's tenacity into account. The WTO boss is determined not to waste the job so far done about a certain number of trade deals. The commitments of the US and EU to cut agricultural subsidies, which distorts markets and economies, have been significant, but these offers were of little value until all the pieces of puzzle fell into place. The main emerging economies have signaled their intention to increase their openness to manufactured goods coming from advanced economics, while insisting on their protection of infant industries. Also in services, the leading sector of the economy today, there has been progress. The same can be said for the issue of denominations of origin, which is keenly felt in countries like Italy.

  The negotiations have stalled because of the extraordinary protection demanded by India against the excessive growth of agricultural imports, which would threaten the subsistence economy of Indian peasants. This is not an illogical request, but it can be dealt with appropriate technical solutions. The struggle against Third World poverty requires domestic structural reforms as well as international assistance. The advantages of a trading agreement are not only measured in purely commercial terms. Reviving the multilateral framework of global trade would signal a shared commitment on the part of major economic powers in times of slowing demand. For 60 years, international trade has been the engine of development. Regional agreements can be useful complements to a multilateral framework, but they are certainly no substitutes for it. The Doha Round is the last agreement to be discussed with norms and procedures of the 20th century, such as reciprocal reductions in subsidies and tariffs, non-discrimination in trading policy and general consensus on any agreement are increasingly impractical in a WTO having 153 member countries. Before us are new issues and needs: a carbon tax to counter climate change; a trading regime for biofuels; heightened environmental protection in producer and consumer countries; a shared management of natural resources in order to avoid export blockades, runaway prices and the risk of penury after decades of abundance and waste; finally, the crucial issue of energy-generation. A new institutional framework will need to be devised to face these new challenges. It is thus high time that we put the Doha Round, which has been dragging on since 2001, behind us, so that the world economy can look ahead with courage.

by Giorgio Sacerdoti,
Professor of International Law and WTO Court of Appeals