Does the Trading System have a Future?

There is a great deal of ruin in the trading system. Yet, in many respects it has been a huge success. The opening of the world economy of the past three decades and the creation of the WTO itself are both aspects of this great success. The question, however, is where we go from here, at a time when the Doha round seems im¬possible to complete, preferential trade arrangements are exploding, the WTO is subject to constant political attack and protectionist pressures are rising, particularly in high-income countries. These difficulties are not new. Things looked even worse in the mid-1970s and, again, in the mid-1980s. Nevertheless, it is important to renew institutions and reinvigorate the move towards liberal trade that has brought such great opportunity to the world. The essence of the recommendations of Martin Wolf can be brought down to four points: stress the value of unilateral liberalisation; discipline PTAs, ideally by creating just one PTA available to all; refocus the WTO, by reconsidering the idea of a single undertaking and by moving away from huge rounds; and, finally, focus on the sorts of domestic reforms that will allow societies to remain open to the world.