Is the WTO slowing down free trade?

Earlier this week, I wondered why Dan Altman was calling for the death of the World Trade Organization when regional free trade agreements–which he prefers–are proliferating in any case. Here’s his response: [I] do think that its trade negotiations should cease. Most of the WTO’s 153 members have very limited resources, both human and financial, ...

By David Bosco, a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

February 24, 2011, 3:58 PM

Earlier this week, I wondered why Dan Altman was calling for the death of the World Trade Organization when regional free trade agreements--which he prefers--are proliferating in any case. Here's his response:

Earlier this week, I wondered why Dan Altman was calling for the death of the World Trade Organization when regional free trade agreements–which he prefers–are proliferating in any case. Here’s his response:

[I] do think that its trade negotiations should cease. Most of the WTO’s 153 members have very limited resources, both human and financial, for participating in trade talks. If the Doha round ends, they’ll be able to devote more of those resources to the productive avenues offered by bilateral and regional deals. Billions of dollars and countless hours have already been spent – and wasted – on Doha. Enough is enough.

This is a hard argument to grapple with because it’s essentially counterfactual (if Doha didn’t exist, we’d see even more regional and bilateral trade deals). It seems like a plausible argument for smaller and mid-size countries, who might lack the staff and expertise to negotiate both Doha and regional agreements (although we still see plenty of small countries signing regional agreements even as the WTO process lumbers on). I think it’s harder to make this case when it comes to the major players, who do have the resources to juggle multiple negotiation processes.

I raised the subject with my colleague Mireya Solis, who’s done interesting work on the interplay between WTO negotiations and regional agreements. Here’s her take:

I think that if the Doha Round were to fail, the relative importance of regional free trade agreements would increase, not so much because governments would have more time and energy, but because these preferential trade agreements would become the venue to obtain fresh liberalization commitments and new rules on trade and investment. In doing so, however, they would also incur substantial transaction costs of negotiating multiple agreements with different tariff schedules and obligations.

Her latter point is an interesting one: that doing free trade via bilateral and regional trade agreements could ultimately be more taxing on states, since you’d have to pursue multiple agreements in order to replicate what the WTO process can offer.

I’m also not sure that the Doha process is actually that taxing for most states. There are long lulls in the process, and my impression is that much of the serious work now is being done by the big players in conversations with each other. Overall, I’m doubtful that the possible benefits of shutting down the Doha process would outweigh the costs.

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist