PARIS — Governments around the world face weakening economies and soaring food prices. Amid the hand-wringing, an important and immediate step they can take to help would be to agree on a new multilateral trade deal.
Freeing up trade in goods and services can give the world economy a powerful boost in terms of increased innovation and productivity. According to OECD (Organization for Economic Cooperation and Development) estimates, a 50 percent reduction in tariffs and other trade-distorting support in agriculture and manufactured goods alone would generate global welfare gains estimated at an annual $44 billion. Developing countries in particular stand to gain GDP per capita growth of 2 percent a year from full liberalization of tariffs
Yet still governments are hesitating, for all sorts of mistaken reasons. Delaying further trade liberalization will deprive hundreds of millions of people of the chance to build a better life.