"Mr Crean noted the resolution of G20 leaders in Washington last week to push for a conclusion of the Doha round "

Here's good news if you're a free trader. From the FT:

"Australia to join transpacific free trade pact

By Naomi Mapstone in Lima

Published: November 19 2008 07:22 | Last updated: November 19 2008 07:22

Australia plans to join a regional trade pact that spans the Pacific Ocean.

Simon Crean, Australia’s trade minister, told the Financial Times that Australia would join Brunei Darussalam, Chile, New Zealand, Singapore and the US in the Trans Pacific Partnership, a “free trade” agreement.

Mr Crean said Peru was also likely to announce its decision to join TPP this week at the meeting of the 21 economies of the Asia Pacific Economic Co-operation group. Japan and Vietnam had also expressed interest.

The TPP was an important ”bridge” to creating a region of seamless trade and investment regimes across all of the Apec countries, Mr Crean said. ”If any country wants to secure its economic future, it’s got to engage in trade, and it’s got to find the means by which we continue to liberalise the basis upon which they can engage in trade,” he said."

This makes perfect sense.

"Such regional trade agreements are seen by critics as undermining global trade liberalisation but have flourished as the Doha world trade round talks have lost momentum."

The free trade movement has gone regional, but not stopped because of the problems with Doha. I 've already argued that completing Doha would be an important boost to the world economy in this crisis.

"Together the 21 Apec economies, which include the US, China, Russia and Mexico, account for about 55 per cent of the world’s GDP and about 50 per cent of world trade. Some within Apec fear a proliferation of bilateral agreements is proving unwieldy, however, and champion the formation of the free trade area for the Asia Pacific (FTAP)."

"The US, for example, has bilateral agreements with Singapore, Australia, Chile, Mexico, Canada, Korea and Peru, and is considering a deal with Colombia.

Juan F. Raffo, chair of Apec’s business advisory council, said a free trade area of the Asia Pacific was achievable within three years.

”It sounds like a little bit of a joke, but 420 is the number of bilateral FTAs you would need to have to have all the Apec countries integrated,” said Juan F. Raffo, chair of Apec’s business advisory council. ”… There’s no other way but to push for a more orderly agreement of trade between the Apec countries, in view let’s say of the constant slowness and failures of the Doha round.”

This complexity is a great argument for Doha. The push towards free trade will continue, with or without Doha, but it would be easier with it.

"Mr Crean noted the resolution of G20 leaders in Washington last week to push for a conclusion of the Doha round of global trade talks, saying it was ”one of the most important things trade ministers could do” to stimulate global economic activity.

”Here at Apec this week, nine of the G20 countries are participants. It is incumbent on us to find a strengthening of the resolve that was there last week to take the Doha round of world trade talks to a conclusion.”

Absolutely.

"any document containing the word "modalities" is a complete and utter waste of time and space. "

MacroMan agrees with me about the G20 statement:

"Well, that was exciting.

The weekend G20 meeting was evidently highly successful, at least if we are to judge by the length of the statement the resulted from the meeting. G7 statements are usually short and (relatively) punchy, and able to fit on a single printed sheet.

The G20 statement, on the other hand, was long and expansive, filling a full eleven pages when transposed onto Microsoft Word. If it were full of detailed policy prescriptions, the length could perhaps have been justified. As it was, Macro Man tried to read the whole thing but failed out of sheer boredom.

The sentence that did it for him was the following:

"Further, we shall strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome."

Macro Man has very few hard and fast rules in life. One of them, however, is that any document containing the word "modalities" is a complete and utter waste of time and space."

Here's an earlier post.

"finishing the Doha Round WTO negotiations would both provide a boost to the world economy "

Matt Yglesias downplays the importance of free trade and Doha:

"Trade is an interesting subject, but it just not a policy area likely to shift a great deal over the next few years no matter who wins. The most important trade-related thing we could do at this point has to do with agriculture, but structural issues in American politics that have nothing to do with the identity of the President make it very unlikely that anything will change. If you really care about moving the ball forward, trade-wise, what’s needed is some smart ideas about practical approaches to farm policy reform."

This clearly seemed a mistake, and so I commented:

1. Don the libertarian Democrat Says:
   October 29th, 2008 at 1:08 am

   The trade issue will be important because of, for example, the current currency crisis, collapse of commodity prices, and credit drying up in the smaller countries.

Today on Vox I found this:

"The effects of the global slowdown will be particularly felt by the developing countries who benefited greatly from high global growth and falling trade barriers. Asian and Latin American exporters of manufactures were the great winners of previous rounds of trade liberalisation and commodity exporters in Africa and Latin America greatly benefited from the recent boom in commodity prices that is now coming to an end. Conversely, these countries stand to lose particularly if there is no progress and maybe set-backs in global free trade. A successful Doha round should focus particularly on removing remaining barriers to trade in manufacturing in rich and emerging markets, and on removing trade barriers and distorting agricultural policies such as direct subsidies to producers or export subsidies in industrialised countries. If, additionally, poor developing countries will be given the opportunity of preferential access to markets in rich and emerging nations, support to promote their trade and export infrastructure and institutions, and time-limited transfers to deal with the adjustment costs of rising food prices for food importers, all countries of the world would benefit from a successful conclusion of the Doha round.

The revival of the Doha Round will not be the magic pill to end global recession. However, monetary policy alone cannot bring back confidence to investors. The effectiveness of fiscal stimuli, while needed, might also be limited. A quick success of the Doha Round could thus be an important integral part of fostering investor confidence. Confidence in the real sector of the economy will emerge; but particularly confidence that spirals of regulations, spreading from the financial to the real sector will not occur. At the same time, government action would also instill confidence in the ability of political actors to work together in reducing the impact of a global slowdown and in demonstrating the ability of the world political community to see this crisis as an opportunity to look beyond short-sighted interests to lock in long-lasting benefits to the world economy."

I couldn't agree more. Please read it.

Free Exchange earlier endorsed this as well:

"World leaders should seize the moment and "buy" these options now by finishing the Doha Round negotiations. This would send a great positive signal that they are aware that coordinated action is needed on the current account as well as the capital account."