Doha: The Low Hanging Fruit

OECD

The Secretary General of the OECD, Angel Gurría, discusses the failure of the Doha Development Round talks in this open letter. The Doha round was primarily focused on reducing tariffs worldwide but collapsed when the developed world appeared unwilling to make any appreciable concessions.

The OECD has estimated the gains resulting from free trade of services and goods at $600 billion. Gurría calls upon the developed world to "show leadership and start putting into practice the recommendations that emerge from their own discussions." He asserts that agricultural subsidies are an economically inefficient way to ensure the livelihood of local farmers and protecting the environment. Meanwhile he calls upon the leaders of the developing world to sell the benefits of free-trade policies to voters. Gurría also suggests that they focus on infrastructure development and which would facilitate easier export of their goods.

Questions

1. If the benefits of trade are estimated at $500 billion why are nations so unwilling to engage in free trade? Is there something greater than money at stake?

2. What role can (or should) multilateral institutions play in assisting the developed and the developing world reach a compromise in this regard?