The World Trade Organization reminds us that it is indeed good for something:
Ministers from around the world sealed the first global trade deal in a generation on Saturday in a move hailed as a tonic for both the global economy and the battered credibility of the World Trade Organisation.
Almost two decades after the WTO was founded ministers from its 159 member countries approved a “trade facilitation” agreement to set common customs standards and ease the flow of goods through borders around the world. They also took decisions on a range of issues from how the WTO should respond to government food security programmes to securing better market access to the rich world for the globe’s least developed economies.
Business groups immediately praised the trade facilitation deal as a needed stimulus for the global economy. The International Chamber of Commerce estimates it will lower the cost of doing trade by as much as 10-15 per cent and add $1tn to global output.
As the story indicates, it will take “years” for the economic effects of the deal to be felt, but at least we have a deal, and it seems to be a good one. For years, international trade talks have been gridlocked and the effects of the world economy have been less than desirable. As I have often written, while there is no silver bullet to economic growth, trade represents one of the closest things there is to a wonder drug for the international economy. Needless to say, more such agreements would be desirable. Dare we hope that we might see some progress in the Doha Round sometime soon?