Design for TradingIssue: Winter 2003-2004
The effective collapse of the Doha round of trade talks in Cancun in September has left the world trade scene in chaos, with an increase in protectionism likely. Free trade, beloved by economists, has only a modest worldwide political constituency, and severe practical defects in a world of floating exchange rates. And the world is turning toward the worst kind of protectionism. Instead of mere tariffs that are at least quantifiable, regulatable and revenue-producing, the world is adopting subsidies, quotas and non-tariff barriers, all less transparent and all more distorting of trade flows. The current world trade regulation system is thus both dangerous and unsatisfactory.