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The Doha Round of negotiations hit yet another standstill this summer. But according to Daniel Ikenson, associated director of the Center for Trade Policy Studies at the Cato Institute in
But the latest setback could be the catalyst for further reforms and greater trade flows.
Since 2001 as negotiators have continuously toiled over negotiations, trade flows have actually increased by 70% and the global economy grew by 30% in real terms to $55 trillion, Ikenson says.
"Much of that growth can be attributed to the emergence of previously-slumbering economies, many of which were energized by domestic reforms, including tariff reductions and improvements to customs and other border clearance procedures," he adds. Economists at the World Bank believe these "trade facilitation" reforms could yield greater gains than further tariff liberalization would.
Ikenson says in the end domestic reforms offer the greatest potential to increase trade. "In a globalized economy characterized by transnational production processes and just in time supply chains, where countries are competing for investment and talent as much as they are for markets, there is little choice but to liberalize. Remove the pretense of reciprocity and the liberalization will continue," he states.