Analysis  

Rescuing Free Trade from the Bureaucrats & Special Interests

by Fred Smith

Holy Cobden! It's the 21st century and we're still debating free trade!?!

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In the aftermath of the collapse of the free trade talks in Cancun, European Union trade negotiator Pascal Lamy noted: "We would have all gained from an agreement. Now we all lose." He went on to state that he would not "play the blame game." But, of course, others soon did and, in truth, there was plenty of blame to go around. The anti-globalization forces, who rioted in Seattle a few years earlier, deserve a portion of the blame — they were elated that once again they had played their part in derailing any move toward global trade liberalization. American and EU economic protectionists were also pleased — as the talks collapsed, one whispered to me, "There is indeed a God in heaven!" U.S. Trade Representative Robert Zoellick was irate, blaming the G-21 (a recently formed group of developing-world nations led in part by India and Brazil) for posturing rather than negotiating. And certainly the developing world showed no eagerness to dismantle its own trade barriers. The U.S. position was that the Cancun collapse reflected a "failure of will."

The collapse could more accurately be described as a failure of political entrepreneurship. Free trade creates massive benefits — that the political process seems incapable of crafting a means of realizing these benefits suggests lack of creativity, not lack of will.

But Cancun remains a tragedy. The failure to make progress suggests continued sluggishness in economic liberalization throughout the world. Now, the creative winds of change will blow more slowly through the corrupt and inefficient economies of the world. Expanded trade would have triggered that scouring storm and done much to give hope to the peoples of the developing world. Still, no one should have been surprised by this collapse. For the last decade or so, the World Trade Organization (WTO) has added members, expanded its agenda, and pursued complex trade-expanding programs via endless negotiations.

Cancun participants, in keeping with most trade negotiation strategies of the last decade, gave lip service to the value of free trade in advancing consumer welfare. However, the actual negotiations focused on producer concerns. Each nation sought to balance the fears of those businesses that might lose out to foreign imports and the hopes of those producers eager to export abroad. Yet, the governments made no real effort to clarify the impact of liberalized trade on consumers, no real effort to explain that agricultural subsidies benefit the few at the expense of the many. That failure made it all too easy for anti-globalists to argue that trade destroyed the livelihoods of the poor of the world, that it merely enriched multinational corporations. Non-governmental organizations (NGOs) joined traditional economic protectionists in arguing for "fair" rather than "free" trade. With no one making the moral case for trade, many came to view trade policy as another zero-sum game — gains to some nations would be offset with losses to others. That framing made collapse all but inevitable.

The collapse was a serious setback to all those who had hoped for a more liberalized global economy. Still, the outcome may not be altogether a bad thing. The current approach to opening the world economy has many problems. If this failure leads to a more politically effective free trade strategy, the results may yet be positive. However, this will require that free trade advocates find ways to build political coalitions favoring trade liberalization in both the developed and the developing world. The indirect mercantilist approach that has long dominated thinking in this area must be abandoned.

The Cancun failure was not unexpected. At Seattle in 1999, the developing world had blocked efforts by the EU and the United States to link trade and the environment. Developing nations saw linkage (making trade conditional on environmental, labor, human rights, and religious rules) as nothing more than an attempt to subject their nations to the same crippling regulations that the wealthy nations had adopted. Many hoped the United States under the Bush administration, supposedly more sympathetic to free trade and less beholden to labor and environmental interests, would champion liberalized trade. At Doha in 2001, the U.S. had seemingly moved in this direction, agreeing to changes in Trade-Related Aspects of Intellectual Property Rights (TRIPS).

More importantly, at the September 2002 Earth Summit in Johannesburg, South Africa, the United States had allied itself with the developing world against the vested interests of the EU-NGO alliance. Earlier Earth Summit conferences had been totally dominated by Malthusian environmentalists seeing economic development as a threat to our planet. Environmentalists sought to restrict trade via such policies as "sustainable development" (Don't use resources!) and the precautionary principle (And don't seek to develop technological alternatives, either!). Those in the developing world recognized that these policies would slow or even stop economic development, relegating their nations to perpetual poverty. In contrast, at the Johannesburg Earth Summit, the U.S. joined with the developing world in championing economic and technological development. The message of this conference was that poverty was the greatest source of pollution, that only economic and technological growth could advance both human welfare and environmental protection at the same time.

Yet, as Cancun approached, the United States seemed to move away from this most-hopeful alliance. In an effort to eliminate U.S. and EU agricultural subsidies (an issue that has been blocking trade liberalization for decades), the U.S. formed an alliance with the EU. That alliance stemmed from pledges that the wealthier nations would dismantle their agricultural subsidy programs (total agriculture subsidies by the U.S. and the EU are estimated at over $300 billion annually — the subsidy to a cow per year in Europe exceeds the annual per capita income of many poorer nations!). Such an alliance could be justified as necessary to persuade the EU to be more flexible; instead, it seemed to make the U.S. less so. Certainly, the commitments by the U.S. and the EU noted in the agreement were vague; the timing of when we would actually discontinue agricultural subsidies was even more so. Moreover, that pledge (weak as it was) was still conditioned on the poorer nations of the world moving simultaneously to eliminate their own trade barriers. This "reciprocity" demand seemed to many developing-world leaders a betrayal of the earlier U.S. position. "Trade — Not Aid" was replaced by "Trade — once you've taken brave actions that we've not yet taken!"

Of course, trade barriers in the developing world are high. Indeed, because most trade takes place between neighbors, the intra-developing world trade barriers impose greater costs on the poor of the world than do the protectionist practices of the developed world.

Disappointed at these developments and frustrated by the slow progress in fleshing out the details of the pending Doha agreements (numerous deadlines to finalize details on agricultural and other aspects of the trade deal were routinely missed in the months leading up to Cancun), developing-world negotiators created the G-20+ (an ad hoc alliance of 20 or so developing-world nations). That group largely supplanted the Cairns Group (a group led by Australia and other second-tier nations) and pushed vigorously for the U.S. and the EU to do what they'd long promised: abandon their agricultural subsidy programs. The wealthy nations, they suggested, should move first in the elimination of trade barriers. Of course, G-20+ leaders were fearful of exposing their fragile economies to the fierce competitive winds that trade liberalization would entail; moreover, they were skeptical that Europe and the United States would actually repeal agricultural subsidies. Then, the EU negotiators insisted that the WTO commit itself to serious consideration of the "Singapore issues," a complex set of trade-related agreements that had received little serious attention at earlier sessions. Many developing-world nations felt they lacked the capacity to deal with some of these topics (expertise on investment and competition rules, two of the Singapore items, is not widespread). The G-20+ said no; the EU suggested a compromise. And then Korea and Japan, nations most protective of their agricultural interests, moved to block any "compromise," a few African nations walked out (WTO agreements require "consensus"), and the talks collapsed. When Conference Chairman Luis Ernesto Derbez of Mexico gaveled the Cancun session to a close on September 14, many in attendance were shocked and depressed. To have come so close to a serious discussion of how to dismantle the primary barrier to trade liberalization — the agricultural subsidy issue — and then to fail was depressing.

The Paradox of Trade Policy

After the disasters of the Depression era and the horrors of World War II, world leaders almost universally sought expanded economic linkages via trade. Cordell Hull's view that "Free trade was God's diplomacy" motivated the original negotiators of what was to become the International Trade Organization (a group much like the current WTO), but almost everyone accepted the classical liberal view that trade was a positive sum game — benefiting both consumers and producers. The challenge was to find some institutional framework within which the various political obstacles (specifically the major tariffs which limited trade) might be eliminated. The first effort was proposed the ITO. However, that institution (unlike the World Bank and the IMF, the other two global economic organizations created at the same time) was opposed by the United States (several senators felt that it compromised U.S. sovereignty). As a result, the negotiating arrangements which had been set up as an interim measure, the General Agreement on Tariffs and Trade (GATT), became the institution within which broad-based trade agreements would be arranged. GATT, on paper a much weaker organization, was a great success. Yet, that success was somewhat paradoxical.

The strategy employed by GATT negotiators (and since 1995 by WTO negotiators) proceeded along mercantilist rather than free trade lines. Trade negotiators focused on expanding exports (gaining "market access" for their exporters). They were reluctant to reduce their own trade barriers, doing so only as necessary to persuade other nations to make "concessions" (allowing their consumers to purchase imports). Note the confused language of trade negotiations. Trade is voluntary exchange. By its nature, it is beneficial to both parties so there is no reason for seeking "concessions" or for demanding that our trading partners open their markets to our goods before we open our markets to their goods. A "concession" after all merely reduces a penalty placed on one's own consumers. "Market access" merely expands the choices available to one's own consumers. But the trade establishment uses these terms and thus acts as if trade is a zero- or even negative-sum game.

One implication of the GATT-WTO focus on producer interests is the complexity of trade agreements. The business community demands highly specialized rules to ensure its competitiveness in export markets, while seeking equally complex rules to limit foreign competition. Trade agreements are thus highly complex rule books taking up hundreds or even thousands of pages. Free trade is simple: all that is needed is to abolish tariffs and other import restrictions. Fair trade is complicated: it requires convoluted regulations detailing the complex deals that carefully balance an interest group in one nation against that of another. There is little room for principled argumentation in mercantilist agreements. Moreover, in this interest group political framework, it became increasingly difficult to block other interest groups from joining the game. As NGOs became more powerful, they argued (with some justification) that if business representatives were afforded special privileges in these trade negotiations, then NGO representatives also should be allowed a voice and a vote. Lori Wallach, an anti-globalization activist and Naderite, argued this in her book "Whose Trade Organization." Of course, adding more special interests to the trade negotiation process makes progress even less likely.

Despite these inherent contradictions, this indirect approach to free trade worked during GATT's first several decades. Global trade grew rapidly. The broad gains from generalized reductions in trade barriers (mostly tariffs) overcame domestic oppositions in most areas. But GATT's success owed less to the acumen of the early trade negotiators than to the mood of the times. GATT was created along with an array of other international organizations in the aftermath of World War II. At that time, both the general public and most of the intellectual elite saw protectionism, as exemplified in the trade wars of the interregnum between the world wars, as having exacerbated, and perhaps even caused, both the Great Depression and World War II. The result was a widespread agreement with the sentiment that "if goods don't cross national boundaries, armies soon will!"

The free trade mantra had considerable power. But the GATT framework was weak. GATT was little more than an organizational setting in which various governments could systematically explore trade liberalization agreements — and obtain opinions as to whether some action might violate agreements already reached. In its early years, special interests tended to neglect it. The gains available from defending or extending tariffs weren't very substantial, so most inefficient domestic firms simply ignored trade policy and focused their energy on getting direct subsidies. In the early post-WWII era, the relatively small scale of global trade created only minor dislocations in domestic markets. Capital, labor, and ideas moved more slowly in those early years. Moreover, in the immediate post-war era, the demands for consumer goods were so large compared to the productive capacity of a war-devastated world that few nations faced any real problems in selling whatever they could make. As a result, the world experienced a massive expansion of global trade along with a general reduction of tariffs. Unfortunately, as global competition became a reality and trade became an ever more significant element in domestic economies, vulnerable sectors of the economy began to pay more attention to trade policy. Growing protectionist pressures at home encouraged our trade negotiators to seek ever greater concessions from our trading partners abroad to build domestic support for trade liberalization and, thus, offset domestic protectionists.

Protectionist rhetoric still played badly in the policy arena, so protectionists sought new rhetoric and new tools. The older protectionist device, the tariff, gave way to non-tariff barriers (NTBs) based on safety, environmental, or health arguments. Free trade remained the ideal, but increasingly arguments were heard that trade liberalization should not be allowed to harm other key societal values. Exacerbating this trend was the shift, fully effected by 1995, from the relatively weak GATT to the relatively stronger WTO. Both the GATT and the WTO are mercantilist in structure, but the WTO created more powerful means of enforcing agreements and thus became a more attractive target for protectionist interests. Gradually the logical clarity of free trade rhetoric faded, replaced by the murky, egalitarian language of fair trade. Protectionists, seeking to disguise their special-interest agenda, advanced arguments for restricting trade based on a wide array of populist concerns — safety, national security, preservation of cultural character, religious freedom, child labor, women's rights, the family farm, and environmental protection. Efforts by protectionists to strengthen their case led them to seek out ideological groups associated with these values. These groups, now known as NGOs, were more effective in promoting non-tariff trade barriers. They have become a dominant force in the trade debate. Their ability to cloak protectionist policies in moral terms subverts popular support for free trade.

As the scope and scale of international organizations and interest areas expanded, other global conferences and treaties grew in importance. In the economic sphere, trade treaties remained dominant but other agreements began to force their way into the policy debate. In the last few decades, governments have negotiated treaties supporting human rights, religious liberty, and a host of other values. The most significant of these are the multilateral environmental agreements (MEAs). These treaties see trade as a threat to the environment and seek to force "better" environmental regulations on backward nations. For example, the Convention on International Trade in Endangered Species (CITES) seeks to reduce trade in endangered animals (such as elephants). The environment, it was argued, required that we suppress trade. That the economic values associated with these species (as collector species, for hunting purposes, and as non-traditional medicines) might encourage the protection of these species (presuming always that they were managed as private property) received little consideration.

The trade agenda was expanded in other areas by incorporating the TRIPS provisions into the WTO. There is, of course, a clear need to ensure continued economic rewards for innovation. Intellectual property rules (trademarks, patents, and copyrights) have a long-established role in ensuring that innovators are compensated. Yet the inclusion of TRIPS into the WTO framework transformed a mutually advantageous agreement into an agreement that benefited only the wealthier nations. Few IP rights are held by citizens or firms in the developing world. For people in less developed nations, TRIPS meant (at least for the near future) a loss with no offsetting gains. The TRIPS agreement might better have been arranged outside the WTO framework. Moreover, the introduction of TRIPS encouraged other interest groups with even more one-sided agendas to push for the incorporation of their agendas into the WTO framework. Environmentalists and labor advocates could now reasonably argue that if owners of intellectual property were entitled to use the trade process to advance their concerns, then environmentalists ought to be allowed to do the same.

This was tragic because today environmental thinking remains largely Malthusian — too many people consume too many resources. So environmentalists have favored policies restricting trade and innovation (and population growth, of course). Trade protectionism is an ideal way of suppressing growth. And CITES ushered in a host of MEAs — the Basel Treaty limiting trade in hazardous materials, the Persistent Organic Pollutants (POPS) treaty regulating trade in certain chemicals, the Prior Informed Consent (PIC) treaty demanding prior approval of trade in any good that might entail risks, the Montreal Treaty limiting CFCs in order to reduce alleged threats to the stratospheric ozone layer, the Biodiversity Treaty threatening mining and other economic developments, and, of course, the Kyoto Treaty, which would curtail energy use around the world. These treaties were negotiated, signed, and ratified by different coalitions of interest groups but proceeded on a parallel track to trade negotiations.

The goal was to export "good" environmental policies from America and the EU to the world by defining acceptable production methods. Often these environmental treaties included trade sanctions as a means of enforcement. Such provisions were in conflict with the GATT-WTO rules, which limited trade restriction to the finished product being traded. Nation-states, under trade laws, were sovereign — each nation would decide its own environmental, health, safety, and labor rules. Trade rules could be foolish, but they must be based on the product's characteristics — not the production or process method (PPM) used to bring it to market. This PPM rule meant that a product arrived as it was — its upstream history was irrelevant to trade policy.

The growth of NGO-endorsed treaties meant that the two streams of international policy were on conflicting paths. Trade policy respected national sovereignty; environmental and social policies sought to weaken sovereignty by harmonizing global societal rules, to force "good rules" on the backward governments of the world. Many of these non-trade related treaties were viewed by many nations as mere verbiage. Human rights treaties were routinely signed by dictators; treaties guaranteeing the rights of women were signed by theocratic patriarchies. Of course, treaties are not actually "signed" by a nation — some individual or group of individuals negotiates for that nation. Those responsible for trade policy tend to be fairly influential; trade policy is important and, thus, some importance is given to the question of who would best represent the nation. Non-trade treaties seem far less significant to most countries and, thus, the individuals assigned the negotiating task may well have little knowledge or interest in how that treaty might affect their nation's overall welfare. The Basel Treaty, for example, threatens trade in scrap materials. Copper scrap plays an important role in the Chilean metals sector and the treaty is harmful to Chile's economy; yet, Chile, or rather the Chilean health minister, signed the Basel accord. Only after the fact did the Chilean trade and industry ministries realize the problem.

The failure of trade advocates to advance policy on pro-consumer, egalitarian grounds became more serious over time. Trade policy became increasingly identified as "mere" economic policy. The non-trade agreements were the "moral" areas where idealistic groups and crusading national bureaucracies could demand a more just and egalitarian world. This problem intensified with the end of the Cold War. During the Cold War, these aspirations were disciplined by the realpolitik fact that any effort to curtail trade with a nation might well result in that nation's joining the Soviet camp. That discipline disappeared when the Cold War ended. With national security supposedly assured, these other agendas became more powerful and the will to resist them weakened. Utopian treaties such as the International Criminal Court (to rid the world of the brutality of war) and the Commission to Eliminate all forms of Discrimination Against Women (CEDAW) proliferated. During the Cold War, trade had often been curtailed because of national security policy. That precedent made it easier to advocate trade sanctions to advance other moral agendas. The fact that limiting trade to those nations able to meet the criteria established by the various utopian groups dominating the NGO world would mean no trade at all seems to have received too little consideration.

Of course, the moral and practical reasons for free trade still exist. Most Americans still believe in the freedom of individuals to enter into those voluntary exchanges they believe would benefit them. Liberalized trade still increases wealth, and only global trade offers any hope of alleviating world poverty. But trade negotiations were handled by pragmatic bureaucrats who gave little weight or thought to such arguments. Ceding the moral voice to non-trade areas has caused many to view trade as inherently amoral. Fair trade became free trade with a human face!

After the Fall: Alternative Paths for Trade Policy after Cancun

In the aftermath of Cancun, the various parties have seen different problems and different solutions. U.S. Trade Representative Robert Zoellick sees Cancun as a failure of political will; he specifically blames the leaders of the developing world for political posturing rather than engaging in serious negotiations. It was their failure, he believes, to challenge their protected domestic interests, to seek realistic solutions to the transitional difficulties of trade liberalization, that led to the Cancun collapse. There is some truth in this. But it can better be argued that the failure of free trade policies at Cancun reflected more a failure of political entrepreneurship by all world leaders. The simple fact is that there has been little effort by any trade leader to mobilize the pro-trade constituencies at home and abroad that are essential if trade liberalization is ever to become a reality.

Still, there are some signs that nations are reappraising the "you first" strategy that derailed Cancun. Soon after Cancun, the G-20+ alliance dissolved and some called for a quick resumption of talks, hoping that emphasis might again be placed on dismantling EU and U.S. agricultural subsidies. There was also a greater willingness to discuss steps toward reducing developing-world trade barriers. Unfortunately, with the proximity of presidential elections in the U.S. (and the growing support for protectionism among leading Democratic candidates), there is little enthusiasm in America for any early resumption of negotiations.

For the moment the U.S., the EU, and various Asian nations seem content to neglect multilateral trade arrangements such as the WTO. These nations are now focusing on bilateral and regional trade arrangements. However, this approach is risky. As noted, trade policy is determined by those interest groups involved. The outcome varies depending upon the participants. WTO-style multilateral agreements attract a broad array of interest groups, increasing the likelihood that the results will consider the public interest. In contrast, bilateral agreements attract a narrower spectrum of interest groups. In the economic sphere, only those economic interests involved in the specialized trade in that arena are likely to participate. Thus the economic perspective is more likely to be tactical, not strategic. In contrast, the NGOs seek precedents; their perspective remains strategic.

In Seattle, efforts by powerful NGOs to mandate labor and environmental linkage — that is, to subordinate trade policy to environmental or labor rules — failed. After Seattle, however, the Bush administration sought Trade Promotion Authority (TPA), an arrangement whereby the ability of Congress to block trade agreements is weakened. To garner support for TPA, the Bush administration increased the power of labor and environmental groups. That result, coupled with the narrow interest representation at bilateral trade talks meant that the Jordanian, Singaporean, and Chilean "free trade" agreements included provisions that would have been rejected in Seattle. The environmental section of the Chilean Free Trade Agreement, for example, holds Chile responsible for enforcing its environmental rules. But does this mean that Chile will be held accountable if it fails to adopt U.S.-style enforcement practices? Will Chile face U.S.-style environmental litigation? Bilateral agreements of this sort pose great dangers for all developing economies. Note that at Doha, efforts again to link trade with labor and environmental policy were blocked. Bilaterals and regionals are far more likely to attract and permit special interest arrangements than multilateral trade agreements. Moreover, only multilateral agreements are ever likely to address the major agricultural subsidy problem which is now blocking all progress.

Can Free Trade Prevail?

The producer-focused approach to free trade has failed. To address non-tariff barriers, overcome the powerful protectionist interests that still exist in every nation in the world, and eliminate agricultural and other subsidies that distort global trade, a more effective approach is required.

We must find ways of raising the saliency of consumer gains that trade liberalization would achieve. First and foremost, we must clarify the egalitarian case for free trade. Macroeconomic arguments for trade are too easily defeated by countervailing arguments that focus on the "orphans and widows" left destitute as jobs flee abroad. Yet, jobs lost abroad are likely to be replaced by jobs created by expanded imports, by reduced tax burdens and by expanded exports. Trade is everywhere correlated with improved standards of living. Legitimizing the creative destruction of the market is nowhere more difficult, or more important, than in the area of trade.

Trade advocates might take a lesson from Clayton Yeutter who, as Secretary of Agriculture on a trade-related visit to Europe, spoke directly to European consumers. He noted the burden that the EU agricultural subsidies imposed on the European family. Reaching over the heads of the EU politicians in this way was heavily criticized, but it offers a model for a renewed trade debate. Developing pro-consumer arguments for trade — and then devising a communication strategy to ensure that these arguments are heard in the policy debate — is the major task the pro-trade community should undertake. Developing this pro-consumer voice in the developing world and ensuring that this voice is heard in the wealthier nations of the world is even more important.

Free traders have accepted too quickly the conventional political argument that consumer interests will always be trumped by producer interests. The Left has never accepted that moral arguments cannot prevail over economic arguments. And the growing power of NGOs indicates that non-economic interests may well be more powerful in many global arenas. Moreover, the cost of mobilizing diffuse interests has dropped (and is dropping) as the costs of communication decline.

Rather than simply mobilizing export-oriented producers to offset import-fearing producers, we should encourage producers to mobilize consumers (at home and abroad) who will benefit from trade liberalization! U.S. agricultural interests, for example, should finance ad campaigns aimed at European consumers. Campaigns pointing out the reduced tax burden that would follow the elimination of agricultural subsidies might change the European political landscape. Polling data already suggests that younger voters oppose protectionist agricultural policies; a vigorous campaign might well make those attitudes more politically effective.

But American and European voters are also moved by the plight of the poor of the world. The response to the AIDS epidemic makes this point clear. If the pro-trade business community would reach out to groups able to link free trade to the plight of the poorer peoples of the world — African, Asian, and Latin American — the case for free trade would become far easier. To date, only the anti-globalization NGOs have employed this strategy. But their message — while emotionally effective — is ridiculous. Does anyone really believe that creating greater opportunities in the developing world — increasing access to potable water, modern medicines, electricity, and transportation — constitutes a threat to the poor? Third World faces on billboards throughout Europe and the United States asking for the opportunity to escape poverty through trade would go far toward weakening the power of domestic protectionist forces. Producers should work with foreign consumer groups to explain the benefits of trade — and then ensure that this message becomes part of the policy debate.

The anti-trade NGO moral voice has been very effective at undermining support for economic liberalization. At Seattle and Doha, anti-trade NGOs failed to subordinate trade to their utopian agenda, but they did succeed in portraying themselves as the moral voice of the developing world. That situation changed in Johannesburg as newly formed pro-market and pro-technology groups joined with free trade groups in the United States to champion economic and technological growth and free trade. But much more needs to be done in this area. Poorer nations seem aware that their future depends upon expanding global trade, but they have not found their "voice," a way to articulate those hopes in ways that would effectively challenge the anti-trade NGO position. Yet, at Johannesburg last year, the message that poverty was the most significant cause of environmental degradation came across loud and clear. The cry was "Trade — Not Aid!"

In Cancun, the re-emergence of the U.S.-EU alliance and the creation in turn of the G-20+ set back this process. But an alliance for economic liberalism remains viable and must yet emerge. A breakthrough uniting U.S. free traders with those in the developing world to undermine the political strength of protectionists is overdue.

Trade Policy Must Return to Its Principled Roots

The mercantilists' approach to expanding trade worked fairly well in the early post-war era, but it is failing today. We need to revamp the trade debate, revalidating the once well-understood principle that trade is mutually advantageous, that trade makes it possible (and, indeed, requires) that people of different faiths, colors, nationalities, and beliefs work together to advance their mutual interests. The highest priority of the WTO should be to clarify the moral case for expanding trade. The linkage arguments should be challenged, not accommodated. Trade is a complex process in its own right — the first step toward a better world. To hold trade hostage to other values is to run the risk that these first steps will never be taken, that there will never be a window opening onto a freer, richer, fairer world.

Pascal Lamy and Robert Zoellick are undoubtedly highly accomplished trade negotiators. They probably do believe that trade liberalization is a good thing and fight to the best of their abilities to advance it. But like so many intellectuals, they despair of ever making rational policies politically viable. Adam Smith, after all, in the "Wealth of Nations" doubted that free trade could ever prevail in the political world. Lamy and Zoellick are in good company.

But, history suggests that they, and Adam Smith, for that matter, are wrong. In the mid-19th century, two British businessmen, Richard Cobden and John Bright, recognized the tremendous gains possible through trade liberalization and, being entrepreneurs themselves, went about organizing a campaign to persuade the British citizenry of that fact. They pamphleteered, organized speeches and rallies, petitioned Parliament, and worked generally to strengthen the pro-trade constituency. They used the skills they had honed as successful businessmen to market free trade — and they succeeded. The Corn Laws were repealed and Britain enjoyed an era of great economic prosperity.

Zoellick and Lamy are excellent representatives of the types of intellectuals who staff the national and global bureaucracies that have evolved over the last several centuries. Though neither is a businessman, they are well connected to the business leaders in their respective spheres. Could they not challenge the pro-trade business community to take on the task outlined in this article — to seek out and amplify the pro-trade consumer voice, both at home and abroad?

Free trade advocates in the developed world must join with the pro-trade forces in the developing world. The hour is late — but the Cancun failures have clarified the need for a new approach. Trade remains the best hope of the unfortunate of the world. They — and we — should fight for its expansion.

© Copyright 2008, Liberty Foundation

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