A Great Unpopular Idea.(Business)(free trade, Doha Development Agenda )

The Doha plan isn't sexy, but it's the smartest answer to global problems.

In the United States, presidential candidate Barack Obama has been quoted as saying that a commitment to free trade is not in the interests of working Americans. In Europe, French politicians are using the food crisis to push for greater protectionism. In Asia, tens of thousands of South Koreans protest against beef imports from the United States.

Yet if the world could do one thing right now that would help combat almost every one of its biggest problems, it would be to establish significantly freer trade. Easing restrictions on trade would improve education and health conditions, make the poorest people on earth richer and give us all more money to tackle costly challenges like global warming. Yet recent polls show public sentiment in the United States and Europe turning sharply against globalization, the Doha round of international trade talks is stalled, protectionist rhetoric is rising and many countries are building bigger trade barriers.

Passing the World Trade Organization's Doha Development Agenda would be an astonishingly cheap way to reap the benefits of more free trade. At the Copenhagen Consensus project, we gather some of the world's leading economists in an effort to decide how to do the most good for the most people at the lowest possible cost. The world's resources are limited, so choices have to be made about how to invest: Into reducing malnourishment? Combating climate change? Improving education? This year the panel--including five Nobel laureates--concluded that the second most efficient action the planet could take (after providing malnourished children with vitamins) would be to complete the Doha round.

It based its conclusions on new research for the Copenhagen Consensus project, including some by World Bank economist Kym Anderson. Anderson examined different econometric modeling scenarios, and calculated the realistic costs and benefits of completing the Doha talks. He concluded that if developing countries cut their tariffs by the same proportion as high-income countries, and services and investment were also liberalized, the global annual gains could climb as high as $120 billion by 2015, with $17 billion going to the world's poorest countries.

Over the long term, richer countries would invest more and grow even faster, and thus the benefits would grow very large toward the end of the century. Recast as a steady annual benefit, a positive Doha outcome could increase global income by more than $3 trillion per year, four fifths of which would go to today's developing countries.

The experiences of successful reformers like South Korea, China, India and Chile suggest that trade liberalization immediately boosts annual economic-growth rates by several percentage points for ...