An open international trade system is the backbone of the global economy. Vigorous trade has been the instrument of international prosperity in the past half-century. The secret of the trading order's success has been its continual expansion in terms of members (the number of nations) and reach (such as products and services subject to its rules). Yet despite its impressive record during the last 50 years, the international trade regime is under threat as perhaps never before. The culprit is politics.
Although the global economy has surmounted its worst crisis since the Great Depression, the effects of the scare are lingering. Smaller nations question the wisdom of their commitment to free trade. Yet, instead of finding leadership and reassurances about staying the course, they see the United States, Europe and Japan embroiled in trade disputes over items ranging from airplanes to wool sweaters. Looking elsewhere, the World Trade Organization, the institution created to oversee the trade system and smooth out any wrinkles, is without a director general at this critical juncture. Worse, selection of the new head is creating yet more friction and encouraging doubts about the fairness of the entire trade framework.
The interplay of all those issues has been visible lately. Last week, the four biggest members of the world trade system -- Japan, the U.S., the EU and Canada -- met in Tokyo for their 32nd "quadrilateral" meeting. The two-day ministerial was notable for how little it produced. Participants agreed that China should join the WTO, that the next round of world trade talks should be completed in three years and that it should cover a wide range of sectors. Real progress on any of those issues, as well as the matter of the WTO head, was lacking.