Over at Reason Online, Bjorn Lomborg is inviting readers to rank which policy options they believe would people around the world the most. One of the 10 policy areas Lomborg covers is free trade, where one policy option he considers is completion of the Doha Development Round of trade talks:
Free trade would lead to an overwhelming boost to welfare everywhere, especially in the developing world. Grasping these benefits is potentially one of this generation’s greatest challenges.
The greatest hope is getting the Doha round back on track.
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 be as high as $120 billion, with $17 billion going to the world’s poorest countries.
The long-term impact of free trade is huge. Recast after calculating the net present value of the stream of future benefits, a realistic Doha outcome could increase global income by more than $3,000 billion per year, $2,500 billion of which would go to today’s developing countries.
In addition, the experiences of successful reformers like Korea, China, India, and Chile suggest that trade liberalization immediately boosts annual economic growth rates by several percentage points for many years.
There would, of course, be costs. In addition to social costs, firms and workers would need to adjust as reform forces some industries to downsize or close and allows others to expand. Yet the benefits of a successful Doha round are around a staggering 1,027 times higher than these costs.