The failure of the Doha Trade Round could be a harbinger of things to come, at a time when the deepening financial crisis puts tremendous strain on governments’ ability to play by the rules. Benefits of free trade have been hailed against the backdrop of increasingly global markets. But free trade has to be fair and complemented by an international regime that helps poor countries develop. Increasingly unequal incomes in wealthy economies and their fear of the rising power of some emerging economies are triggering bouts of protectionism. Likewise, the struggle to control exhaustible resources and obtain basic commodities at affordable prices raises the propensity to restrict trade in many countries.

One needs to mention here the increasingly complicated nature of geopolitics. The EU has to take the lead in mitigating the fallout from the current crises, in terms of preventing a collapse, de facto, of the multilateral trade and financial system. This lead includes, among other things, a reform of the IFIs, involving the emerging global powers (BRICS) in dealing with global economic issues and a reform of the international architecture regulating the flow of finance. At end of the 19th century an international system that promoted free movement of goods and capital broke down and was followed by a devastating war in Europe. We should remember this.