THE Doha Round has spent so long in the World Trade Organisation’s intensive care unit that when Pascal Lamy, the WTO’s Director-General, reluctantly switched off the life support last week, most of the family reacted much as did Lord Melbourne to the death of his wife: “Remorse, regret, relief.” With the patient deep in coma, there seemed little point in dragging out the end. Better to leave the question of life or death in the lap of the gods and prepare to carve up the estate.

Doha has been left to die because the United States believes that its potential to enlarge markets is too modest to justify further compromise, because the European Union is in deeply defensive mode and, perhaps above all, because too many governments think that Doha does not really matter.

It is widely believed that the multilateral trading system is healthy enough to absorb the shock of this singular political failure.

Since 1948, eight previous rounds have dramatically reduced barriers to trade and these gains are safely banked. Most countries are converts to open markets; many have been cutting tariffs without waiting for the WTO. In an increasingly globalised economy, trade continues to fuel world growth. Since the WTO took over from the Gatt in 1995, a robust system has existed for resolving trade disputes. Finally, the big players have, through regional or bilateral deals, found other ways to open markets.

These hypotheses are not only optimistic, they are untested. Trade rounds have stalled many times, but never totally broken down. When free trade’s heartless relatives digest Doha’s last will and testament, they will find it contains euthanasia clauses. They may realise that they may end up worse off if they refuse to make a last, concerted effort at a cure.

The estate is vulnerable to multiple challenges. Take those regional and bilateral “free-trade” agreements, for a start — nearly 200 to date. They are inherently discriminatory, penalising countries with limited bargaining power and leaving out in the cold the poorest — the very countries that Doha was designed to help. They produce a tangle of conflicting rules. These complicate life for traders and companies that operate in multiple jurisdictions and pile up the costs of doing business, often without doing much to open markets.

Secondly, a long list of trade disputes has been kept in the pending tray by the expectation that the rules would soon change. If negotiations fail, M Lamy said last week, “litigation will fill the gap”. It would be satisfying to see America and Europe, deprived of the protection of the agricultural “peace clause” that they obtained in the Uruguay round, subjected to vast fines. But an enfeebled WTO might not be able to take the strain. Its effectiveness critically depends on the faith of all its 149 members in its ability to deliver concrete benefits. If the WTO ceased to matter as a negotiating forum, countries would be less inclined to respect its rulings.

If ever there were a case of the battle being lost for want of a horseshoe nail, this is it. The proximate, though not only, cause of breakdown is the refusal of the US and the EU to open up the blocked arteries of agricultural trade. The rich world’s farm tariffs and subsidies are an indefensible folly. They cost their own taxpayers and consumers nearly $250 billion (£134 billion), while depriving developing countries’ exporters of about $75 billion a year. The case for reform was conceded, in principle, years ago. The farm dossier is the deal-breaker because it is the acid test of Western commitment to the multilateral trading system. The truth is that in economic terms, this is not a big deal. Agriculture’s share in world trade, as the chart shows, has fallen steadily since the 1950s to less than 9 per cent overall and a mere 3 per cent in the EU. The costs of a deal are nothing compared with the gains from even modest liberalisation in services. The political cost is higher, but could also be contained.

The US and the EU are right that solving the farm dossier would not, by itself, restore Doha to health. But that is no good reason not to act without waiting for “compensating” offers, so as to move on to the rest of the agenda before the free-trade coach turns into a pumpkin, immobilised by elections in the US and France, the expiry of the US Administration’s “fast-track” negotiating authority and a global economic slowdown.

Unless these two giants demonstrate that they care about Doha, no one else will lift a finger. The root of this mess is politics — not transatlantic, but global. The WTO has become infected with the UN disease. For five years, the rhetoric of “solidarity” has displaced the substance of economic advantage. For this, India is largely to blame. It has at least as much to gain from freer trade as does the West, but instead has chosen to pose as champion of the poorest. But these are the countries that most need an effective WTO. The collapse of Doha leaves them in limbo.

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