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The man who can save the global economy

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Why you can trust SCMP

In a remarkably calm and dignified manner, the World Trade Organisation has chosen a new director-general, Pascal Lamy, a former European Union trade commissioner. There is no better free trader than a former socialist banker. The decision was made ahead of schedule. The last two director-general selections were bitter and divisive. My nomination was blocked until I did a slightly sordid deal to split the term. This time, however, a clean decision means that the new director-general is off to a good start.

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The main goal of the next WTO chief will be to make the multilateral system worth working for. Results are always the best answer to criticism. To do this, leaders must now assert themselves and cut through the details to get to the core principles of the matter and conclude the Doha development round of trade talks.

Perhaps it is time to remind ourselves why open trade is a good idea; why it works. Sadly, trade liberalisation is too often seen as a trade-off. But it makes economic sense to trade openly, anyway. This has been proved in country after country. That is why agreements that postpone reform for years are doing poor countries no favours.

The new director-general needs to remind governments why our parents created an open, rules-based world trading system. Immanuel Kant, in his essay Perpetual Peace, suggested that 'durable peace could be built upon the tripod of representative democracy, international organisation and economic dependence'. By 'dependence' he means economic integration.

Trading services creates friends; control breeds enemies. That is why new trade opportunities between India and Pakistan, and the mainland and Taiwan, offer hope. Let trade and people be free, and the international frontiers will cease to be such a problem. Every time we trade, we are making an agreement with somebody and, in the absence of coercion, both parties walk away better off.

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In the old days, it was said that if trade did not move, armies would. Now it is armies of desperate migrants who will move from oppressive, closed economies to those that are free, open and growing. These desperate people are the weapons of mass migration, just another issue that leaders should consider when they decide whether to co-operate with and assist the new director-general to conclude the Doha development round. It is because that agenda, if implemented, will mean the greatest redistribution of opportunity - and then wealth - in history. It will give real meaning to the speeches so often given about how poverty, despair and humiliation are a breeding ground for extremism.

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