The United States, more than any single country, created the world trading system. The US has never had more riding on the strength of that system. And US leadership ? especially in the current Doha trade talks ? is indispensable to the system?s success. It is true that as the WTO?s importance to the world economy increases, so too does the challenge of making it work: there are more countries, more issues, trade is in the spotlight as never before. But the fiction that there is an alternative to the WTO ? or to US leadership ? is both naïve and dangerous. Naïve because it fails to recognize that multilateralism has become more ? not less ? important to advancing US interests. Dangerous because it risks undermining the very objectives the US seeks ? freer trade, stronger rules, a more open and secure world economy.

The Doha Round is a crucial test. The core issues ? services, agriculture, and industrial tariffs ? are obviously directly relevant to the US. America is highly competitive in services ? the fastest growing sector of the world economy, and where the scope for liberalization is greatest. In agriculture too the US is competitive across many commodities ? but sky-high global barriers and subsidies impede and distort agricultural trade. Industrial tariffs also offer scope for further liberalization ? especially in certain markets and sectors. But what is at stake in these talks is more than the economic benefits that would flow from a successful deal. The real issue is the relevance of the multilateral trading system. Its expanded rules, broader membership, and binding dispute mechanism mean that the new WTO ? created less than ten years ago ? is pivotal to international economic relations. But this mean that the costs of failure are also higher ? with ramifications that can be felt more widely. Advancing the Doha agenda would confirm the WTO as the focal point for global trade negotiations, and as the key forum for international economic cooperation. The credibility of the institution would be greatly enhanced. But if the Doha negotiations stumble, doubts may grow, not just about the WTO?s effectiveness, but about the future of multilateralism in trade.

<B>Integrated in the world economy</B>

This should be a major concern to the US for two reasons: First, the US is now integrated with the world economy as never before. A quarter of US GDP is tied to international trade, up from 10 per cent in 1970 ? the largest such increase of any developed economy over this period. A third of US growth since 1990 has been generated by trade. And America?s trade is increasingly global in scope ? 37 per cent with Canada and Mexico, 23 per cent with Europe, 27 per cent with Asia. Last year alone, exports to China rose by almost 30 per cent. The US has also grown more reliant on the rules of the multilateral system to keep world markets open. Not only has it initiated more WTO dispute proceedings than any other country ? some 75 since 1995 ? according to USTR it has also won or successfully settled most of the cases it has brought. The point is this: even the US cannot achieve prosperity on its own; it is increasingly dependent on international trade, and the rules-based economic order that underpins it. As the biggest economy, largest trader and one of the most open markets in the world, it is axiomatic that the US has the greatest interest in widening and deepening the multilateral system. Furthermore, expanding international trade through the WTO generates increased global prosperity, in turn creating yet more opportunities for the US economy.

The second point is that strengthening the world trading system is essential to America?s wider global objectives. Fighting terrorism, reducing poverty, improving health, integrating China and other countries in the global economy ? all of these issues are linked, in one way or another, to world trade. This is not to say that trade is the answer to all America?s economic concerns; only that meaningful solutions are inconceivable without it. The world trading system is the linchpin of today?s global order ? underpinning its security as well as its prosperity. A successful WTO is an example of how multilateralism can work. Conversely, if it weakens or fails, much else could fail with it. This is something which the US cannot afford to ignore.