Sri Lanka, Capitalism 2.0, a dead Doha and the new economic order

July 27 (LBO) – Small countries like Sri Lanka would have been better off had world trade talks succeeded as the alternative is bilateral trade deals with stronger, increasingly protectionist economic partners, a top European economist said. Protectionist sentiment was on the rise in established capitalist countries who feel threatened by the emergence of new economic power houses which got rich by playing the same game, Norbert Walter, Chief Economist of Deutsche Bank Group said.

These sentiments were evident by resistance to investments in the US and Europe by companies and funds from emerging markets which are buying up old-established American and European companies, he said in Colombo, at the Ceylon Chamber of Commerce annual general meeting.

In such a protectionist environment, the failure of the Doha round of world trade talks could hurt small, developing countries like Sri Lanka, Walter, a well-known European economist and academic, said.

“Doha is dead,” Walter declared. “The fast-track has expired; the US president can no longer negotiate trade agreements; the power has gone back to Congress.”

Walter said US Congressmen “can be quite parochial” and could respond to feelings among voters that globalization and free