Sunday, April 26, 2009

Will Doha Bounce?

Much has been made lately in equities that even a dead cat will bounce if dropped hard enough. Bears use this quip to dismiss market gains as temporary reactions to very low levels. But will this theory of stock rebounds work for a trade round that has been pronounced dead many times in its seven year run?

In their communique yesterday, the IMF hopes that some face time with pavement will do more than play on a cadaver's little-known elasticity but bring it back to live. The communique calls for completion of the Doha trade round via the World Trade Organization. The communique calls for:

4. We stress the importance of members taking account of the effects of their economic, financial, and investment policies on others, and refraining from protectionism in any form. The IMFC calls for urgently concluding an ambitious and balanced Doha Development Round, which will help boost the recovery of the global economy, and emphasizes the importance of ensuring the availability of sufficient trade finance.

As part of its crisis management solutions. Given that Doha has been held up in part over the developed world's unwillingness to make concessions on issues like agricultural subsidies, which could cost farming jobs in the US and Europe, I doubt those countries will be willing to budge now during a period of rising unemployment.  

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