In the four months since G20 leaders promised to try to close a deal on global trade and foreswore new trade barriers, the star-crossed Doha trade talks have collapsed and all but three of the 20 countries have implemented trade-distorting measures, according to the World Bank. G20 leaders should use their London meeting to stop the unraveling of the trading system that has spread prosperity, has lifted millions out of poverty, and is essential to economic recovery.

Globalized markets are now so pervasive that we easily lose sight of what an extraordinary, yet fragile, achievement the trading system is. In 1947, 23 countries concluded the General Agreement on Tariffs and Trade in hopes of ratcheting down the protectionist follies that had exacerbated a global depression and contributed to conditions for war. Today, the World Trade Organization, which subsumed GATT in 1995, includes 153 members representing nearly 98 percent of global trade.

Since the late 1940s, import quotas have been scrapped--with the regrettable exception of agriculture--and average tariffs have fallen from nearly 40 percent to 9.7 percent. Trade in goods has meanwhile grown 30 fold. Containerization and other innovations have played a role, but the dramatic trade expansion would not have been possible without GATT/WTO inspired liberalization.

Yet, the WTO remains a half-built edifice with gaping holes and different rules for developed and developing countries. Take tariffs. Developed countries have haggled each other's duties down to mere nuisances--the EU's average tariff is 5 percent, and America's 3.5 percent.

By contrast, developing countries have recently cut duties unilaterally, but have avoided major commitments--called "bindings" in trade jargon--that would fetter their ability to raise tariffs at will. For instance, Brazil has cut actual tariffs to an average of 12 percent, but has an average WTO "bound" tariff of 30 percent. And India has dropped its tariffs to an average of 15 percent, but maintains an average bound tariff of 50 percent. Indeed, it was the reluctance of India and China to accept restrictions on their freedom to increase tariffs that produced last year's Doha train wreck.

The current crisis, in which the WTO projects an astonishing 9 percent fall in trade this year, is testing all countries' commitment to openness. World Bank staff report that G20 countries have implemented a raft of trade distorting measures since November--in many cases without violating their WTO commitments. Developing countries such as Ecuador and India have hiked up tariffs. Some have erected non-tariff barriers, sometimes camouflaged as consumer protection. China has banned Belgian chocolates, Irish pork, Italian brandy and Dutch eggs, and India has banned Chinese toys.

Developed countries haven't been blameless. Some--most notoriously the United States--have sought in stimulus packages to direct job creation with local preferences. Rich governments have also opened their pocket books to failing firms. The auto sector has been promised some $50 billion so far. And falling commodity prices will automatically mean larger EU and U.S. farm subsidies. Even if bailouts and farm subsidies are vulnerable to WTO challenge down the road, they will disrupt international competition in the meantime.

These state interventions invite a vicious cycle of tit-for-tat that undercuts the integration essential for recovery. All countries are harmed, but the poorest are the most vulnerable. To reinforce open markets, G20 leaders should:

  1. Renew and extend their one-year pledge to refrain from new trade-distorting measures, making clear that the commitment applies even where no WTO commitment is broken.

  2. Task the WTO with maintaining an up-to-date website tracking compliance with their pledge, with the WTO supported by World Bank, IMF and OECD staff in ferreting out transgressions, as well as by in-put from governments, the private sector and other stakeholders. The glare of publicity can help constrain protectionist temptations.

  3. Shepherd global trade negotiations to conclusion by the end of 2009 in order to lock in unilateral liberalization, expand market access for goods and services in both developed and developing countries, and cut rich country farm subsidies. Credible progress here would boost market confidence right away and lay the foundations for future growth.

  4. Commit to signing the WTO's procurement code as they proceed with their stimulus programs. In contrast to developed countries, no major developing country has done so yet. Joining this accord would protect their exporters from Buy-America-like discrimination in rich country procurement, while ensuring competitive purchasing domestically for the benefit of their taxpayers.

  5. Ensure poor country exporters have the finance they need, despite the evaporation of credit, by supporting the World Bank efforts in this area. Japan has pointed the way with a $1 billion trade finance initiative with the World Bank.

  6. Support financially World Bank work aimed at tackling the high costs of moving goods across poor country borders caused by red-tape, regulatory obstacles and the like. These trade costs present a higher hurdle than tariffs for exporters in Africa and other poor regions. Rich countries should make good on $15 billion in promises to fund this trade facilitation reform without waiting for Doha's uncertain completion.

The WTO has provided a supportive framework for integration well beyond promises inscribed in its underlying agreements. That broader liberalization is at risk. As leaders of the world's leading trading nations, responsibility falls to them to sustain the openness that has benefited so many. As Margaret Thatcher has warned, in politics there are "no final victories."

Rod Hunter, a Hudson Institute senior fellow and Washington lawyer, served as a senior director in the White House's National Security Council under President George W. Bush.