The recent food, fuel and financial crises have imposed large external shocks on households and firms in all developing countries. They have prompted questioning of the risks and rewards of globalization and identified areas where the global governance of trade urgently needs improvement. (Here, I broadly define good global trade governance as international cooperation in the form of a set of agreed rules that reduce the negative spillovers of national policies affecting international flows of products and production factors.) At the same time, the financial crisis has revealed the robustness and importance of the trading system. A major feature of the current crisis is the dog that did not bark: that is, to date, we have not seen the widespread imposition of the types of trade protection that characterized the 1970s and early 1980s, not to mention the 1930s.

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