benefits of any new liberalization and could opt out of any obligations that are not to their advantage.

This new agenda would energize the large trading nations. The status quo powers --United States, Europe, and Japan-- crippled by debt and anemic growth prospects, are in desperate need of a productivity boost. For example, the United States needs to transition toward a growth model that is less reliant on consumption and more on investment and exports, in line with President Obama‘s export goals. Internal reforms are vital, but global trade reform can be a useful complement, as argued in a recent Council on Foreign Relations report (CFR, 2011). A new agenda would offer growth benefits in a way that the current unambitious Doha agenda cannot. Countries such as Brazil, India, Mexico, South Africa and South Korea, could be galvanized by an agenda that meaningfully deals with perceived ―unfair‖ competition from China by addressing undervalued exchange rates and that liberates them from wasteful competition for natural resources by disciplining export restrictions and cartelization.

Although we have framed the future issues for the trading system around China because of China‘s likely dominant role, we recognize that future negotiations will not be just about China. Indeed, other countries will have a lot at stake in specific areas. For example Latin American exporters will be key players in agriculture, the oil exporters on issues related to energy access and foreign investment, and the US and Europe on all issues. Future negotiations will thus have an essential multilateral character and trade-offs across sectors will have to meet the demands of some or all these countries. But our contention is that the broad nature of issues involving China affords the possibility for securing satisfactory reciprocal deals.

There is also the question of China‘s willingness to engage in this new agenda. We cannot be sure, of course but three factors might be at play. First, the agenda includes issues that China has an important stake in pursuing: clear investment rules, restraints on climate change-related trade action, as well as assured access to resources (oil and food) and markets overseas.

Second, the challenges for an open system from the ―decline of the west‖ should not be underestimated. If growth in industrial countries does not recover, income distribution continues to worsen, and economic opportunities shrink, the intellectual and political consensus in favor of open markets —in which China has a strong stake—will come under threat. There are already ominous portents.

In the United States, for example, five leading intellectuals (three of whom are Nobel prize winners) with impeccably cosmopolitan credentials—the late Paul Samuelson, Alan Blinder, Paul Krugman, Larry Summers, and Michael Spence—have expressed differing concerns about the impact of globalization on the US economy. They have all been careful not to advocate protectionist remedies but their concerns could lend legitimacy to such policies. Not least because the political support for free trade agreements has declined considerably among the public. More strikingly, a November 2010 Pew poll showed that only 28 percent of traditionally 34