The current hurricane in financial markets has not significantly impacted trade flows. However, many believe that inadequate regulation is to blame for the recent financial disaster, leading to calls for stronger rules of commerce through a new trade agreement. China's deputy World Trade Organisation ambassador, Xiang Zhang, believes that concluding negotiations for the Doha round would send a positive signal to the world economy and business people. Failure to reach a deal after seven years could result in a new crisis of confidence in business. WTO Director-General Pascal Lamy is still hopeful for an outline deal on agriculture and industrial goods by the end of the year in the Doha round, despite the lack of progress in July. Last week, both Lamy and EU trade chief Peter Mandelson expressed concerns that the financial crisis could lead to protectionism, harming economic growth and emphasizing the urgency of a new trade deal to preserve the benefits of globalisation. The crisis could divert leaders' attention away from trade issues, making it harder to reach an agreement. However, a proposed $700 billion bailout for the U.S. financial industry could help alleviate these concerns. Any trade deal, not expected to be finalized until at least 2009 or 2010, would not have an immediate impact on trade flows due to implementation periods of up to 17 years for developing nations and 5 years for rich countries. This delayed economic effect would also suggest that there would not be an immediate financial market impact, as exchange rates and company earnings would only respond to changing trade flows later on. Experts believe that a new trade deal would increase business confidence by demonstrating a decrease in barriers to business, a healthy world trading system, and effective international cooperation. Fredrik Erixon, from the Brussels trade policy think-tank ECIPE, mentioned that existing WTO agreements restrict countries from raising tariffs too high, reducing the likelihood of a repeat of the economic nationalism seen in the 1930s during a financial crisis. However, the current anti-deregulation sentiment, particularly from French President Nicolas Sarkozy and German Finance Minister Peer Steinbrueck, may hinder the prospects of a new trade deal that aims to open up markets. This negative atmosphere could also impact discussions on liberalizing trade in financial services, according to diplomats. However, during a meeting in July where governments indicated a willingness to allow access to various services in markets, the financial crisis did not appear to deter negotiators from discussing banking. John Cooke, the chairman of the Liberalisation of Trade in Services Committee, emphasized the distinction between market access, which is the focus of trade negotiations, and financial contagion, which falls under the jurisdiction of regulators. He pointed out that as globalization continues to progress, there will be increasing international interdependence between different economies, necessitating the financing of trade and investment. Trade rounds are not only aimed at promoting liberalized commerce, but also at establishing fair international trading rules for all nations. In the ongoing Doha round, developing countries are advocating for a reduction in agricultural subsidies provided by wealthy nations. These subsidies artificially lower prices, leading to difficulties for farmers in poorer countries to compete in the market. Munir Ahmed, the secretary-general of the International Textiles and Clothing Bureau, likened these subsidies to short-selling in the stock market, where investors borrow and sell shares they believe are overvalued in hopes of buying them back at a lower price. This practice has been linked to recent declines in bank stocks. Ahmed, a former Pakistani ambassador to the WTO, warned that a failed Doha round would result in missed opportunities to regulate various aspects of international trade. The current financial crisis further emphasizes the importance of reaching a Doha deal, as it serves as a reminder that economic prosperity is not guaranteed indefinitely. Due to the recent growth in business, many companies have not felt the need to advocate for trade rule reforms to prevent protectionism from returning. As a result, there has been less pressure on governments to finalize a deal, potentially leading to the reversal of tariff and subsidy cuts. New Zealand's WTO ambassador, Crawford Falconer, believes that reducing entitlements is crucial to preventing regression in the financial world, making it even more crucial to complete the negotiations now.