Is Doha Important?

Paul Krugman says the failure of the Doha trade talks in Geneva is no big deal:

[E]xisting agreements stand. This isn’t Smoot-Hawley; it isn’t even the 2002 Bush steel tariff. Life, and trade, will go on.

The Economist initially appears to agree:

You can construct a plausible argument that the collapse of yet another set of talks on the Doha round, which is now coming up to seven years old, is of little importance. While the world’s trade ministers have alternated between talking and not talking to one another about Doha, the world’s businesspeople have carried on regardless: the growth of global commerce has outstripped the hitherto healthy pace of global GDP. Developing countries in particular have continued to open up to imports and foreign investment. You might say that not much was on offer in Geneva anyway: one study put the eventual benefits at maybe $70 billion, a drop in the ocean of the world’s GDP. Global stockmarkets, with so much else on their minds, either didn’t notice or didn’t care. On July 29th, the day the talks broke up, the S&P 500 index rose by 2.3%

But no so fast, it continues:

The lowish estimates of the economic benefits of the round miss out two things. One is the value of the unpredictable dynamic benefits of more open markets. Access to more customers allows exporters to exploit economies of scale. Competition encourages not only specialisation, the classic result of more open trade, but also increased productivity. The other is what you might call the “option value” of the Doha round. The WTO inhabits a sort of parallel universe in which countries negotiate not on what tariffs and subsidies will actually be, but on maximum (or “bound”) rates and amounts. Although many countries have cut tariffs and farm subsidies—if only, in the latter case, because of rising food prices—too few have turned these cuts into commitments. Tighter binding would cramp their ability to turn back to protection. It would have made up the bulk of a Doha deal.

I'm slightly more sympathetic to Krugman's argument - if only because it is based in the short term and is more predictable. However, agricultural subsidies and tariffs do need to be abandoned - the U.S. Farm Bill, for example, was criticized by basically every member of the American public who is not a member of a congress or a farmer. But, despite Obama and Hilary's pandering in the primaries, does anyone really think a new wave of protectionism is going to sweep the globe?