Key Points:

Remember the drama of the G20, the Top 20 industrialised nations, and their summit in Washington, DC, to address the need for concerted global action to address the economic crisis?

Presidents and prime ministers triumphantly agreed not to introduce any new protectionist measures, and to conclude the Doha Development Round.

Mindful of how the Great Depression of the 1930s was prolonged and made deeper by unilateral trade restriction, and that trade fell by 70 per cent in a few years, leaders left this important meeting basking in the glory of dynamic corrective action.

Once home, the opposite of what was said happened. China re-introduced tax breaks for exporters. India imposed caps on imports of steel. Duties on car imports into Russia have been raised. Billion-dollar bailouts to car manufacturers in the US were announced and France promised to protect companies from foreign predators with more than $12 billion. From Indonesia to Ecuador and Argentina, countries have introduced protectionist policies.

Trade specialists and historians write that things can't spin out of control like the 1930s, with trade restrictions and competitive devaluations, now we have the binding rules of the World Trade Organisation. True, but not totally.

Most countries' tariffs are locked into agreements, but there's a big difference in many countries between what is in the agreements and what the tariffs actually are. That is the bound tariff levels and what they are in practice.

If all countries raised their tariffs to what is legally possible, even under the WTO, there would be savage trade falls. Congratulations to the WTO which recently decided to create a system to monitor and publicise protectionist measures.

All this is a means we need to create momentum, build confidence, and conclude the Doha Development Round which was launched years ago when I was director-general of the WTO.

To stand still, trapped like a possum in the headlights, is extremely risky and makes the system vulnerable.

I've always been a dangerous, even reckless, optimist, but the reality is it's precarious. The World Bank suggests trade growth will be the lowest since World War II. Korean exports are down by 30 per cent (January, compared with a year ago); Taiwan 42 per cent and Japan 27 per cent.

Cargo leaving Long Beach, Los Angeles, fell by 18 per cent in a year. China's exports are falling dangerously - their growth may be cut by a third, creating severe social distress.

Friends report the air in Hong Kong and Beijing is cleaner than at the time of the Olympics, such is the industrial contraction.

Lloyds report that there are miles of ships anchored off Singapore and elsewhere, and that shipping companies have offered to waive fees on containers in some places, just charging broker costs to move half-full ships and maintain some cash flow.

The Bank of England has the lowest interest rates since records began 400 years ago. Deflation, the Japanese experience, is now the biggest threat unless confidence returns to markets.

We don't know what will work or how long this crisis will continue. We do know what won't work, because it's been tried.

We do know that protectionism will make things worse. We know that global trade has increased quicker than domestic trade and growth. We do know we are all in this together, that no nation can succeed on its own.

Our success is based on others' success, and that is a healthy thing.

Governments are cutting taxes, recapitalising banks, boosting public expenditure which is smart, and the opposite of the immediate response in the 1930s, when governments tried to balance budgets and raised taxes and cut spending.

The world's economy will recover. Recessions are not unusual, depressions are.

Historians should write of the great follies of this decade: the unregulated, insane, untransparent lending and leverage practices of global financial companies.

And the reluctance of politicians to take a few local hits, for their wider benefit, by concluding the Doha Trade Round.

They should also note the slow acceptance of the importance of China, India, Brazil and Russia at the top table of decision-makers. Also the historic stupidity of not negotiating Russia into the WTO and having firm, predictable, binding rules for the export of energy inherent in such a deal.

There's a whiff of an economic Munich in the air - I expect to see politicians with umbrellas and moustaches, muttering, "Peace in our time" yet again when leaders assemble at the G20 and Apec meetings, knowing full well that, for a decade, their summit communiques are well-meaning, but meaningless, because they are not binding and seldom implemented.

But not to have such communiques is even more dangerous.