Appendix 1

Parliamentary Conference on the WTO
September 16 2010, WTO Headquarters, Geneva

22nd Session of the Steering Committee
Summary of Discussions with
WTO Director General Pascal Lamy

 

Mr. Pascal Lamy, Director-General of the WTO, appeared before Members of the Steering Committee to discuss recent developments at the WTO.

1.  Current Round of Negotiations

Mr. Lamy gave an overview of the state of the Doha round of multilateral negotiations. He indicated that negotiations are still where they were a year ago, with approximately 20% of the items still under discussion – notably in services, industrial tariffs, agriculture and trade facilitations. Negotiations on fisheries subsidies and cotton remain very difficult. Until June 2010, Mr. Lamy’s assessment was that the negotiations have reached a stalemate, with very little political will and energy. He indicated that on most issues the United States is on the offensive and China remains defensive, but the political situations in some countries, notably the upcoming midterm election in the United States, leave a lot of uncertainty . Most developing countries are becoming impatient and frustrated, since for most of them, the deal is already on the table and what remains has to be negotiated between the larger players only. Nevertheless, Mr. Lamy mentioned that special groups on each issue will be discussing technical aspects of the deal in September and October, and political movement may follow.

Answering a question about using other forums to discuss trade rules, Mr. Lamy stressed that the WTO still remains the place to negotiate these rules. Other forums, like the G20, can however be used to put political pressure. For example, the WTO monitoring system used during the last two years to flag potential protectionist measures was launched thanks to the support from the G20. Mr. Lamy also indicated that G20 leaders had a good exchange of views on the Doha round during their last meeting in Toronto. This forum is important to provide leadership but it does not do the technical negotiations.

On a question to decouple the negotiations, i.e. closing the deal on what is already agreed upon and leave the rest for another round, Mr. Lamy agreed that the idea is interesting but not really applicable. Negotiations are about giving and taking. For example, a country will not sign an agreement with only a “duty-free, quota-free” deal to the Least Developed Countries if it obtains nothing in return.

 

On the role of Non-State Actors (NSA), Mr. Lamy mentioned that the WTO Public Forum is a first step to open discussion between the WTO and NSA. His view is that NSA’s role is most important at the national level, because the legitimacy lies within national governments. National governments are the deciding bodies in international forums, which, in his opinion, are traditionally poor at gaining legitimacy. In addition, he argued that global problems have to be localized, hence the importance of NSA’s involvement at the domestic level.

2.  The Summit on the Millennium Development Goals

Mr. Lamy also talked about the upcoming Summit on the Millennium Development Goals (MDG).^[2] The WTO will have to report on how much the organization has contributed to the MDG, notably MDG 8 “to develop a global partnership for development,” and MDG 1 “to eradicate extreme poverty and hunger.” His sense is that the WTO contribution was generally positive (60% full in his words).

Trade openings have been positive for the developing countries although there are still efforts to be made regarding Aid for Trade, and the trade capacity building of these countries. He indicated that it is harder to obtain funding for these initiatives in time of economic crisis. He stressed that developing countries have benefited from WTO discipline: the WTO represents an insurance policy against protectionism but since employment numbers are still not recovering, the temptation for protectionism remains.

Responding to a question on the reasons to change the current trade rules if it was proven to work for the economic recovery, Mr. Lamy emphasized the need to rebalance the trade system in favour of developing countries.

Other members asked questions about the impact of trade on the food crisis. Mr. Lamy indicated that food prices will still increase in the medium term because of changing diets, and that adjustments in production should occur. In the short term, the 2010 food crisis is somewhat different than the 2008 crisis because of the availability of stocks that can be marketed to depress prices – in 2008, stocks were at their lowest in decades. The problem remains with countries that have put export restrictions on trade since it continues to starve countries that have to import food. Mr. Lamy recognized there is a very weak WTO discipline on export restrictions.

A member expressed the concern that the liberalization of international trade still has a bad reputation; and it is sometimes seen as a cause of economic problems. Mr. Lamy answered that perceptions on trade vary greatly depending on the country: Australia, Chile, and Singapore are places where trade is seen in a very positive light. It is less so in other countries. He indicated that he personally spent a third of his time on advocacy. He often mentions the example that for a $150 electronic product exported from China to the United States; $60 goes back to Japan, $50 to the United States, etc. His view is that most products today are not “made in country X or Y” but are “made in the world” and that it makes even less sense now to obstruct trade. The WTO is using new technologies more and more, to communicate the benefits of trade, notably social networks. However, since the organization has limited resources, it can only communicate on the bigger issues. Detailed communication has to be tailored locally since it is usually nationally or culturally sensitive and therefore beyond the capacity of the WTO.

3.  Relations between trade rules and other issues (environment, health standards)

A recurring topic during the WTO public forum this year and in past years also has been the relations between the WTO or trade rules in general with other global issues such as the environment.

Mr. Lamy stressed that WTO negotiate, implement and litigate the rules of world trade. Environmental issues, labour standards, health rules, and intellectual property rules are negotiated in their respective forums, and members are bound to these rules to the extent they are defined in theses forums. In some cases, explicit bridges have been built between trade and another issue: for example the agreement on Trade-Related aspects of Intellectual Property Rights, the agreement on Sanitary and Phytosanitary Measures (health and environment), and the agreement on Technical Barriers to Trade (environment). Social issues and human rights are present in preamble of the WTO agreements but there are no explicit bridges between trade and social standards.

Although there are no WTO rules specific to climate change, climate change measures and policies intersect with international trade in a number of different ways. For example, national measures to mitigate and adapt to climate change may have an impact on international trade (as they may modify conditions of competition) and may be subject to WTO rules. The WTO “tool box” of rules can be relevant, therefore, to the examination of climate change measures.

Mr. Lamy, however, noted that the jurisprudence of the Dispute Resolution System shows that WTO rules cannot be interpreted in isolation of international law.

4.  Conclusion

Mr. Lamy thanked the Steering Committee for the opportunity for share some of his views with parliamentarians. He also agreed in principle to accommodate the next Parliamentary Conference on the WTO at the WTO Headquarters in Geneva.