Saturday, 20 December 2008

New wine in old bottle

At the TNC meeting on 17 December, the last one in 2008, DG Lamy raised some interesting points in his speech. Some of the key issues are highlighted below, which my comments in brackets.

On the wider WTO front, I would like to put forward three elements for your consideration, which also stem from our discussions since Friday:

First, I believe that the WTO has a particular responsibility to follow up on the trade measures which been taken in the wake of the financial crisis; you all know that I have set up an internal Task Force to produce regular updates of these measures so that we have a better sense of the trade consequences of the financial crisis.

(HG: These measures include export restrictions on agricultural products, rescue packages that could be challenged as illegal subsidies, etc. Some of these are discussed in an article by Aaditya Mattoo and Arvind Subramanian in the next issue of the Foreign Affairs)

I am ready to report to you periodically on developments on that front in writing, as suggested by Egypt on behalf of the Arab Group and by Japan, also with the support of a number of other Members. My first report could come already this week.

I also believe it would be useful to provide a forum where this WTO radar picture could be discussed collectively; I do not think we need to reinvent the wheel so we could use one of the existing forums in the house to this effect: the Trade Policy Review Body. I have discussed this with the Chair of the TPRB, Ambassador Agah of Nigeria, and he is agreeable to this. We will be looking into a date during the second part of January when a first review among Members could be held on the basis of this radar picture.

(HG: There has been some talks to create a so-called "Bretton Woods II". I don't think that is necessary. While the Bretton Woods institutions surely have their shares in creating the mess we are in today, the main reason for the trouble is not because the existing rules or institutions are insufficient. Instead, it was exactly because the institutions did not do what they are supposed to do and we did not follow the rules that we are in the trouble today.)

Second, I believe we need to keep reviewing developments in the area of trade finance where the WTO early interventions have been useful in mobilising resources for this important area; trade finance is an area which seriously impacts trade flows for developing countries and we should remain vigilant and active.

Third, I believe we need to have a clear roadmap for work on Aid for Trade in 2009, culminating with the second Global Review before the summer break. We need to keep the focus on mainstreaming trade into Members' development policies and we also need to keep pressure on the mobilization of funds, which has been reasonably successful but where more could be done, in particular in view of the current financial crisis.

Looking into 2009, some of you have mentioned your desire to brainstorm over issues which are beyond the scope of the negotiations but which relate to areas interfacing the WTO. I agree with this. The only point I would make is that this may be a useful exercise, provided it does not distract us from our main objective of advancing the Round. I suggest we come back to this in the General Council sometime at the beginning of 2009.

(HG: Does this mean the resurrection of the debate on competition, labour and environment? Some of these have been explicitly rejected by the membership before. Is this the right time to revive talks on these issues? I'm not so confident)

A final point: in the New Year we will also have to discuss the next WTO Ministerial Conference, by which I mean our regular mandated Ministerial Conference; my own sense is that this need not be the big jamboree we have seen in the past, but rather a venue where Members take a strategic look at the future and steps to advance the goals of the organisation. On this issue, the General Council Chairman will consult with Members to get their views and take this forward.

(HG: Good for the WTO: ever since the HK Ministerial 3 years ago, the WTO has not had a ministerial conference. This is a breach of Art IV.1 in the, but the question is who has the standing to sue the WTO on this.

As I've said before, one problem with WTO MCs is that there is too much media attention, and nobody can really work well under spotlight. It's good to know that the DG also prefers low-profile MCs over the noisy carnivals in the past. )

In sum, while the year may end in disappointment, we should now gather ourselves and work in 2009 to demonstrate that the WTO remains as necessary and credible as ever. The world trading system needs the Doha Round to better respond to the needs and aspirations of its Members. Concluding the Round should remain our focus in 2009. But this endeavour takes place within a more global portfolio of WTO activities in which we need to keep investing. This task starts today.

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