New Delhi: India is the first country Pascal Lamy is visiting since the crucial Doha Round of ministerial negotiations failed in July. The director general of the World Trade Organization (WTO) retires next year, but says he is not tired even though the talks, which were to make global trade easier remain unresolved seven years after they began. In an interview, Lamy spoke about nature of the ongoing WTO negotiations and the concept of special safeguard mechanism (SSM), which allows developing countries to impose additional duties if imports cross a certain limit. Edited excerpts:
You said most WTO members disagreed on SSM, which was the 18th item (out of a total of 20) on the agenda of the July negotiations. Does that mean that on the first 17 items there was convergence enough to have a deal?
If there would have been a deal on the 20 issues, (then) the answer would have been yes. Of course, nothing is agreed until everything is agreed (which is the basic principle of the Doha Round).
Going strong: Pascal Lamy says it is his duty to help WTO members conclude the Doha Round of trade talks. Photograph: Ramesh Pathania / Mint
You have been pushing hard to conclude a deal. Are you tired as you near the end of your tenure and your efforts haven’t yielded results?
I am not tired. I mean the Tokyo Round (of General Agreement on Tariffs and Trade, or Gatt) lasted six years. The Uruguay Round lasted eight years and we have had eight concluded rounds in 60 years. The average duration for a round...is seven years. The fact that it has taken seven years is not a problem for me. I can understand why it is a problem for you...because explaining to your readers that the negotiations lasted seven long years doesn’t make sense. That’s a reality we have to live with. They (some WTO members) want to conclude (the talks) this year and my duty is to help them.
Some experts are of the view that the failure of the ministerial meeting in July symbolizes the weakening of WTO as an effective decision-making body at the multilateral level. What do you think?
That’s a very complex question. Gatt/WTO has been there for 60 years. So it is a system in itself. What we do is rule-making, surveillance, litigation and training. Out of the four businesses, three are doing fine. And by the way, they are the ones you never talk about. But they are very important businesses. The whole surveillance, monitoring and notification system—which nobody cares about—is a large part of our daily activity and is doing fine. In 10 years, it (WTO) has become the only place in the international system where serious litigation with serious consequences can take place. We spend 20% of our resources on training developing countries in trade matters which works fine.
The reality is that the world is changing fast and we have to be able to adjust.
Another criticism of the ongoing negotiations is that they (including the July ministerial negotiations) are more about market access (reducing tariffs) and less about non-tariff barriers (like domestic regulations), which are perhaps more important in today’s world.
I don’t agree with that. Non-tariff barriers are part of market access and if you read the draft agreements on industrial tariff, for instance, there is a big package on non-tariff barriers.
But most of the discussions are centred on tariff cuts.
That’s your impression. Non-tariff barriers are for the future, the real obstacles to trade as tariff barriers diminish ...
So are they being given adequate attention?
Of course, they are.
Since the start of the round, several studies have progressively scaled down potential benefits from the conclusion of the Doha Round. What is your view?
No. No. These studies are all over the place. Some have predicted $80 billion (Rs3.4 trillion) and others have predicted $800 billion (laughs). So that is economists...depending on assumptions. I have my own calculations...it’s a simple number. The amount of duties forgone worldwide, five years from now if the July package had been entered into force, will be $150 billion...it does not include any new trade flows. Any economist will tell you, “oh! but this is much too simple”. This is a very basic number. Two-thirds of this (benefit will be) in the developing countries and one-third in the developed countries. It is a number which is reasonably solid.
Do you suspect that with a new US government in place next year, issues of environment and labour standards might qualitatively alter the course of talks?
We have structured an agenda for this negotiation in 2001. Environmental issues are part of this agenda. Environmental goods, environmental services, fisheries subsidies, the relationship between the multilateral environmental agreements and WTO rules ...all are part of the single undertaking (which states that nothing is agreed until everything is agreed). So, there is a lot of environment in this negotiation. Labour standards aren’t part of this negotiations. They are left with the International Labour Organization, which is the place where labour standards are negotiated internationally. So the question is not whether there should be labour standards or not. There are labour standards. The problem is whether you make a bridge between WTO rules and the labour standards like you make a bridge between WTO rules and Wipo (World Intellectual Property Rights Organization) rules.
But the agenda has been structured and nobody is going to change the agenda of the negotiations, with the principle of single undertaking, until and unless this negotiation is concluded.
As the director general of WTO, what is the next milestone for the Doha Round?
I am always looking at the same thing...which is trying to help them (the members) reach the point they decide to reach together. Again, it is the way I put it on Tuesday: They (members) are pregnant and I am trying to help them (“I am the midwife”).