New Delhi: Pascal Lamy, director general of the World Trade Organization (WTO), is in the most difficult phase of his long career. The Doha Round of multilateral trade negotiations is on the verge of collapse because of a widening rift between developed and developing nations. Lamy, 64, who was in India earlier this week, says the view that a more staggered approach should be taken on the Doha Round makes sense. Edited excerpts:
Do you think a multilateral trade agreement as comprehensive as Doha was ahead of its time, which is why an agreement has been elusive so far?
That is the view of some. Some people say that it is too ambitious, that the agenda was too large compared to the Uruguay Round, that the number of participating countries is also much larger. They say the combination of a larger agenda and a single undertaking and many more players may be over-ambitious. I am not sure this is right because the WTO mission is to regulate multilateral trade where it needs changes in existing regulations. And I do not see which part of this agenda was not relevant. It is not a question of whether the agenda was relevant or not, it is a question of whether the complexity of the agenda was doable. Hence, the view that some have expressed, that we will need to discuss for the WTO December ministerial meeting whether a more staged approach is better, whether a more staggered approach in which we look at the issues one by one instead of linking everything with everything makes more sense. In other words, a more pragmatic approach under which each area is looked at on a stand-alone basis on its own merit. That, of course, will necessitate an agreement among members. It remains to be seen whether they accept that or not. This is something we need to test in coming times.
So what you are suggesting is splitting up the Doha Round of negotiations into separate areas.
I am not there to make suggestions. But this approach is one that I have heard from many WTO members.
Seeking consensus: Lamy says the need now is to ensure that the ministerial conference in December will conclude with a path that allows negotiations to resume. Ramesh Pathania/Mint
But on Monday we heard India’s commerce and industry minister Anand Sharma say he wants the Doha agenda to be completed as a single undertaking, which means India is opposed to it.
I do not think both are incompatible. There is a provision in the Doha declaration which provides with what we call in our jargon for “early harvest”. This means provided there is enough understanding among members, individual areas could be part of an early harvest.
So, in hindsight, do you think putting everything together—agriculture, non-agricultural market access, and services—as a single undertaking for negotiations may have been a mistake?
All the issues on the agenda are relevant. They are included because members believe they need to be changed. But today, we have to face the reality that disagreement over industrial tariff reductions for the moment is holding up the rest of the topics. The question is whether through smaller steps we can get to a final global deal.
Are you still hopeful of a small Doha package for least-developed countries (LDC) in the December ministerial conference?
We have tried this between Easter and the month of July with this LDC-plus package and the reality is that it did not work. Some members were ready to have a package of measures for the world’s LDCs on a stand-alone basis. But some were only ready to do this provided other topics were also part of the package. It did not work. We now need to ensure that the ministerial conference in December will conclude with a path that allows negotiations to resume and to exit the stalemate that we are in.
How justified is the argument that emerging economies such as India and China should contribute more towards a Doha agreement than envisaged earlier, given their growing economic stature? What is your stand on the issue?
Not for me to take sides. What I have to do as the WTO director general is provide members a diagnosis of the situation on what the reasons of the stalemate are. Certainly, one of the reasons is the difference in views between the US on one side and the emerging nations on the other side. The US says the emerging countries have now developed to a point which requires them to accept trade disciplines which are “developed country-like” rather than “developing country-like”. On the other side, emerging countries say they recognize they are not like LDCs. They are ready to subscribe more disciplines, more market opening than poor countries, but this does not mean they are ready to consider themselves as developed countries. They say they still have huge domestic development challenges. Whether a compromise can be found between these two positions clearly remains to be seen and this is what for the moment stalemated the industrial tariff reductions.
There is an overwhelming view among developing countries that Doha Round is stuck because the US president lacks the fast-track authority for trade negotiations, without which countries are not willing to open their cards. Do you agree with that view?
I don’t subscribe to this view. After all, the US had fast-track authority for bilateral agreements with Panama, Colombia and South Korea. These countries are still waiting for Congress ratifying this agreement. So having fast-track authority is not where the main difficulty lies.
Don’t you think a window of opportunity has been lost in 2011 and the next opportunity can come only after the US elections are over by 2012-end?
I hear this view. But we have electoral cycles and political cycles in each and every WTO member. So if negotiations have to stop every time we have an election somewhere, then there will never be an international negotiation.
US is a major player but it is not the only player. We have just had a change of leadership in Japan. We also have a change in leadership in China. The WTO system operates in a sort of medium- to long-term time frame and we have to be able to weather the durations of election cycles among our members.
It seems, so far, WTO is opposed to the innumerable preferential trade agreements(PTA) being signed by member countries. Why? Is it not the norm of the day? Why can’t WTO accept it and work around them and find a role for itself?
I would not agree that the WTO’s position is against PTA. If you read the WTO World Trade Report published in July, it (is) entirely devoted to the issue of the coexistence between the preferential agreements and multilateral rules... The message we sent is that as long as PTAs are about tariff reduction, there is no real problem of coexistence because the more preferences you give, the less preferences you have. The multiplication of preferences is by definition eroding them. But there is a potential problem in preferential agreements with different regulatory agreements. A multiplication of regulatory regimes risk scattering the multilateral trade regime and limiting economies of scale. So, this is where we need more and better multilateral disciplines.
Do you mean to say that some of the bilateral regulatory agreements are against WTO rules and, hence, can be challenged in WTO?
It is not so much about regulatory regimes being against the WTO. It is more about the multiplication of regulatory regimes which can create barriers for global value chains.
What is your view on ACTA (Anti-counterfeiting Trade Agreement)? Is it not against the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement? Why has WTO not spoken against it?
ACTA has been negotiated outside WTO. The TRIPS agreement says that nothing in the agreement prevents parties from negotiating TRIPS plus discipline. Now, whether what is in ACTA matches this condition or not is not for me to say. If some WTO members believe ACTA enters into a ground that is non-compliance with TRIPS, it is up to them to raise this issue in the WTO. In the WTO, only members have the ability to do so.
Many developing countries, including India, are not supportive of what are called the “21st century issues” such as climate change, exchange rate and food security, which WTO is expected to take up. How do you see progress on these issues?
I don’t think there is an agreed position among developing countries. It is Brazil which recently introduced trade and currency in a working group at WTO. Food security is being pursued by many net food importing countries such as those in the African group. So, it is a developed versus developing (issue), which is why we have to continue with the discussion, including at the upcoming WTO ministerial in December.