WTO chief sees trade risks from recession

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The global economic downturn is far from over, and few countries have dismantled the dangerous protectionist barriers they imposed in response to it, World Trade Organisation Director-General Pascal Lamy said today.
In remarks to the WTO’s 153 members, Lamy said that import penalties and other border restrictions were closing off markets and causing more difficulty in a time of depressed demand. All of these could be challenged in WTO courts if they persist.
“There is no indication yet of governments more generally unwinding or removing trade-restricting or distorting measures that they imposed early on in the crisis,” the Frenchman said.
While saying there has been no “outbreak of high-intensity protectionism” to date, Lamy raised the possibility of a rash of trade disputes, retaliatory restrictions, and sanctions in response to unfair barriers that are kept in place.
He also warned that difficult economic times could persist, Reuters reports.
“I would caution against excessive optimism,” Lamy told the WTO meeting.
“Although financial markets are showing signs of stabilizing, the crisis is far from over, in particular in many developing countries that are only now starting to feel its full force on their trade and economic growth.”
Lamy last week attended the G8 summit where leaders pledged to conclude the Doha Round, a global free trade pact he has estimated is worth $130 billion (R1068 billion) a year through saved tariffs and expanded commerce by 2010.
Trade diplomats gathered yesterday at the WTO’s headquarters, on the shores of Lake Geneva, for the first Doha negotiating session since the G8 plus emerging countries set the fresh target for the talks that began in 2001.
Packed schedule
Negotiators are filling their September calendars with sessions meant to bridge
the remaining differences over what sectors should be shielded from tariff cuts, and which farmers can keep receiving market-skewing subsidies.
Luzius Wasescha, Switzerland’s ambassador to the WTO who chairs discussions on industrial goods, told journalists that he would “design a road map” this week for intensive negotiations through the autumn.
Wasescha, who said he needed clear signals from countries before drafting a new negotiating text, also said he would consult three countries directly that are demanding special treatment in a deal: Argentina, South Africa and Venezuela.
The Doha Round, named after the Qatari city where the talks began in 2001, has faltered at various points because of the reluctance of both rich and poor countries to expose their key sectors to more foreign competition.
Lamy has said the accord is at least 80 % agreed.
The former EU trade chief has used a variety of metaphors to express this, saying negotiators are running the last lap of a marathon, bringing a plane to its landing zone, and adding the last touches on a gothic cathedral.
Wasescha, the chairman for industrial goods talks, described himself as “the captain of a boat” still moored in the harbour but ready to sail upon signals from WTO members about where the negotiations should go.
All WTO members are currently undergoing training in how to translate a paper agreement on the formula for tariff cuts into actual decreases in the import duties charged, making room for all exceptions. This is key to preparing an eventual deal.
“They need to know how to do it,” one trade official said.
For a deal to be ready for signature in 2010, diplomats say leading economies need to resolve their differences about how to slash farm subsidies and tariffs on traded goods within months.
Trade ministers are expected to be told to resolve the most sensitive issues that may require some countries to accept the risk of losing business in some sectors for the potential of gaining new markets in others.
As in former WTO accords such as the Uruguay Round, the Doha Round requires consensus across all areas to be completed.