Former Minister for Trade
Australian Commonwealth Coat of Arms

Transcript - E&OE

25 June 2009, Australian Embassy, Paris, France.

Press Conference: Mr Simon Crean and Mr Pascal Lamy, Director-General of the World Trade Organisation

Topics: OECD meeting, G20 leaders meeting, Doha round

Mr Crean

Thank you very much for being here with us today. I had the honour of chairing an informal meeting of trade ministers in the margins of the OECD meeting that has been concluded here in Paris. An important focus of the OECD meeting was on trade and what needs to be done. This informal meeting of trade ministers was the second Ministerial engagement within the month. The first engagement of Ministers was in Bali, a meeting of the Cairns Group hosted by Indonesia. That was the first opportunity to engage two new Trade Ministers following elections in their respective countries - the Trade Minister from India and the Ambassador, the USTR representative from the United States. The purpose of today was to try to build on the momentum of the Bali meeting because what Bali determined was the desire of Ministers present to re-energise the efforts to conclude the Round. Bali was the first meeting to give effect to the G20 leaders' direction to Trade Ministers to conclude the Round, and the meeting today was the second such occasion. I know Pascal Lamy spoke to a number of you this same time last year and we indicated then that we had generated momentum to conclude the Round. You say, 'what's changed since?' Well, I think three important things have changed since.

Firstly, that initiative out of this meeting last year got us a significant way down the track. Some 80% of the negotiations necessary to conclude modalities were achieved at the Geneva meetings last July, which this counterpart meeting called for. The second thing that's changed of course is that following the breakdown of those talks there was a global financial crisis and this resulted in the new power structure the G20 looking to initiatives which were necessary to expedite recovery to come up with responses as to how we get back into economic recovery. The important conclusion that that G20 meeting came to, was the significance of trade in the equation. Trade is an economic stimulus so if we are to call for stimulus measures to return the world to growth, not only can't one avoid trade, one has to actively embrace it and urge stronger trade liberalisation as part of the solution.

Secondly, the G20 leaders have continually called for an end to the spread of protectionism as a response to the global crisis. Concluding Doha and strengthening the rules-based system provides increased insurance against the spread of protectionism. The third recognition by the G20 leaders is of course is that in the crisis it is the developing countries that have been hit hardest. This is a development round for (them), so all the greater is the necessity to conclude the Round, to help developing countries come out of crisis sooner than would otherwise be the case.

And the third broad change which occurred from this time last year is that we came to realise that putting all the eggs in the basket of one ministerial wasn't of itself enough to conclude the negotiations. We made significant headway but we when couldn't conclude it, what was the mechanism going forward to try and resolve the differences. We've learnt from that and what we've decided is that whilst what we need is technical solutions to close the gaps, we also need a constancy of political engagement - the political will to drive the agenda forward. That's why we initiated the Cairns Group meeting - the Bali meeting; that's why we've had this meeting. There will be another opportunity, hopefully for political engagement around the G8 group of meetings and there are the APEC group of meetings later next month. All of this is designed to give us the interface and the interaction to give a new direction to our officials to conclude the differences, to the point at which the decisions have to come back again to Ministers, and the availability of us as Ministers to be constantly available, participating and supporting and being reported back to.

We need to be a lot more creative in closing the differences and the result of today's meeting was a restatement by Ministers that we now are in the end-game of negotiations, that we direct our senior officials to intensify negotiations in Geneva and work as part of the multilateral process in various formats and to work with the Director-General and the negotiating group Chairs to facilitate it in creative ways the directions that Ministers have given to officials. Also to underscore this with the fact that Ministers remain ready on an on-going basis to be reported back to and to address the outstanding issues. We think we've now got a good mix of the political will and new direction - a direction to our officials to settle the differences and where those differences can't be settled, to come back to us at a political level, and the ability to do that on a more regular basis.

Our aim, of course, is to be able to report by the Pittsburgh G20 meeting that we have made progress in a way that gives confidence to the G20 leaders that we can conclude the Round. This is the objective of today's meeting and we will continue to look for every opportunity we can to advance the agenda to report positively and confidently to that G20 leaders meeting in Pittsburgh. I now invite the Director-General of the WTO, Pascal Lamy, to address you and then we'll take questions. Thankyou.

Mr Lamy

Thanks Simon. Very briefly, what we've seen here in Paris, as we saw in Bali a few weeks ago, is a much better improved ambience for Ministers' engagement. The mood music is now more congenial and it's playing at a faster pace. We now must shift from mood music to dance music. I think that our meeting this afternoon made it clear that all Ministers present want to conclude the Round and they all agree that the crisis takes this from an urgency to an emergency. Especially for developing countries, whose exit from the crisis depends much more than average on open trade.

As Simon said, we now have to articulate a combination between political, ministerial, engagement and technical work in Geneva. On the political side, we have in place a series of meetings, the next one in Italy, on the occasion of the G8 and G8 plus, then Trade Ministers in Singapore for the APEC meeting and then the September G20 meeting. I think there was a broad agreement that we should articulate this so that we can report, as Simon said, progress in the G20 meeting in Pittsburgh.

Now for the technical side, I will shift gear in the technical work in Geneva together with the Chairs of the negotiating group - starting of course with agriculture and non-agricultural market access - but also with other Chairs, with Ambassadors and with experts, so that they can clean the slate for their Ministers to re-engage at the Ministerial level on a limited number of topics some time later in the year. So the name of the game now is articulating this political and technical process together. And I'll start doing this when I'm back to Geneva tomorrow.

Journalist

Both of you have commented on the improved mood of the music, that the atmosphere is better than it was a few months ago. Still, a lot of people are saying that there are a lot of differences about process, bilateral and multilateral discussions and even about substance. How do you see the 'music' or the 'atmosphere' being translated into progress and substance?

Mr Crean

I think those issues that you have talked about have been creating static in their own right, before we got to a discussion about them in Bali and ability to take that discussion further forward today. We have agreed that much good work has been done - an 80 percent achievement factor building on the work that is already on the table. No-one is disagreeing with that being the basis upon which we move forward. So far as the process of moving forward, it has to take place in a multilateral framework. The singular undertaking means of necessity that you can't get an outcome until everyone has agreed and I think also that there is a realisation that, as part of strengthening the multilateral process or clarifying the issues that are still in dispute, that that is going to be assisted by either a deeper bilateral engagement in certain circumstances or plurilateral engagement, that can help the clarification but in the end it has all got to come back to a settlement within the multilateral process.

As for the issues of substance that you talk about, these are of course the issues that the negotiations are desperately aimed at trying to overcome. We know the sorts of issues that still need to be resolved in substance, we know that there can be technical solutions through the multilateral process. But we also know and understand that we have to have the ability to say, have we got a deal that we can sell back home and that is a necessity going to require clarity on the part of what the parameters that are already on the table are capable of translating into different scenarios. Now in the end that is only going to be resolved when everyone is satisfied, not that they got the perfect deal because I think we're beyond the point that anyone is going to be perfectly satisfied but in which they have got something that they can go and sell as a positive movement forward. So I think the new dynamic is the political engagement driving the officials and being able to report it back and the constancy of that flow is going to help us move on the substance. I think the two meetings that we have had have been essential in finding a better understanding about the process.

Mr Lamy

In the same spirit, remember that in the past Rounds of industrial tariffs, agricultural tariffs or even subsidies, reductions, were agreed with an average. That was the deal. And then domestic constituencies were faced with a sort of last minute package which is how the average was constructed. And you know how you can construct an average in many ways. The big difference this time is that there is more transparency and clarity in the process, which I believe, is a plus, even if it makes the life of my (political) colleagues a bit more difficult. But in terms of people knowing what is the outcome of the Round it's a plus. So, given that we know already a large part of what has to appear in terms of tariff reductions in agriculture, in industry and in subsidies, there remains a part of that which still needs to be clarified. Which is where there are flexibilities - agriculture flexibilities and duty free quota free flexibilities, on the other side. There are also things which are very important for some, which are still unclear. For example, cotton subsidies. Now this process has to take place and it is inevitably a complex process but it has to take place. This is why we have to combine the sort of multi-lateral process we need to fix, for instance, the 'barnacles' on the special safeguard mechanism - and we still need to work on that - combining this with what I call before the General Council, "Outcome Testing", which is getting little by little to this clarity so that the value of the final package can be assessed by everybody.

Journalist

Again on the issue of mood music, do you think there is any improvement as a result of the changes in leadership in the US and India? And in terms of the steps ahead of the Pittsburgh meeting, the Indian (Commerce and Industry) Minister, Anand Sharma has suggested hosting a meeting in Delhi before the Pittsburgh summit. Has he elaborated on that at all, when will it take place and who will attend?

Mr Crean

I would not put it down to the personalities or the change in Government per se. I would put it down to the fact that the G20 leaders last year reinforced this year in London that trade had to be part of the solution to geting the Doha round concluded. The difficulty we have had as Trade Ministers responding to that direction is that we have had to wait for political processes to clear the ability to engage the dialogue at the political level. I talk about the processes associated with the confirmation of the USTR Ambassador and of course the Indian elections which of course didn't conclude until the end of May. What was good about Bali was the preparedness of both those new ministers to attend. Minister Sharma, I might say, decided within 10 days of being sworn in, not just to attend but to engage actively and the reason both ministers were engaging actively is because they understood, they like all of us, the mandate given to us by our leaders from the G20 process. They too were responding to that call.

I think that the big dynamic that has changed is that leaders have said that we want Doha concluded and we stand ready to assist in bringing it to that conclusion. On the point of Minister Sharma's offer, it was very pleasing that he did propose that, that was put on the table today. We need to consider the logistics but the timing of that prior to the Pittsburg meeting could and would be particularly helpful in regard to another mechanism for the political engagement that both Pascal and I are convinced about, and which all the Ministers that participated around the table today are convinced is the new dynamic - that we just have to work more effectively if we are going to bring the round to conclusion.

Mr Lamy

The WTO is member-driven and most of our members have to navigate in electoral waters. So individually the WTO has to navigate in electoral waters - we don't choose that - and our agenda is inevitably influenced by this. We have with the US, India and South Africa, three fresh Governments with strong mandates and that that's one of the reasons why the mood music is changing. Now, we also know that we have elections in Japan sometime this year; that we have presidential elections in Brazil sometime next year; that we have mid-term elections in the US at the end of next year. So inevitably this shapes our timing and it's for us to try and use these 'waters' as much as we can. And I believe that this sort of feeling now that, you know, 2010 is the right time for the conclusion, has to do with electoral waves here and there. It also has to do with the economic crisis and we know by experience that this economic crisis also, will have political and electoral consequences.

[ENDS]

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