Doorstop interview with World Trade Organization (WTO) Director-General, Pascal Lamy
Subjects: Doha Round, protectionism.
Transcript - E&OE
9 February 2010
SIMON CREAN: We are privileged to have Pascal in our country at the start of a very important year for concluding the Doha Round. The G20 leaders have set 2010 as the year by which they want it concluded.
Pascal has just spoken to the Friends of Trade, a group that I've convened in the Parliament from both sides of the House, advocates and supporters of the importance of trade. Clearly, trade is an economic stimulus. It's a stimulus that doesn't hit the fiscal side of government. It puts money in people's pockets because it reduces duties. It also has a multiplier effect.
Secondly, that 12 months ago, there was a lot of talk about concern of return to protectionism in the main, the rules based system that the WTO overseas has fended off what were considered to be very serious protectionist tendencies. Some emerged, but in the main they were contained.
So, as we go forward into this year, it's a great opportunity to, not just engage the parliament, but to have discussions about how the round might proceed. We have, as a result of the ministerial meeting last December, a requirement for a stocktake in March and thereafter, there are some important international engagements that are - that exist in the lead-up to the G20 meeting in June. There's the Cairns group meeting, there's the OECD meeting, there's the APEC meeting. We're hoping to use all of these opportunities to inject the necessary political will. So welcome Pascal, and I'd invite you to say some introductory words and then we're over to questions.
PASCAL LAMY: Thanks Simon. Well addressing Australia about trade is addressing friends of trade, which is one of the reasons why I appear here sort of once a year.
In order to move a negotiation like the Doha Round, you first need to make sure your friends are on board, and the answer here in Canberra is certainly yes, including by this course, this friends of trade, with whom we've just spent an hour of discussions.
Not surprisingly, given that Australia is probably one of the best examples of a trade opening working for the population. If you look at the numbers, this country has hugely benefited from trade opening, not that this hasn't triggered from time to time a bit of a reshuffling of this bit or that bit of the economic fabric, but overall it has worked.
And I think there are many countries on this planet who are looking at how Australia has been coping with this, including with a proper set of domestic policies. Emerging countries are looking at that very carefully, so it's a success story, and in order to gather the necessary political energy to conclude this round, sort of 20 per cent of the job that remains to be done, we need to strategise a bit and to make sure, and we will do that today later with both Simon and the Prime Minister, and make sure that notably in the lead-up to the G20 Canadian Summit in June, this issue is the determination which was there last year, to conclude the negotiation in 2010, is it still there, and if yes, how can we crunch the few remaining nuts. That's going to be very topical, including this stocktaking exercise which we would have at the end March and which Simon mentioned.
QUESTION: Do you share Australia's optimism or is Australia, as per usual, running a bit too far ahead of it now?
SIMON CREAN: We've always got to run ahead of the pack…
PASCAL LAMY: I share Australia's activism.
QUESTION: But not optimism?
SIMON CREAN: Activism…
PASCAL LAMY: Activism. I think that's the proper thing to do. You know, the question whether you're an optimist or a pessimist is a sort of sentimental question. The question is what do you do.
QUESTION: So what needs to happen?
PASCAL LAMY: What needs to happen is I think sort of identify among the few remaining nuts which are the main ones that - the solution of which we need to break through, and that probably has to do with what remains to be done in terms of tariff reductions on industrial goods, and in some cases, on agricultural goods notably with this safeguard for European countries. So, my own sense is that, that's where the focus should be now.
QUESTION: The chief trade negotiator from India is not confident it can be done this year.
PASCAL LAMY: Well that's not what the Trade Minister told me when I met with him in Davos 10 days ago.
QUESTION: So the Indians think it can be done this year?
PASCAL LAMY: Absolutely. And by the way, not only do they think, but they are working for that.
QUESTION: The US representative didn't turn up to the Davos - the full ministerial meeting…
PASCAL LAMY: No, no....
QUESTION: ...what is your sense of the American administrat… the Obama administration's commitment to completing the round this year?
PASCAL LAMY: Well, you know, I take them at their word. That's what they've said last year. I think anybody looking carefully at the trade part of the State of the Union address by Obama was struck by the sort of positive tone on trade, now true. There still is a sort of difficult, domestic political situation and you know, as you may know, the Senate is still, or at least - one senator is still blocking a few important nominations that would lead to the completion of the US negotiating team. So, you know, it's a bit like in sport. If you only have one arm, it's quite difficult to cope with the others.
QUESTION: Pascal, just away from Doha, the Rudd Government decided to keep in place restrictions on parallel imports for books. Do you think that was a backward step for a government that you say is friends with free trade?
PASCAL LAMY: The WTO system is a system which is based on rules. Countries notably in the cultural sector take commitments to open their trade or not. As long as they respect their commitments, I'm fine. I'm not the one to judge whether the commitment of a country should be larger. This is for the country to determine now.
Once they've taken the commitment, sticking to it is the business we're in.
QUESTION: Your view is that the Doha Round - like it is still doable this year - that this commitment is still achievable? Is that your view?
PASCAL LAMY: That's it - I mean at a technical level, as an expert of trade negotiation with a bit of experience, I can tell you it certainly is doable.
The level of rightness of looking at what's there is perfectly doable. Now, whether there is a sort of, you know, political sort of spasm of energy, that then leads to cracking these few nuts, that then open the way for the whole conclusion, that's not for me to say. But it certainly - it certainly is technically doable.
QUESTION: What gives you hope this year that, you know, hasn't given you the hope - well we haven't seen the progress for the last three years?
PASCAL LAMY: Well I won't agree on that. I won't agree on that. Last year, was a year of slow progress, but that was progress. Right, we had, for instance, you know, this Big Banana deal which has - took 20 years to get to solution to that. And mind you, the number of countries involved in the sort of domestic interest in this were pretty sharp.
So there has been progress, not enough. I mean it still is too slow, but I wouldn't say there hasn't been progress and what's for sure, is that - and that's important in international trade negotiation, there has been no stepping back from what's on the table.
QUESTION: Mr Lamy, who - are there are any lessons to be taken from the problems of the consensus-based system that was evidenced in Copenhagen in terms of climate change, whether you've drawn anything into how you'll manage the consensus issues to pull together for this year in Doha?
PASCAL LAMY: Well we've certainly given a lot of thought to that in the WTO and our - I mean our view and the view of the members for the moment is that in the international system, there is no real substitute to consensus. The notion that in WTO people would take decisions by a majority vote - even a trade weight as a majority vote - is certainly not on the cards now.
Then the question - the real question is how do you build consensus? And that's the tricky issue, because innovatively you need smaller ropes of countries adjust the specific conversions and then you need the proper enlargement of this sort of system of consenting circles, which is, by the way, one of things that didn't work in Copenhagen.
In Copenhagen you had the sort of core group understanding, but it's the moment where this core group understanding had to be enlarged to other circles that didn't work.
Now, in WTO we have now a system which - of consenting circles which has proven to work. But true, it's time consuming and complex, but I don't think - although as you may know, I'm a fervent supporter of global governance, the notion that the international system would work like domestic systems where the majority rule, I don't think that's for now.
QUESTION: Mr Lamy, can I just ask for your comment on Mr Crean's view about protectionism?
You - or Mr Crean present a very optimistic view of what's happened to world trade.
PASCAL LAMY: No, on this - I mean on this Simon is in the perfect orthodoxy.... We've published regularly, each quarter last year, a monetary report that gives a snapshot of the situation, qualifies it.
We'll keep doing it this year because I still believe we're not out of the woods.
But this notion that, for the moment, at this stage, the system has resisted this big wave of economy crisis, I think is absolutely correct. We've had a few slippages here and there, much less that we've expected.
QUESTION: How important is the conclusion of the Doha Round to containing those glitches in the future?
PASCAL LAMY: I think it is important, because when an insurance policy works, and you've got the fire brigade at your door, the notion that you're going to renew it and even subscribe a bit of a higher protection, I think, makes lots of sense.
SIMON CREAN: And in fact we strengthen the insurance, because the dairy subsidies would not be possible in the future, as they have been in the last year, and they've now ended.
[ENDS]
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