The World Trade Organisation (WTO), was set up 20 years ago with the aim of creating a prosperous and unified global trading block. That has not happened.
Meanwhile unilateral trade agreements – such as the one about to be negotiated between the European Union and the United States – are threatening to make the WTO irrelevant.
Euronews journalist Fariba Mavaddat raised that issue with outgoing World Trade Organisation Director General Pascal Lamy. She also asked about the mark he has left on the organisation after eight years in charge, and where he sees it heading in the future.
Fariba Mavadda, euronews: “Mr. Lamy, to what extent do you see yourself, your vision and your policies responsible for the present status of WTO?”
Pascal Lamy: “Well, I don’t think my starting point would be the same as yours. Your starting point is that WTO is becoming irrelevant. The amount of world trade is roughly twice what it was 10 years ago. Has this worked for development? Yes. The share of developing countries in international trade, the contribution of trade opening, trade expansion to their own development has been astounding.”
euronews: “So why has the Doha round (of trade talks) died a painful death?”
Lamy: “I would not agree that the Doha round is dead. In a way, it is deadlocked but not dead. And by the way..
euronews: “Then why is it deadlocked?”
Lamy: “It is deadlocked because the world has changed very rapidly.”
euronews: “Have you changed with the world?”
Lamy: “Of course we have contributed to these changes. The main driver of change is technology and development. Trade has its own contribution to that, not least because it is creating efficiencies which then end up into the pockets of people who will become less poor, who can spend more and grow their economy.”
euronews: “In 2009, you said that you started a fierce fight against protectionism. Now, more and more we see that regional trade agreements are thriving. The latest and most controversial is the trade negotiations that are going to take place between the European Union and the US – a transatlantic trade agreement. Now, isn’t it by nature, by itself, a protectionist step?”
Lamy: “If you look at the sum of these virtual trade agreements, these encompass roughly 80 percent of world trade. And the question is whether this will happen in a convergent way or not. If it does not happen, then it will not work.”
euronews: “Shall we talk about transatlantic negotiations?”
Lamy: “Transatlantic negotiations are just beginning, but again the beginning of a negotiation is not the end of a negotiation. I know of plenty of trade agreements, the negotiations of which have started and so far have never ended.”
euronews: “Transatlantic agreement negotiations started rather badly, with France trying to practice protectionism with regard to its cinema and film industry. Do you think that Mr Barroso, the president of the European Commission, was right in calling France ‘reactionary’?”
Lamy: “Frankly speaking, I think it is a big political mistake. It is a serious misunderstanding because it amalgamates two very different issues. One is cultural diversity. The European Union Treaty recognises cultural diversity as a possible obstacle to market opening because the view is that cultural products are just not like socks, shirts or tyres. The other thing is the vision by some that protectionism is a good thing. And I would not amalgamate these two camps. I totally agree with Mr. Barroso that de-globalisation – this notion that protectionism is the way ahead – is a reactionary attitude. Seen from the WTO, countries keep the capacity or not to open their cultural services if they so want. There is no obligation.”
euronews: “It looks as if non-tariff issues are potential problems in the negotiations.”
Lamy: “I would follow you on this one. It’s not so much that they are a problem. It’s that in today’s world, and in tomorrow’s world of trade expansion, regulatory discrepancies have become, or may become, obstacles to trade, which is why convergence is the main question.”
euronews: “This is a big obstacle because in the economic climate that we are in, you can’t help but protect your society.”
Lamy: “It is not the old issue about protectionism. At the moment half of your exports are imported which is the global economic integration model we live in now. Shooting on your imports has one result which is deteriorating the competitiveness of your exports. So, this sort of protectionism does not work. What we have today is standards, regulations, norms, that are established not to protect the producer but to protect the consumer. What will be at stake is whether Europeans and Americans can share a similar concept of precaution on GMOs, on poultry dechlorination water, on data privacy…”
euronews: “If there is no producer, that is if people are not working in factories and in offices, then there will be no consumers. People wouldn’t be able to buy things if they don’t have jobs.”
Lamy: “The history of human economy development, economic progress – hence social progress, hence poverty reduction – has always worked by substituting less competitive activity with a more competitive activity. What matters at the end of the day is whether this overall is job creating, and the answer to that is yes.”
euronews: “So in a nutshell, you think that the European society as a whole, in crisis at the moment, would evolve itself to prosperity?”
Lamy: “I think this is perfectly doable. The engine for that remains trade expansion. There needs to be conditions which pertain to the quality of domestic policies, of social systems, of education system, of capacity to innovate, to promote entrepreneurship. The countries that have been doing best in globalisation, are the ones who have improved their social systems.”
euronews: “Mr. Lamy, you are going to leave the helm to Mr Azavedo in September. Is he going to continue with your vision?”
Lamy: “I have no doubt that he is the most qualified to do that.”
euronews: “And where is the next stop on your CV, Brussels perhaps?”
Lamy: “I will start thinking what I will do next – while recognising that I am 66 years old, which is not exactly the same problem when you are 36 years old – I’ll start thinking about this after midnight on the 31st of August which is the moment when I will formally handover.”