World Trade Organization Director-General Pascal Lamy says the WTO is expected to, later this month, revise downwards the prospects for world trade in 2011. At the same time Tuesday, Lamy told an audience in Delhi that the multilateral trading system of the future will have to address a number of global challenges, including the blurring of the edges between trade policy and others such as exchange rate policies, climate change policies, food security policies or energy policies. Still, the more pressing challenge is to advance the Doha Round.
"Since 2001 the world has seen major transformations, whether in terms of WTO players, in terms of issues in the agenda or in geopolitical terms," Lamy said. "And yet I do not think that the goals we set in Doha have become irrelevant."
Lamy says that three things need urgent attention for the Doha Round to succeed: political leadership; pragmatism and the spirit of compromise; and a spirit of realism.
"In December, at the 8th Ministerial Conference, Ministers will have to talk turkey," Lamy said. "The debate is not about whether we bury the round or whether we fix yet another artificial deadline to conclude it. If we are clear that the issues in the Doha Agenda need to be fixed, the challenge before us is to find the political courage and the pragmatic steps which will lead our members to have an honest negotiation."
According to the WTO leader, the multilateral trading system of the future is likely to continue to feel the pressure of protectionist pressures. But continued support for more open trade will require other forms of protection, in the form of better social safety nets, investment in technology, in education and in infrastructure. He added that the multilateral trading system of the future will also have to take better account of the growing importance of global value chains.
The Director-General also said - the multilateral trading system of the future will have to face the challenge posed by the proliferation of complex preferential trade agreements. The 2011 WTO World Trade Report shows that while there is slow convergence on tariffs, the risk of divergences in regulatory frameworks in preferential trade agreements is growing. He suggested - we will need to fashion a new framework more applicable to these preferential trade agreements.