Info Service on WTO and Trade Issues (Dec12/01)
3 December 2012
Third World Network
Members, Lamy's panel exchange views
Published in SUNS #7447 dated 28 September 2012
Geneva, 27 Sep (Kanaga Raja) -- A meeting between heads of delegation
and several members of a panel of "WTO stakeholders" formed
earlier this year by Director-General Pascal Lamy took place at the
World Trade Organisation on Wednesday.
In what was described as the first time that heads of delegation and
panellists were having a meeting of this sort, trade officials said
that since several panellists were appearing here at the WTO Public
Forum (25-27 September), members wanted to have a chance to talk with
them and hear their thoughts, as well as to express their views to
The Director-General had announced the composition of the "WTO
Panel on Defining the Future of Trade" on 13 April, whose task
is to examine and analyse challenges to global trade opening in the
twenty-first century (see SUNS #7351 dated 17 April 2012).
At a subsequent meeting of the General Council on 1 May, several key
developing countries expressed reservations about the panel and made
clear that the panel and its outcome would be on the Director-General's
own responsibility (see SUNS #7362 dated 3 May 2012).
A number of civil society organisations also strongly objected to
the panel of "WTO stakeholders" and in a letter to Lamy
dated 25 June, they said, amongst others, that the panel - more than
half of which is composed by representatives of the business sector
- "does not have the global legitimacy of the stakeholders -
those who will be impacted by the future of trade negotiations within
the WTO - to be able to propose a legitimate path forward for future
The civil society groups had called on Lamy to dissolve the panel,
given that any proposals that emanate from it would lack legitimacy
(see SUNS #7398 dated 27 June 2012).
The panellists on the "WTO Panel on Defining the Future of Trade"
are: Mr. Talal Abu-Ghazaleh, Chairman and Founder, Talal Abu-Ghazaleh
Overseas Corporation, Jordan; Ms. Sharan Burrow, Secretary-General,
International Trade Union Confederation, Brussels; Ms. Helen Clark,
UNDP Administrator, New York; Mr. Thomas J. Donohue, President and
CEO, US Chamber of Commerce, Washington; Mr. Frederico Fleury Curado,
President and CEO, Embraer S. A, Brazil; Mr. Victor K. Fung, Chairman
of Fung Global Institute and Honorary Chairman of the International
Chamber of Commerce, Hong Kong, China; Mr. Pradeep Singh Mehta, Secretary-General,
CUTS International, India; Mr. Festus Gontebanye Mogaw, Former President
of Botswana; Ms. Josette Sheeran, Vice Chairman, World Economic Forum,
Geneva; Mr. Jurgen R. Thumann, President, BUSINESSEUROPE, Brussels;
Mr. George Yeo, Former Foreign Minister, Singapore and Vice Chairman
of Kerry Group Limited; and Mr. Fujimori Yoshiaki, President and CEO,
JS Group Corporation, Tokyo.
(Trade officials said that Ms Clark, Mr Donohue, Mr Fung, and Mr Yeo
were not present in Geneva for the Public Forum.)
According to trade officials, at the meeting on Wednesday, Lamy outlined
the mission statement of the panel and said that it was looking at
issues pertaining to sustainable development, economic growth and
poverty alleviation, as well as stressing the "big picture".
The panellists were looking at "boxes of issues" and trying
to figure out what the key stakeholders in the trading system would
like to see coming out of the WTO and how the overall outreach can
be improved in terms of explaining how the trading system works.
According to trade officials, Lamy stressed that this is not about
the Doha Round and looking into WTO procedures, but about the "big
picture" and what it is that can be done to improve the landscape
in the twenty-first century so that the WTO can work more effectively.
Several delegations spoke following the remarks by the Director-General.
According to trade officials, Kenya said why is it that up until the
Uruguay Round, the seven previous rounds had lasted for a much shorter
duration - two years or less. The Uruguay Round took eight years,
and did not complete all of its work. It had to shift some of the
work into the built-in agenda. Why is this the case and can the panel
look at this and figure out what it is that has led this to be such
a problem, it said.
It had some suggestions, one being having a lighter negotiating agenda
which would facilitate full participation of members. The Doha agenda
is a heavily loaded agenda and there needs to be a way to use Article
47 of the Doha Declaration (dealing with the single undertaking) so
that there can be a front-loading of issues, i. e. perhaps an early
harvest, as well as back-loading without undermining the nature of
the single undertaking.
The Enabling Clause could be advanced and that this could help developing
countries to participate in global value chains. There needs to be
some bench-marking of trade and poverty alleviation, and it might
help as well if the impact of trade on generating jobs and development
can be looked at, it added.
Australia praised the notion of the panel and said in these challenging
times the multilateral trading system and the "big picture"
needs to be looked at. We have been depending on the multilateral
trading system as an engine for economic growth, development and employment.
If the multilateral trading system is struggling, that means the overall
international effort to address these issues is not delivering as
While there is a stalemate in the Doha negotiations, other elements
of the work including dispute settlement and the regular committees
are functioning. However, the overall progress in these areas (apart
from dispute settlement) has been rather modest, it said, adding that
any guidance from the panel that might impact on WTO work would be
Mexico, praising the creation of the panel, said that there is a financial
crisis and "we are not out of this yet". Trade growth has
decelerated (in 2011) and growth expectations have been further revised
downward this year. There is need to begin to look at some of the
changes in the way in which the world is functioning now with respect
to trade and global value chains (GVCs).
People need to look at things from a less mercantilist point of view
- and see not only exports as good, but that imports are good as well.
Mexico has opened its market and it has had great benefits for its
citizens and businesses.
Mexican citizens are now better dressed, and have better quality clothing
and footwear than at any time in their history and this is due to
the fact that these items are now much more affordable than they had
been. Imports of services are very important as well, it added, noting
that 75% of imports in services are intermediate services.
In the regular work and dispute settlement, the WTO is a success story,
but "we are having difficulties with respect to the negotiation
element of the work", and there is need to look at new issues
as well, Mexico said. The panel must bear in mind some of these issues
such as competition and investment. The issues of exchange rates,
trade and climate change, private standards and the challenges of
GVCs should also be looked into by the panel.
Singapore said that it is keen to hear from the panellists on what
they value about the WTO, on the effect on the WTO of the challenges
being faced today. The panel needs to tell governments the way that
they see things.
Brazil said that the WTO is part of the "big picture". There
is need to ensure that the disciplines keep up with what is happening
today; in fact, some disciplines can be updated through the regular
work, but this is rather slow. While the dispute settlement system
is working, the regular bodies are not working as well as they could,
inching forward in terms of any updating of the rules. The only way
to update disciplines in bold leaps is through negotiations, and this
is not working at all well.
On the Public Forum's topic, "Is Multilateralism in Crisis?",
Brazil said that it is not sure of that but certainly "we are
in a transition period" and it is not a question of who needs
to contribute more. It's not a question of emerging markets needing
to contribute more, or a question of the level of ambition. The problem
is "we have conflicting agendas" and at a time when you
have a more democratic system with more players, and you have a series
of conflicting agendas, it makes arriving at a consensus much more
So, how do you produce more disciplines at a time of conflicting agendas,
Brazil asked, and in terms of the negotiations themselves, how do
we come up with a common agenda.
In terms of what needs to be done, Brazil pointed to three areas in
the negotiations, namely, services, goods and the food industry. Noting
that some say that the food industry represents only 7% of world trade,
it said that it is important to know that trade is only a portion
of what the food industry is involved in.
It said even non-trade elements of the food industry is affected by
distortions and subsidies that are taking place in the international
arena. A number of countries would like to see more trade in agriculture
but this is difficult at the moment, "and if we are going to
be able to ever succeed in the negotiations, all three of these areas
must be addressed."
The European Union agreed on the need to look at the "big picture",
saying that there is need to preserve the negotiating function of
the WTO. There is need to properly communicate the benefits of the
multilateral trading system, and the need to find a link between regional
trade agreements (RTAs) and the multilateral trading system. There
is also need to ensure that the RTAs are disciplined in a way that
makes them compatible with the rules and disciplines of the WTO.
On the future of the Doha Development Agenda (DDA), the EU said that
what needs to be done is to find a way to deal with these hard-core
issues, and how the Doha Round can be concluded. "We have a path
ahead of us that came out of the last ministerial conference [MC8
held last December] and there are some things on which we can get
agreement" in the areas of development and trade facilitation,
but solutions need to be found to unblock the negotiations in key
There is also need to start addressing global challenges. While the
DDA should not be replaced, there is need to begin to discuss some
of the new issues, including food security, environment and climate
change, raw materials and energy, and GVCs. There is need to look
at the "big picture", but there is also need to look at
the WTO activities as well.
One of the things that the EU would like the panellists to look at
is how the WTO can better interact with other international organisations,
specifically the International Labour Organisation (ILO).
Saudi Arabia said that the WTO is an economic organisation that should
not be used as a political tool. The accessions process needs to be
made more flexible and that the WTO should be working more closely
with other international organisations.
Norway said that the multilateral trading system rules have prevented
protectionism from breaking out on a wide scale, but it is true that
some governments are beginning to use more flexibilities as a means
of protecting domestic producers. The question remains how do you
open markets in the twenty-first century.
There are a lot of bilateral and regional trade agreements, it noted,
adding that it was not sure how much value they would add to what
Brazil had suggested with respect to opening markets or addressing
disciplines across the three areas (services, goods and the food industry).
How can those three areas be de-blocked, it asked, saying "are
we seeing a change in paradigm." Is there a moving-away from
the multilateral trading system towards blocs and is this the way
to open markets in the twenty-first century? If that is the case,
what implications are there for global governance, and what are the
responsibilities of the major economic players with respect to the
Japan said that there is need to look at the impact of GVCs and to
look at WTO rules in terms of how they may affect these chains. There
is need to examine ways of levelling the playing field for members
and to be able to reflect in the discussion the change of paradigm
that has come about as a result of the economic conditions in which
we are placed. "We need to discuss whether there are ways that
business can be involved in the negotiating process through a more
Lesotho said that there is no other way forward in the twenty-first
century other than through having trade flows move effectively, but
there is need to update the framework of the multilateral trading
system. There are other policies that are required for poverty alleviation
beyond trade. There is need to preserve the bottom-up approach in
terms of WTO decision-making and to be more flexible with respect
to accessions and to shorten the accessions process for developing
countries. The financial crisis has dealt a big blow to trade and
what is being seen now is people using exchange rates as a tool which
at the end of the day is protectionist.
It stressed that development must be factored into anything coming
out of this (the panel's) report and the only way that the global
economy can tap into untapped meaningful potential is by tapping into
the potential in developing countries.
The Philippines said that the key questions are how and why trade
opening benefits the people. There is need to translate the benefits
into a narrative that the man in the street understands. There is
also need to ensure that trade unions and workers see that trade can
deliver jobs for them. There is need to have a stocktaking of the
current situation. With respect to GVCs and RTAs, there is need for
greater coherence among the key actors.
Chile said that the negotiating function of the WTO is not working,
but that the other two areas (regular work and dispute settlement)
are. The negotiating function is important and if the problems here
are not addressed, the risk is that it could contaminate the work
in the other two pillars as well.
Eighty percent of its GDP is linked to trade and it is important for
Chile. There is need to strengthen the framework of the WTO and suggestions
on this would be very important. There is need to find a way where
the system is strengthened for all, and by all.
Switzerland said that governments provide the legal framework for
trade and they are very keen to create an attractive environment for
business. So it is important for governments to understand what business
really wants. Does it want more market opening or protection at the
borders, or ways to improve the way GVCs function, or stronger multilateral
Colombia said that there is need to find ways in which the WTO fits
into the "big picture". There is need for more trade and
members are struggling to deliver on this. There is need for constituents,
businesses - large and small - workers and consumers to see benefits
from trade. This is true across services, goods and food areas. It
is beyond its comprehension why an area as important as food continues
to be as distorted as it is today.
Haiti said that some of the work of the panel must focus on the plight
of the least developed countries (LDCs). Something between a quarter
and a third of the world's population are living in LDC conditions.
"We cannot settle for a three-tiered world." There is need
to be able to find ways to strengthen these countries because the
strength of any chain can only be measured by the strength of the
It pointed to some things like the Enhanced Integrated Framework that
are working but much more needs to be done. The multilateral trading
system needs to be strengthened so that it better serves the interests
of the LDCs.
Turkey said there is need to call on the stakeholders "to ensure
that they really do understand that they have a stake in what we do."
It is interested in the value chain, and the system needs to be strengthened
to make people aware that this is a system that holds benefits for
The United States posed three questions to the panel, namely, how
do we build consensus. The WTO is a consensus-based organisation but
we have not fully grappled with the fact that for the first time in
the history of the multilateral trading system, the biggest players
are not like-minded. So, we haven't begun to grapple with the implications
of all that means, it said, adding that it saw at the ministerial
conference last December that "we didn't really have a consensus
on how to deal fully with the single-undertaking".
It said that there is need now to try to find ways where new kinds
of consensus can be generated and 2012 has been all about the search
for these other kinds of consensus. It said there has been some minor
successes like the LDC accession (improved guidelines). The key question
now is how to form consensus in this multi-polar environment.
It also asked what is the evidence that trade supports development.
It said that it takes it for granted that this is correct. It was
something that was an assumption of the GATT and WTO, from its origins
and through its history, but it sees that there are some people who
don't necessarily take this for granted, and may not even believe
this is helpful for development.
There needs to be some analysis done on this, it said, noting that
there are two types of countries emerging - a group that is turning
inward and raising barriers and a group that is turning outward and
lowering barriers. This is not a North-South issue.
There are a lot of opening in developing countries, so what is the
evidence of these two models, are they succeeding or are they not
succeeding, it asked. There is need to address the "global schizophrenia"
about trade. It is not true to say that there is no trade liberalisation
going on today; it is just not going on at the WTO. Why is there trade
opening bilaterally, regionally, but not in Geneva?
Egypt said that there is need to strengthen the multilateral trading
system. There has been discussion about ideas like trade and environment,
investment and competition coming onto the agenda of these so-called
twenty-first century issues. It recognised the importance of these
issues, "but before we begin to embrace these issues, we need
to finish with the twentieth century issues that are on the table
currently with respect to the Doha Round."
El Salvador said that governance and coherence are of great importance
but the panel needs to look very closely at the issue of coherence
between international organisations and how they are working together
to advance sustainable development. It is very important to get a
balanced outcome and that can be done across a greater coherence programme.
Argentina said that there are certain issues that need to be examined
that have not been looked at in any great detail. One of these issues
is the impact on the food industry of bio-fuels policies. Bio-fuels
policies are a major part of agriculture and we see a broadening of
those who benefit from agriculture distortion. It is not only producers
who have benefited but also some consumers of bio-fuels. There is
an impact here as well on commodity prices.
On GVCs, Argentina agreed that there is need to look at the linkages
between these and trade, but the GVC discussion does not always reflect
the needs of many developing countries. When looking at the question
of GVCs, the role of agribusiness in these global value chains has
not been effectively examined and that needs to take place.
Jamaica asked what stock do business leaders put in new WTO commitments.
Is it their sense that what is being proposed here is something that
would help them in terms of seeking their strategies or do they just
move ahead anyway because we are too slow in addressing what it is
that they find of importance. It would like to know, in respect of
social issues, what it is with respect to the WTO agenda that can
be improved to facilitate job creation.
Hong Kong-China said that the negotiating function of the work has
stalemated. It does not mean that the other areas of the work are
not functioning, but "what can we do here to improve what we
do now, and how do we bring around the negotiating function."
China said it supports the development of global supply chains and
has benefited a lot from these chains. It hoped that more developing
countries will pay more attention to this, so that they too can draw
benefits from the global supply chains. But global supply chains cannot
cover all WTO members, and not even a majority of them.
So, it asked, what should we as members of the multilateral trading
system do to address the remaining issues that might affect the rest
of the members - agriculture, tariff peaks, tariff escalation, and
LDC issues and the like.
"What can we do to get all of the issues that remain on the Doha
agenda back on track?"
The Doha Round is deadlocked, it added, noting that some may think
that the way forward is to do more work bilaterally, plurilaterally
or regionally. "Is this really something that would be of benefit
to the multilateral system?"
India said that trade is important in developing countries as one
of the tools for growth, but it is not the only tool. There is need
to look at certain aspects of trade policy and of trade opening. This
is important particularly in an environment when many industrial countries
are talking about trying to bring jobs back to their countries. It
said that it has benefited from the multilateral trading system, and
was a founding member of the GATT.
It acknowledged the challenges to the multilateral trading system,
pointing out that there are major problems. One of the biggest problems
is how to have inclusive growth and how to reconcile the agendas of
countries with per capita income of more than $80,000 a year with
those that have a per capita income of only $500 a year. This has
to be measured against a backdrop of 157 WTO members.
There is need to find ways to satisfy concerns on employment growth
and welfare gains. This is something we all need to focus on and how
can we use the trading system so that we can open trade for the betterment
of the global community, it said.
Apart from the delegations, several members of the panel also spoke
at the meeting, said trade officials.
According to some trade diplomats, an impression that was left on
the developing countries was that except for one or two members of
the panel, the rest appeared to be either pushing their own corporate
agendas or those of their funders.
The trade diplomats were of the view that Lamy appears to be playing
up these GVCs in an effort to create divisions among the BRICS (Brazil,
Russia, India, China, South Africa) and to get support for the mercantilist
agendas of the US and EU and putting agriculture in cold storage.
The trade diplomats added that the entire panel is perhaps a kind
of a front, and that through the panel the Secretariat will write
a report, and more or less dump, or put aside, the current Doha Round
trade negotiations and developing country issues for the so-called
"big picture" and the undefined twenty-first century agenda.