WTO Invites Public To Analyse Multilateralism Crisis And Look For Ways Forward

There is no way around the fact that multilateralism is struggling and the director general of the World Trade Organization was not about to dodge the issue at yesterday’s opening of the annual WTO Public Forum, as its theme this year is to assess the crisis. But that did not shake his optimism, he said.

The 2012 WTO Public Forum is taking place from 24-26 September and is gathering governments, non-governmental organisations, academics, the private sector, and students to cover a wide range of issues such as agriculture, preferential trade agreements, emerging economies, and the deadlock in the Doha Round of negotiations.

“We have proven ourselves to be up to the task before, and we can be up to it again,” said Pascal Lamy, director general of the WTO in his opening speech, referring to the current crisis. “The WTO, in many ways, is one of the most successful examples of rules-based multilateralism at work,” he added. “Its capacity to administer and enforce the global trade rules, including the present crisis.”

The WTO, unlike many United Nations organisations, has teeth to enforce its rules, but now seems to be grinding them.

Changing World, WTO Lagging Behind

The world is changing, Lamy said later, as global challenges are increasing and the multilateralism system which was adequate 20 years ago cannot address them. The institution, which Lamy compared to hardware, is not the main problem, he said, but the software is obsolete, or perceived as obsolete by new players, he added. There is a feeling among emerging countries that the system was built by western powers and they would rather prefer software written while they are around the table, he said.

Micheline Calmy-Rey, former president of the Swiss Confederation, said trade is global with 60 percent of products that are traded globally not being final products. Switzerland, she said, is a foreign trade “living example.” The country, she said, invests in high value-added products, such as watches and pharmaceuticals, which it both exports and imports. The Switzerland also is the 4th largest exporter of coffee in the world.

For eBay vice chairman and chief financial officer, Nicholas Staheyeff, the work of the WTO has led to an increase in trade over time in their business. He said eBay is working mainly with small businesses and it is important for the WTO to move forward so that international trade is facilitated. eBay, he said, is working with its customers to try and solve some difficulties, in particular barriers that prevent them from growing their businesses.

In Europe, Staheyeff said, a seller from the United Kingdom does not know how the return policy in Germany works, or what the consumer rights regulations are in other countries. There are logistical issues related to small parcels when post offices do not talk to each other, he said.

“Our business is moving so fast that it cannot wait,” he said. eBay relies on governments and trade organisations to facilitate global trade, but if they do not, the company takes its own measures, such as building a shipping platform from Asia to the United States, he said.

Lamy said eBay is a good example of the changing world. “On eBay, there is no distance,” he said. The logistical side of eBay – with goods needing to be shipped from one side of the world to the other – has not changed a lot, he said. Transport costs have been reduced but custom procedures are still in place. The system has not adjusted to that sort of reality, and there is a need to adjust and assess the areas “where we are lagging behind,” he said.

WTO Activities Below Geopolitical Radar

Lamy said that the WTO has to live with geopolitical developments and it is easier to work on issues that are below the radar screen of major players.

It is obvious for anybody following the US presidential campaign and reading Chinese press that there is a geopolitical tension with ups and downs between those two countries – with more ups than down at the moment, Lamy said. This is impacting WTO activities, he said, noting, “We do not operate in isolation from geopolitical developments.” There is a necessity to look at issues which may be on the radar screen of the US Congress and the Chinese Politburo.

Doha Round: “The Zombie Haunting the Corridors of WTO”

During a session on preferential agreements and whether they are “guardians or gravediggers of the WTO,” Winand Quaedvlieg, vice-chairman of the International Relations Committee at BUSINESSEUROPE, said he was worried about the Doha Round impeding the work of WTO and that it should be distinguished from that work.

“It is unthinkable for us to be without the WTO,” but the WTO without new trade agreements is weakened, he said. He called for a realistic new WTO trade agenda, which does not call to work on everything at the same time, and to be aware of the “zombie in the corridor of WTO,” blocking the rest of the work. He suggested to “park it” and move on with certain negotiations. In particular, work should be done on trade facilitation, he said.

For Naoko Munakata, director general of the Multilateral Trade System Department, Trade Policy Bureau of Japan, free trade agreements (FTAs) can be building blocks but the role they can play is limited as they do not extensively cover the global supply chain and tend to draw attention away from multilateral negotiations.

FTAs could help the multilateral efforts, for example in sharing basic ideas, she said. Earlier, she said Japan ratified the Anti-Counterfeiting Trade Agreement last month and hoped the agreement would enter into force as soon as possible. She said she hopes the agreement will gain new members and one day come under the WTO system.

Fernando de Mateo, ambassador and permanent representative of Mexico to the WTO, said the Doha Round should not be parked at this time and work should still be done to reach agreement. Input from other agreements could be useful to start moving again, he said.

Earlier in the day Lamy said that there “should be more communication between the multilateral brain and the bilateral brain.”