Unlike his colleagues at the World Trade Organisation, Director-General Pascal Lamy is preparing for a shorter autumn break this year. In his bid to find a solution to get the seven-year-old Doha Round back on track, Lamy will be visiting New Delhi next week and the US soon after. Just a week after the WTO talks collapsed, he spoke to Sidhartha in a telephonic interview from Geneva. Excerpts:
You have been involved with the negotiations for nearly a decade. Isn't it frustrating to see no success yet?
I think any negotiations of this kind with 153 members and a complex agenda are a long journey. The Tokyo Round took six years and the Uruguay Round eight years. That was in a world that was much simpler because a few big elephants decided what to do. The number and complexity of the items on the agenda were less. I would say we have covered significant ground in this round though we have not reached the final milestone.
In the July 2008 negotiating session, we tried to build a bridge that would take us to the last mile. There were 20 pieces to connect and we stumbled on the 18th. However, seven years of (Doha round) negotiations have not been lost. They have led to progressive accumulation. There is a lot on the table, and members realise that. After last week's failure, they have called for the package to be kept on the table. But a deal will only materialise within a single undertaking: nothing will be agreed till everything is agreed.
So, what are the takeaways for you?
In a globalised world, we need a system of multilateral rules so that trade expansion can work to the advantage of developing countries. We have inherited rules from a different period and we need to adjust them to today's situation. What's on the table is potentially a huge package. With the current deal, the customs duty collected on this planet, which today stands at around $ 250 billion, would be half today's level in five years.
Two-thirds of the efforts would be borne by developed countries and one-third by developing countries. This is totally unprecedented in terms of the ambition when compared to any other round and that is probably why it is taking time.
What about the subsidy level in five years?
For the US, the European Union and Japan, the ceilings on trade distorting subsidies would be slashed. With the current deal on the table the reductions would be in the order of 70 per cent for the US and a bit more for the EU, who has the highest ceilings.
Have there been any gains from the talks in July?
The parameters for tariff and subsidy reductions are now reasonably stable, which allows members to see the impact it will have on their exports and imports. But we did not find convergence on three items – the special safeguard mechanism for agriculture in developing countries, the reduction of cotton subsidies and issues relating to intellectual property rights like the convention on bio-diversity and geographical indications.
We have moved and stumbled before restarting and facing a new hurdle. What is the way forward now?
The question is whether we can crack the issue on which we stumbled, that is, on the SSM (special safeguard mechanism), where the parameters could not be agreed. On one side there are members who say that they need a safeguard clause which can be used easily whereas there are others who say the safeguard measure cannot be used to disrupt normal trade.
What we have to do now is to focus on this issue and try to find convergence on the parameters of the safeguard. There is quite a lot of politics on both sides. On the Indian side, there is a notion that safeguard should not be straitjacketed. On the US side, the feeling is that the safeguard is not there to allow countries to negate earlier commitments that they have undertaken. I remain convinced we can find a compromise.
How are you trying to bridge the gap?
I do not know yet. If I knew (laughs)… I will have an occasion to discuss this with my Indian counterpart next week in Delhi and with the US the week after that.
So, SSM is the key?
It is one of the items on the agenda on which we have to find convergence. Members have to negotiate. I can be a facilitator, a go-between, but it remains a negotiation among members. They should try. The Brazilian president and the Australian prime minister have already indicated that they are trying to help.
Isn't there a sense of déjà vugiven that India and the US have held back an agreement?
I am not in any blame game. It is a political reality that convergence is elusive on the issue of the safeguard. At the same time, we also know that WTO members, and in particular the poorest ones, have requested that we preserve what has been achieved and that it does not disappear. That is where we should focus attention now: in fixing the remaining problems.
Is it not a little late in the day since there are elections in many countries including the US and India?
True, many countries, including the two you mention, are entering an election phase. But it is also true that we have a US administration that is committed to concluding it, as is the Indian one. The remaining topics on the Doha Agenda like anti-dumping, fisheries subsidy or trade facilitation are reasonably ripe. It is true that time is running out. If countries want the US to reform the Farm Bill, which is increasing agriculture subsidies further, then the only way to do it is to have a deal in WTO.
Many believe that India is merely trying to score brownie points at home by opposing the proposals on agriculture and by delaying a deal it is harming its trade interests…
On issues relating to domestic political concerns, I have to stay neutral.
There is a school of thought that says that the negotiations are skewed in favour of developed countries since developing countries have to strike a trade-off between agriculture and non-agricultural market access (Nama) with services and the other issues not on top of the agenda?
That's the way the developing countries wanted it. They repeatedly asked for agriculture to be topic number one. They wanted to discuss subsidies and tariff peaks and tariff escalation first. Undoubtedly, a country like India will be a net beneficiary from the cuts in these. India will also benefit from the services negotiations, which are not left out.
India and EU have been pushing for greater opening on services, and in July, the WTO members signalled new offers, including the US which indicated their readiness to further opening up of mode 4 (movement of natural persons under the services agreement).
Barrack Obama recently spoke of labour and environment being part of the agenda and you have yourself, in a different role, argued in its favour…
The agenda of the Doha round was agreed when the negotiations were launched in 2001. The Doha agenda includes environment, and in particular a reductions in obstacles to trade in environmental goods and services. It is not as if environment is outside WTO. Labour issues are not part of the Doha agenda, although they figure in many bilateral deals and in unilateral systems of preferences that the US and EU apply.
After its opposition to the deal this time, do you see China playing a bigger role at the WTO?
There is a notion in the media that China was absent. I have always said that it is wrong. China has been very active in the negotiations but it does not show it as much as India, Brazil, US or EU. The way the Chinese negotiate is different. It is the Asian way. With the interest that they have, given their size, they also have a huge stake in the negotiations.
There is an impression that you were more eager to clinch a deal this time than some of the trade ministers. Would it be a fair assessment?
(Laughs) WTO members launched this round. They set the agenda. They said the round should conclude by the end of 2008. They have said this. I am just there to help them. They are pregnant. I am only the midwife, I can only go as far as members want.
Once there is agreement on SSM, how long will it take to clinch the deal on the other issues?
It depends on if and when we find a bridge on the SSM. In any event, the question is not about the clock. It's a substantive decision to be taken by all members.
