Rise in trade restrictions now ‘alarming’, Lamy tells WTO ambassadors

For the first time since the WTO started monitoring the protectionist reaction to the financial crisis in 2008, the scale of trade restrictions is a cause for “serious concern”, Director-General Pascal Lamy told an informal meeting of heads of delegations to the WTO on 7 June 2012. He also reported on latest developments in the Doha Round negotiations. This is what he said:

Thank you Madam Chair.

Since the May meeting of the General Council I have been consulting with Members on various occasions, including around the OECD Ministerial, during recent visits to Thailand and China, where I attended the LDC [Least-developed countries] accessions round table and the Global Services Forum, and this week in Kazan, Russia, where I held a number of bilateral consultations on the margins of the APEC [Asia-Pacific Economic Co-operation] Trade Ministers’ meetings.

The central message I have heard is that, given the deterioration of the global economic and trade outlook, 2012 cannot be a wasted year and that it is important that progress is made across the entire spectrum of our activities.

Let me start with the recent publication of our monitoring report on trade and investment measures taken in the crisis, which we do ahead of the G-20 meeting [in Mexico, 18–19 June 2012]. A report concerning measures by the entire membership will be sent shortly to all of you too.

For the first time since the beginning of the crisis in 2008, this report is alarming. The implementation of new measures restricting or potentially restricting trade has remained unabated over the past seven months, which is aggravated by the slow pace of rollback of existing measures.

The accumulation of these trade restrictions is now a matter of serious concern. Trade coverage of the restrictive measures put in place since October 2008, excluding those that were terminated, is estimated to be almost 3% of world merchandise trade, and almost 4% of G-20 trade. The discrepancy between the commitments taken and the actions on the ground add to credibility concerns.

This situation is adding to the downside risks to the global economy and what is now a volatile global context.

In such a situation, it is important that we collectively and urgently redouble our efforts to strengthen multilateral co-operation to find global solutions to the current economic difficulties and risks and avoid situations that would cause further trade and investment tensions. This will be part of the message that I will sharing with Leaders at the upcoming G-20 Summit on 18 June.

I hope that all Members can all live up to the commitment made by Ministersat MC8 [The eighth WTO Ministerial Conference in Geneva, December 2011] and elsewhere to keep markets open and resist protectionism in all forms. We also need to remain vigilant and begin to think about creative ways to improve our multilateral transparency and peers review. I would therefore urge that all Members engage in the consultations that the Chair of the TPRB [Trade Policy Review Body] will be undertaking to improve the WTO peers review of the monitoring reports produced by the Secretariat.

Another message which I will be conveying at the upcoming G-20 Summit is the importance of ensuring availability and affordability of trade finance. The Expert Group on Trade Finance as well as the Aid for Trade and Trade finance workshop which took place on 15 May stressed the importance of keeping multilateral development institutions engaged in trade finance, bearing in mind the development dimension of their programs. The permanent existence of a market gap for poor countries requires long-term public involvement, without which crisis intervention would be meaningless. With respect to regulatory matters, there was consensus that the dialogue with the Basel Committee should be usefully pursued on elements of Basel III regulation. Finally, it would be useful to encourage data collection on trade finance by both public and private sector.

The LDC accession roundtable which took place in Beijing last week, which was superbly organized, stressed the importance of completing LDC accession guidelines by July. I do believe such a move would bring greater confidence and trust in the ability of Members to address the specific needs of LDCs. It also saw the conclusion of the last outstanding bilateral deal for the accession of Laos to the WTO. Efforts need to redouble now to conclude remaining outstanding steps towards the accession of Yemen to the Organization.

On the DDA [Doha Development Agenda negotiations] front, and following up on the conclusions at MC8, all Chairs have been consulting with members in their respective areas. Let me focus on the areas where technical work has been on-going since our last meeting.

On trade facilitation, negotiations are continuing constructively at the technical level in line with the work programme agreed in the Negotiating Group in January. This week we have the latest cluster of facilitator-led negotiations, and a number of capital-based officials are in town to consult informally on areas of the text where they feel progress can be made and can then be fed back through the facilitator process into the Negotiating Group. Another cluster of facilitator-led negotiations will take place at the end of this month, to prepare for the next Negotiating Group session in July and the 13th revision to the draft agreement.

At the same time, suggestions have been made on the possibility of launching another needs assessment programme for developing countries and LDCs. This will of course need to be discussed in the Negotiating Group before any decision is taken, but it could help bring the element of resources needed for implementation into the equation in a concrete way and provide the basis for the essential matching up of S&D provisions [special and differential provisions for developing countries] with trade facilitation commitments in the new agreement.

In summary, progress is being made, it may not be as fast as some would like but given the technical nature of the work, and the importance all Members attach to the bottom-up, inclusive method of negotiations, there are no short cuts to be had.

On special and differential treatment, the CTDSS [Committee on Trade and Development special session] Chair has intensified the work and intends to hold weekly informal consultations for the next six weeks until the summer break, focussing on the three areas mandated from MC8 — the monitoring mechanism; the 28 Cancun Agreement-specific proposals; and the 6 Agreement-specific proposals. These informal consultations will be complimented by open-ended transparency meetings to take stock of work, including one such meeting to be held in July.

On the review of the Dispute Settlement Understanding, work has continued to progress — a sign that the Members value and understand the importance of dispute settlement to the System. The negotiating group has held four negotiating weeks since the beginning of the year, including this week. As a result, the group is close to completing the current phase of work, with a further set of meetings scheduled for mid-July. As part of the on-going work, a group of developing countries has recently presented a conceptual paper on issues of interest to them, which is a welcome development.

On the other DDA related issues, the level of activity has been lower, to say the least. While I believe that focusing on a number of development related areas is in line with the outcome at MC8, I believe it is time for the Members to also devote some attention to the other issues. And I do hope that today’s session will bring some clarity on how to do that. Since MC8 I have heard a lot of “talk” about new ideas and approaches. Maybe it is time we see a bit of “walk”.

Let me also briefly foreshadow the message that I intend to send at the upcoming Rio +20 meeting. I will stress, like I have in the context of food security that open trade is part of the solution to our collective sustainability challenges, not part of the problem. I will of course be reporting back to Members on these discussions at the General Council in July.

Let me before I close, draw to your attention two budgetary issues.

The first concerns delays in receiving Members contributions to the Global Trust Fund. Although the overall level of pledges made so far is satisfactory, the WTO’s ability to adequately plan and deliver on the technical assistance programme adopted by Members is negatively impacted by the delays in the receipt of the actual contributions. As you all know we cannot plan on the basis of funds we have not yet received. I would therefore like to urge Members to make every possible effort to ensure that their contributions are received by the Secretariat as soon as possible.

Finally, in the interest of transparency I would like to inform you that the Secretariat has begun carrying out a horizontal review of possible improvements in the area of translation, printing and distribution of documentation as well as in the organization of meetings and interpretation, in order to achieve the budgetary savings agreed with Members at the end of last year and that I will be reporting to the July Council on the state of implementation of the Decision.

This concludes my report to you.

Thank you Madam Chair.