“There are other battles to fight in the WTO. They may not be of an institutional nature, but they must nevertheless be fought,” WTO Director-General Pascal Lamy told the inaugural session.

“I refer here to the need to rebalance the rules of the Multilateral Trading System in favour of the poor, through the completion of the Doha Development Agenda; and of the need to climb ever higher mountains, by tackling emerging issues such as energy, climate change, and electronic commerce.

“We cannot afford to rest on our laurels in the WTO until our rule-book becomes outdated. Nor can we afford to misdiagnose the impasse in current negotiations as being ‘institutional’,” he said.

Setting the tone for the Public Forum, Mr Lamy introduced the rich menu of trade-related issues that will be the subject of discussions until Friday.

The Forum takes place against the backdrop of a global economic downturn that has shed light on both the value and shortcomings of the multilateral trading system.

The system embodied by the WTO was able to act as an insurance policy against spiralling protectionism, he said. But, for it to be more effective, its rules need to be rebalanced in favour of the poor through a development-oriented conclusion of the Doha Round.

The Director-General hoped that the ideas generated in this year’s Public Forum would enable members to move the multilateral trading system forward.


By: WTO volunteers

Opening session: What’s changing world trade?

SESSION TITLE: The forces shaping world trade: How to use them to help achieve the Millennium Development Goals and contribute to Millennium Development Goal 8: A global partnership for development

The plenary opening focused on the forces shaping world trade and how they can be used to achieve the Millennium Development Goals. The discussion, which saw interventions from heads of governments, representatives of civil society and the private sector as well as the WTO Director-General, touched upon the domestic and international forces that can lift countries out of poverty.

Dame Billie Miller, former Deputy Prime Minister and Minister of Foreign Affairs & Foreign Trade of Barbados, congratulated the WTO’s ability to provide leadership in promoting the linkage between trade and development.

But she insisted that more could be done through the conclusion of the Doha Round. In view of the present crisis and the opportunity it creates to rethink the global architecture of governance, Dame Billie wondered whether re-planning would be made on the existing flawed foundations or world leaders would be able to provide a new structure.

She praised the developments made in recent years with the enlarged G-20 and booming South-South trade, but she expressed concern that the resulting gains would not be used effectively to meet social and developmental challenges. The achievement of Millennium Development Goal 8 (MDG-8, “a global partnership for development”), which underpins all the other goals, depends on strong political will, she said and expressed scepticism that serious commitments will be made at the up-coming Millennium Development Goals Summit.

Oxfam’s Executive Director, Mr Jeremy Hobbs, described how the crisis has unravelled some of the developments achieved in the latest years. However, he stressed that the recession experienced in developed countries could not be an excuse to avoid engaging meaningfully in achieving the Millennium Development Goals.

He noted with regret that the stalling of the Doha Round is a missed opportunity to rebalance international rules in favour of developing countries. The resulting boost in trade, investment, good governance and food security would contribute significantly to alleviate hunger, boost employment and reduce poverty, he said.

Mr Ravi Kant, Vice-Chairman of Tata Motors, gave an insight from the private sector. He noted the structural shift in the global economy towards the emerging economies, mainly India and China. The high growth rate of these countries — led among other things by improvement in communication and road connectivity — has not come without contradictions, he said.

For example, growth in India has not been adequately inclusive. Despite the increase in levels of wealth and the technology advances, 42% of the population lives below the poverty line and 40% still remains illiterate.

He advocated an economic growth model that would include all sections of the population and whose focus would be on:

• manufacturing for the creation of employment;

• innovation leading to affordable goods and sound primary education;

• collaboration between nations, governments, businesses and academia to achieve the tasks that no single entity can achieve alone in an interconnected world.

The former President of Botswana, Mr Festus Mogaes, emphasised small and vulnerable countries’ reliance on a multilateral trading system governed by fair rules.

“To be weak is miserable”, he said quoting Milton’s Paradise Lost. He identified “old-fashioned self-interest” as the main force determining trade and as the reason why weak countries place their faith in international organizations to be able to have a voice in shaping global economic governance.

His country, like other middle-income countries, looks to the WTO and the Doha Round to provide them with an improved trade climate conducive to development.

Mr Pascal Lamy brought some more positive thinking to the discussion by noting that so far the overall WTO scorecard on Millennium Development Goal 8 (“partnership”), development and poverty reduction has been positive, although with some exceptions.

The multilateral trading system was able to weather the crisis and protect developing countries from protectionist waves, he said.

The increase in South-South trade and the creation of global production chains have created enhanced opportunities for growth. However, more can be done to fix imbalances embedded in present rules through the Doha negotiations, he went on.

In the meantime, the WTO’s response has been successful in addressing developing countries’ trade capacity needs through Aid for Trade commitments, the Enhanced Integrated Framework (EIF, for assistance to least developed countries), training and technical assistance.

The debate from the floor that followed moved the discussion towards the need to eliminate inequalities. Global governance issues such as how representative is the G-20 were also discussed, some saying that the G-20 will maintain its relevance as long as it keeps representing developed and developing countries alike.

Rounding-up the session, moderator, Mr Gideon Rachman, Chief Foreign Affairs Commentator of the Financial Times, asked each speaker to indicate what in their view is the major force at play today.

They agreed that innovation is a major factor in determining the future of world trade. The dynamism of East Asian economies, changing oil trade patterns, geopolitics and social demand were also indicated as important elements that would direct trade patterns.

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Lunch session 1: Government procurement rules seen benefiting business and development

SESSION TITLE: Open and rule-based global markets: The role of government procurement and the Government Procurement Agreement

The WTO’s rules on government purchases, which are signed by only some members, can help business through access to procurement markets, benefit development and improve governance, according to panellists in the first lunch session of the Public Forum on 15 September.

The panel discussed the current status of the regulatory framework on government procurement and the pending revisions to the Government Procurement Agreement.

Introducing the session, Dr Hubertus Erlen, Chairman of Businesseurope’s International Relations Committee, said public procurement accounts for 30% of global exports (OECD estimates), 10–15% of developed countries’ GDP and perhaps even more for developing countries (WTO estimates). Despite that, he said, many government markets remain closed to foreign enterprises.

Mr John Clarke, acting head of the EU delegation to the WTO, said he is optimistic that more countries that have not signed the WTO’s Government Procurement Agreement will open their public procurement markets. China is working on revised procurement rules, and this is promising not only for market expansion but also in the context of Doha Round negotiations, he said.

WTO Deputy Director-General Harsha Vardhana Singh emphasized the importance of a strong framework based on principles of good governance — including transparency and openness — and unbiased competition. As more and more countries sign the Government Procurement Agreement, he said, they will start seeing the benefits and encourage others to follow suit, including countries that are not members of the WTO itself. The agreement provides a strong basis but it needs to be improved, by increasing its scope (what it covers) and depth (of the rules) to allow for market expansion and reduce the present numerous exceptions.

Japan’s Deputy Permanent Representative to the WTO, Mr Atsuyuki Oike, stressed government importance’s as the major actors and regulators in public procurement.

Representing the interests of private enterprises, Ms Catherine Minard, Director for International Affairs at MEDEF (Mouvement des Entreprises en France), said it is important for procurement rules to apply not only nationally, but also at subfederal and subnational levels, further contributing to market expansion.

In the debate that followed, a participant expressed concern about the implications for developing countries. Deputy Director-General Singh reminded the session that under the Government Procurement Agreement developing and least developed countries can still maintain preferences for domestic suppliers, which may help them protect local innovations. He reiterated his optimism that upcoming changes will bring market expansion due to enhancement of rules, and increase the number of countries signing the agreement. The two will have a multiplier effect, he said.

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Lunch session 2: Speakers mull alternatives to stalled Doha farm deal

SESSION TITLE: Agricultural trade and investment rules
for the 21st century

One major consequence of Doha Round stalling is that no advance has been made on agricultural trade rules, while global food security is at stake, speakers said.

Sustainable farming and a responsible storage mechanism could represent a solution but still the international community must support and facilitate agricultural trade for developing countries without over-relying on the free market, they said.

Moderator Caroline Dommen of the Quaker’s Geneva office direcetd the debate to agriculture’s importance as the basic source of food. She suggested that there are different techniques and farming models that could be adopted by developing countries to improve their production efficiency.

She added that it has to be established how the WTO and the commitment to a multilateral trade environment could help those countries to increase their food reserves.

Mr Ben Hobbs of Christian Aid pointed out that the larger share of people affected by hunger is composed of farm households. The majority of them are small farmers with on average 1.6 hectares of land but they still represent the backbone of their countries’ economy, he said.

According to Mr Hobbs, low productivity is not related to limited economies of scale but to the farming strategy itself, which is based on monocropping, over-reliance on external inputs (fertilizers and pesticides) and low consideration of the environmental impact. A shift towards organic alternatives to fertilizers and increasing diversification could represent a solution.

Sustainable farming, however, should be backed by the Government which is responsible to target support for sustainable farms and assure security of tenure that will incentive higher investment on the land, he said.

Professor Daniel Ugarte of Tennessee University pointed out the similarity embodied in the rules that govern multilateralism and food policies: transparency, non-discrimination and peaceful settlement of disputes.

However, a distinction should be made, he said, as agricultural resources are unequally distributed and environmental shocks related to food commodities directly involve national security. When major producers are affected the implications are dramatic as the supply side recovers slowly and prices reach extreme levels.

Therefore, the global system should protect against extreme prices, while local authorities should be responsible for stock availability. Free market prices could be distorted and there is a need to focus more on stocks and storage processes, he said.

The point of view of developing countries, as expressed by West African farmers’ representative Djibo Bagna and Philippines agriculture attaché Jerome Bunyi, was however that sustainable farming is costly and it takes time before it can deliver the desired results in terms of productivity growth.

The main cause of poverty is not the soil degradation but the distortion that affects agricultural prices, said Mr Banyi. He stressed the relevance of governmental subsidies and protection when prices drop to extreme levels. More flexible trade conditions to developing countries should be conceded to developing countries as they are much more affected by agriculture. The two agreed on the need for an efficient storage system.

Ten minutes of interventions from the floor included a suggestion that the availability of goods should be managed internationally instead of locally, as argued by Mr Ugarte.

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Lunch session 3: Speakers predict jobs and inequality will continue to dominate

SESSION TITLE: The role of the multilateral trading system in contributing to the global economic recovery and the future of global trade: A world business perspective

Jobs will dominate the political debate in the coming months as the economic crisis continues, according to panellists in this session on trade and the global economic recovery. Speakers also warned that income disparities will be a critical issue in most countries.

The session also heard figures showing that globalization has been good for India, thanks to the country’s growing integration in the world economy. But the downside is that India also faces income disparity: while the rich get richer, the poor stay poor.

This subject sparked a comprehensive debate that at times became quite technical.

The most thought-provocative speaker was Geoffrey Gamble, vice chair of the ICC Commission on Trade and Investment Policy. Some of his points:

• The job situation in developed countries is dismal and job creation will dominate the political debate in the coming months not least in the forthcoming Congressional elections in the US.

• The problem is structural and it should not be solved with blockbuster policies such as large stimulus packages. The solution should be to create a sustainable economy.

• US employees earn less now than 30 years ago. But even with full employment they would not be able to buy what the economy is producing. The money goes somewhere else, because the rich are getting richer.

• What must be done: no let up in pursuing an ambitious and balanced outcome to the Doha Round negotiations.

• The multilateral trading system is the best way to achieve a free and fair global trading system.

R. V. Kanoria from India showed figures on the progress achieved in India in the last few years in terms of employment, trade, better quality of life, etc. He said these are a good consequence of globalization and India’s further integration in the global trading system. But India still has 65% of its people dependent on agriculture and in that sector, there is some resistance to globalization.

Unequal distribution of wealth — because the benefits of globalization go to the educated people — create a situation of growth both in the number of the modern educated section of the population and also in the number of the poor. And there is an added problem that the rich get richer and the poor remain poor.

He said protectionist measures cannot be imposed in the name of solving the unemployment problem because they are not a solution.

He concluded that income distribution is a big problem for India and for most countries.

Jukka Seppala from Norway said the world trading system is not driven by the same forces as before — the US, EU, Japan and Canada, who used to be known as the Quad. Now there are new players and they make it more difficult to move. Countries are taking positions in the Doha Round that are too defensive and too mercantilist (viewing exports as good and imports as bad), an approach that economically does not make sense, he said.

The Doha Round is an important stimulus package, he went on. Its conclusion could provide balanced benefits between developed and developing countries.

Cliff Sosnow, from the US, said that the WTO has made a positive impact in regulating the current shifting power in the world but in some areas it has not responded adequately, such as for currencies, which in China is quasi-subsidized, government procurement, which is only a voluntary agreement, and in dealing with dumping.

But from the legal point of view, the WTO system is good because it ensures that countries don’t take “impermissible” measures, he added.

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