Actions that result in stability must be pursued, Lamy tells agriculture conference

“Agriculture and the Environment in the Midst of the Current Economic Turmoil; Perspective from the WTO” — Canberra

Ladies and gentlemen,

After having followed your work and read your studies with great interest for many years, it is a pleasure to finally be at ABARE! ABARE’s work on complex agricultural policy issues, fisheries and forestry, minerals, energy and climate change have been particularly instructive to us all. It is think-tanks such as ABARE that allow the WTO’s work to go forward; that help the WTO make sense of the complex landscape of issues that constitutes its day-to-day work.

The WTO, as you know, did not succeed in reaching a final agreement on modalities for agriculture and industry — two key pillars of the Doha Round — at the end of last year. Such an agreement would have paved the way for the complex, and quite tedious process, of turning guidelines into legally binding obligations — or “scheduling” as we call it in our jargon.

And, just as importantly, it would have paved the way for the completion of other areas of the Doha Round, such as the services negotiations, the reduction of harmful fisheries subsidies, or trade and the environment. These subjects would have no doubt gained steam had we been successful last year; but, to our great dismay, agreement proved elusive.

Australia played an extremely constructive role in the negotiation, throughout its various stages, in particular through the Cairns Group coalition. Australia, and the Cairns Group, saw and understood the value of the deal that was being proposed until the very end. But we did not manage to close the gap on issues such as the Special Agricultural Safeguard Mechanism and the market opening of specific industrial sectors.

Today, we find ourselves in the midst of a financial crisis and a global economic recession of unknown proportions. Some are already beginning to regret the opportunity they lost last year to conclude the Doha deal. Global output and trade plummeted in the final months of 2008, and global growth in 2009 is expected to fall further.

Of particular note is the World Bank’s forecast of a drop in global export volumes of 2 per cent in 2009, the first decline since 1982. Developing countries — who are most in need of economic growth — will be particularly badly hit, with their export opportunities fading because of the recession in high-income countries, the shortage in export credits, and the rising cost of export insurance. This, coupled with reduced foreign direct investment, reduced remittances from migrant workers abroad, and further falls in commodity prices, is likely to be a serious strain on many of their economies.

As a veteran WTO negotiator has put it to me, rather than creating new trading opportunities, the WTO now finds itself struggling to preserve the status-quo.

WTO members are concerned about beggar-thy-neighbour policies and this is why we have switched on the WTO “radar screen”, to track measures that countries are adopting in the context of the current crisis.

While the first indications are that there has been “limited evidence so far” of isolationist moves, some trade measures have indeed been taken, and are documented in the first report I produced for the membership. We must remain vigilant, nevertheless, in particular as the crisis starts to bite. A new radar picture will appear a fortnight from now.

But herein lies a complex issue, that few have bothered to think about, and which many had underestimated in valuing the Doha deal. Several new barriers to trade, in terms of increases in tariffs or in trade-distorting subsidies, can be perfectly legal in the WTO. Why? Because countries may not have been using, in the past, their tariff and subsidy entitlements to their fullest capacity. But, in the midst of the financial crisis, many are certainly contemplating doing so!

These unused entitlements, if used, could set the world economy and world trade back several years. And it is much of these unused entitlements that the Doha Round would have helped eliminate.

Let me clarify this picture to you further since, as I am sure you can appreciate, it is critical to properly assessing the value of the Doha deal. Today, countries can more than double their agricultural tariffs from their current level, while remaining within the boundaries of their WTO commitments. The same can be done with industrial tariffs, again while remaining perfectly WTO-legal. Can you begin to imagine what that would mean for world trade if it were to materialize?

But, of course, as we were negotiating up until the end of last year, many sought a Doha accord that would deliver “substantially new trade flows”. I do not blame them, new flows are indeed desirable. But it was certainly unfortunate to have underestimated the value of preserving existing trade flows! Yes going forward — over and above what we have today — is good. But we must start by eliminating the possibility of going backwards.

A recently released study by the International Food Policy Research Institute (IFPRI) has tried to assess the “Cost of a Non-Doha”. In a scenario where the tariffs that are currently applied by major economies rise all the way up to their legal ceilings in the WTO, it finds that world trade could shrink by up to 8 per cent, reducing global welfare by up to US$ 350 billion. I leave those numbers for all of you to contemplate.

In the midst of the financial crisis and the economic recession that we are now experiencing, turmoil in the world’s agricultural markets has persisted. But I need not demonstrate this turmoil to you, since no one knows better, or feels this turmoil more, than you here in Australia. I was struck by the fact that in 2007, agriculture’s contribution to Australia’s GDP fell by a full 10 per cent. And while the sector’s contribution to GDP picked up again in 2008, it may have to see its rate of growth fall once again due to the current economic crisis, and swings in commodity prices.

But these, of course, are not the only factors involved. Drought, which you know about all too well, and forest fires have also taken their toll. A reminder for us all of how dependent we continue to be on climate, despite the latest technology at our disposal, and of the potential threats of climate change to our wellbeing. In fact, I take this opportunity to offer my condolences to all the people of Australia afflicted by the fires of this past month. My thoughts are with you.

Within the span of the last two years, the world has moved from a situation where ordinary citizens were protesting on the streets due to rising food prices to one where food prices have fallen, and agricultural producers are the ones protesting instead.

A debate now rages on whether the factors that have created the recent food crisis have disappeared. While the autumn 2008 report of the OECD/FAO on the world’s agricultural outlook for 2017 argued that food prices would shortly resume their long-term price decline, this conclusion is debated by various research groups. Some of the latter argue that population growth, rising demand, high energy costs, increasing pressure on farm land and water, and climate change may all cause prices to go the other way.

Irrespective of these forecasts, I would argue that any element of stability that can be brought to this picture must be pursued. The Doha Round’s agricultural package, which reduces tariffs, reduces harmful internal subsidies that prevent in particular the developing world from fairly competing, and which eliminates export subsidies altogether, is no doubt worth pursuing.

Quite surprisingly, in the midst of the food crisis, we have heard calls for “food self-sufficiency”, with some portraying import-substitution as the answer to food security. What this forgets is that international trade can be exactly the sort of vehicle, or “conveyor belt” if you will, that would allow food to travel from parts of the world with a surplus to parts where there is a shortage. In so doing, it can bring down food prices — something which the world’s poor would certainly thank you for.

In the Doha Round’s agricultural package, the monopoly power of State-Trading Enterprises is under discussion. Some would like to see these monopoly powers go, and consider them an export subsidy. I do not intend to meddle in Australia’s domestic affairs, and note that some change was in any case made at the end of last year, but would simply offer the following comment. Changes to some of the practices of STEs, in my view, are a relatively small price to pay for an economy whose agricultural products account for about 16 per cent of its total exports, and which would benefit tremendously from the overall Doha deal.

Let me now turn to the environmental chapter of the Doha Round negotiations.

I am convinced we must all invest in this chapter of the negotiations, not least because it would usher in a new beginning for the WTO. This is the first time ever in the history of Rounds of trade negotiations that environmental issues have been so explicitly placed on the agenda. Were these negotiations to fail, there would be little that the WTO could do in the environmental sphere in future. Hence, the importance of making them succeed.

So far, they cover three main issues: ensuring greater harmony between the rules of the WTO and those of Multilateral Environmental Agreements; opening trade in environmental goods and services; and reducing environmentally harmful fisheries subsidies that deplete our oceans.

Ladies and gentlemen, we cannot afford to let the environment be yet another casualty of the financial crisis. And I would like to commend Australia on the green provisions of its stimulus package; in particular, I am told, the AD$ 3.8 billion that have been allocated for household insulation and the solar hot water programme.

Were we to bring the Doha Round’s environmental negotiations to shore, the WTO may be able to turn to much more complex issues like the interface between WTO rules and climate change.

Australia is of course in the process of setting up its emissions trading scheme, as are several other countries such as Japan and New Zealand. Trade rules will need to be leveraged in the fight against climate change, no doubt, and the sooner the better. The trade agenda must respond to the Copenhagen agenda, and to the environmental aspirations of the very membership of the WTO. Climate change, and the irreversible havoc that it may wreak, cannot afford to wait.

We need to finish the Doha Round now, so we can turn to the even higher mountains that we must still climb. I count on Australia’s leadership to deliver these messages to the upcoming G20 leaders summit in London.

Thank you for your attention.

  

Transcript of question-and-answer session
Answers from Simon Crean, Australia's Trade Minister, and Pascal Lamy

QUESTION: ...Australia, we are losing face. We're losing our children off the farms, they're not staying. We're losing our capacity to farm and now we've got — we're importing more food than we're exporting. And I think we've got a real serious problem in Australia with our foods committee(*) and our ability to feed ourself as we go on.

What's happening is that we're losing our capacity. People are moving away from the farm and selling their water off to farmers, so that land is not going to be available to come back into production.

And I don't think we can wait until 2015. I think that too impairable damage is happening now. Thank you.

SIMON CREAN: Well, we don't want you to wait until 2015 either and that's why we've been pushing so hard. In fact, when we came back into office this was the immediate priority. And I think in terms of the initiative that was taken in Davos in January of last year, that was a significant kick-start again to the Doha Round. You might call that when we were meeting last time, we were meeting in the context of skyrocketing food prices as a reflection of this imbalance, this structural imbalance, supply and demand; and how much the world has been turned on its head since that time.

Look, we know it's not the level playing field. But that's why the whole purpose of these negotiations is to try and make it more level. No one's pretending that Doha is the best outcome that we would like. But it is achievable and it's significant, and importantly it's a platform.

But not to be deterred from the July frustration, we proceeded immediately to conclude the ASEAN agreement. Now ASEAN is a group of countries, is our biggest trading partner — $18 billion in two-way trade. It's bigger than China, bigger than Japan, bigger than the US. These are the market access opportunities that we are striving to open so that competitive, efficient productive agriculture can participate and you can get market access.

But the other point I think is terribly important, don't just think of agriculture and what your kids do as being confined to producing the commodity. The services dimension of agriculture is another comparative advantage for this country. The opportunities, whether it's in value-added food manufacture and in the context of our dairy industry, and the recent Chinese scare with the poisoning. Think of the potentials if we think investment in other countries, not just sending commodities to other countries or products to other comun... countries.

And then of course there's the whole service dimension of the agriculture sector; land management, dry land farming, water management, all of these things are the expertise that we've got to nurture.

Now that requires us, as Government, to invest int he infrastructure, the broadband rollout, the technology and the skills development.

And that's what we're doing to sus... to support the sustainability of your sector beyond the commodity base. Not moving away from the commodity base, because we do have to concentrate on it, but doing more with the commodity base and opening up the market opportunities, not just at the agriculture tariff level, but the behind the border issues that could otherwise constrain the opportunities in the services sector.

QUESTION: Andrew Stogal(*) Centre for International Economics. I wrote down a thing that — question to Mr Lamy. You said trade was going to decline and that's — and the train has basically left the station, and that's going to happen whether we like it not, and it's true.

And really our challenge is the trade policy to make it better. And will — can trade policy make it better or worse? And the thing there, of course, that's just holding the line, is going to be an enormous challenge. We've seen the buy American provisions and this radar screen that WTO is going to have is — seems to have caught on. And so yesterday's Financial Review, the bottom right hand corner, there was the unions putting forward a buy Australian sort of program. And this is all protectionism, it all restricts trade, it's all costly.

And part of the trouble, is and why there's no Doha deal now is, really there's not much on the table to take it away from the table. To bring it back to terms of these people, you know, I mean this is a country, where here this is the world's largest producer of sheep meat. You come from Europe. Europe is the world's largest consumer of sheep meat. Now what's on the table is basically one extra lamb chop per person, per year.

Now you and I know that that's pathetic. And so there's no diagnosis in your address in terms of why is that so poor? What is the real political situation and why can't we change that?

So question one is really, well, what are you going to do about that? Just another sort of forceful message to the G20 is not going to do it. Within 36 hours of the last G20 meeting in November, Russia and India put up to — some tariffs. So even though they declared they wouldn't put up tariffs, that isn't [indistinct].

So these messages, so, why do they need to be made, there's got to be a better strategy.

So, my second question, is why is it that you don't — there is another strategy that could work and those countries that have tried this strategy have gone to freer trade.

And that strategy is one where they've actually measured the benefits and the costs of those trade barriers to themselves in a way that they've understood.

Now one of your predecessors Oliva Long(*), put out a little policy report on this, on trade policy transparency. And this doesn't replace the negotiations or anything, it would supplement, it would add to it.

So my question is, why is it that you have chosen not to push that strategy forward?

CHAIR: Thanks Andy. Pascal.

UNIDENTIFIED MALE: [Indistinct] brief reactions to that?

PASCAL LAMY: First, and I read your piece about transparency and I think I even wrote you a letter thanking you for this piece and giving you a few observations.

I disagree with this premise of yours that there is not much on the table. One of the reasons why we have a difficulty including this round is precisely because there is a lot on the table. And any serious research in numbers would show that dividing, by two, the amount of duties collected worldwide is not negligible.

It's a huge package. And if you look at tariffs and subsidies, just to focus on Australian main interests, the economic value of what's on the table, at this stage, which need to be topped up to conclude is three times the value of the [Indistinct] round.

So please look at the numbers before starting from an assumption that there's not much on the table.

Second, on the G20 prescriptions, the dominations, whether or not they're serious about their commitments are true. India raised a bit of its tea tariff from five per cent to nine per cent, whereas their band tariff is probably 30 or 35. So not a big sin. Okay it's more than just keeping where it is, but not to a big magnitude.

Russia you're absolutely right. Russia happens not to be a member of WTO yet, so the notion that they would be bound by international disciplines has probably yet to percolate into the Russian system the way it has percolated in other WTO members.

Now, your final point, and I know your views on this, and it's perfectly legitimate, respectable and rational academic argument, which is that if all countries were all intelligent they all would do unilateral trade liberalisaton because this is what benefits their economy and their consumers. In the ideal world of academics and science this is a truth.

It simply happens that in all WTO members, or nearly all, in order to do that you have to go to your parliament and the number of parliaments that would agree with the notion that the right thing to do in trade policy is disarm unilaterally, 99.5 per cent of parliaments of this planet will say no.

And that's the simple condundrum we're in, which is why we need negotiations, trade-offs so that Governments, when they want to open more their economy or where they want to discipline the level playing field which plays nice to some constituencies and terrible to other constituencies, they need to be able to show that overall the sum of cost and benefits, gains and losses, is the right one. Which by the way is not that difficult to do, because by definition if you create more efficiencies, at the end of the day you've got more to share than the sum of the concessions which you don't.

So that's the political reality within which we are operating. Now does this mean — and I go in new direction — does this mean that the WTO, or more precisely the WTO Secretariat could not do more in analytical work in education, numbering, substantiating this notion that opening trade creates more benefits than costs? You're absolutely correct on this. We should do more. But — but we need our members to give us the necessary margin of manouevre to do that.

We don't want to be quoted on this, but just give you a fact. Three years ago one of our members asked us to work on a study on the consequence for textile, including trade on this planet of the elimination of quotas. Another of our members strictly and definitely opposed that. We remain member trader, and until and unless our members are sort of — have a wider conception of what we can table in terms of analytical work, we have to be extremely careful.

And this is something which if organisations think things like this one and others, and there are many good places where good people know about good trade policy, if they can help us convincing our members that putting a bit more of this intellectual material on the table would serve us all, I'll be with you.

CHAIR: Thank you. On that very realistic and hard note, I think we have to close our session. Our guests have
a sharp time frame to work with. Can you join me all in giving thanks in the normal way.

[Applause]

 

Transcript of joint press conference

SIMON CREAN (Australia's Minister for Trade): Thank you. Sounds like the longest celebration I've ever had.

PASCAL LAMY: [Laughs]

SIMON CREAN: All right. Well we're here to answer the questions that you couldn't ask us in there. So fire away.

QUESTION: [Inaudible question]

SIMON CREAN: Well we haven't had any indication from the US Trade Representative because that's subject to the confirmation process and that's I think scheduled for the beginning of next week. Until such time as that confirmation process goes through, the ability to engage my counterpart we haven't been able to proceed down the path of.

Position of [indistinct] and agriculture's no different than it was the position last December. This is a matter that we continue to need to deal with in the context of both the Congress and the Administration. But significantly, the US had signed up to the position that we got to in July, and from which we're trying to move forward.

Now the truth is there are still matters to be resolved. But what we're trying to do is to get back to an engagement that builds on the existing texts and that requires a parallel track approach.

Work at the technical level — and there was important work at the technical level between July and December — and that's reflected in a new set of texts.

There's also the engagement at the political level. That's been stalled in part because of this transition period in the United States. But what was significant last year at the same time these concerns were being raised, was that the combined leadership of the G20 committed very strongly to the importance of concluding the Round.

It's that momentum that we've got to build into the London summit. It's that momentum obviously that we've got to engage the new US President in as well.

QUESTION: But how…

PASCAL LAMY: On the same ... sorry, on the same topic, a) I confirm that we don't have any position of the US and we won't get that before some time. Second, on the Farm Bureau, I mean, the Farm Bureau has always had to balance the sort of interest of the two thirds of the US farming system that's looking for market access, and the one thirds that's looking for keeping the subsidies.

And we know that at the end of the day there will be less subsidies and more market access. And that's where the crucial balance lies. What you see in what's appeared of a bilateral policy in the piece they've just tabled to Congress two days ago is this observation which I think is factually correct, which is that at this stage of the negotiations in agriculture, the US know what they pay in terms of reduction in subsidies. Overall [indistinct], product specific caps, so this is clear. They know what they have to offer in terms of market access. What they don't know is exactly what they get in return, notably because of special products in developing countries and these [indistinct] are closed.

And this is a factually correct statement. Now then the question is what's the consequence you draw from that? And my strong advice, and this will be no surprise to anybody including to Simon, is that my strong advice is that if we want to move this forward, we have to take it from where we are. And where we are, are the December texts by the two chairmen of those two main negotiating [indistinct]. Sorry.

QUESTION: [Inaudible question]

SIMON CREAN: Well I think the important thing is the momentum and the leadership engagement. It was not just a direction to us as ministers to meet which didn't happen, but it was the preparedness to remain engaged to conclude the Round. I think what's going to be an important signal is the extent to which — with the deterioration in the global economic equation — the importance of trade as part of the overall solution. And bear in mind, Doha as a stimulus in comparative terms to what the G20 has to face up to — in terms of the financial sector and all of the problems there — it's been referred to as low-hanging fruit.

It's still very difficult to conclude, but in comparative terms it's there to be plucked because we're 80 per cent of the way there, we know the issues that have to be resolved, but we know that they won't be resolved without the injection of the political will. But we significantly have the framework now to inject that political will.

What we didn't have in December was the new government of the US in place. It's still not finalised. It's the factual dimension of this that we have to deal with. Timetables. As much as we'd like to set them, we have to deal with time, with realities.

So I remain optimistic. I know that Pascal does as well. But simply because we did get to where we got to in July, we know that the others are potentially overcomeable but it won't happen without the political will. What we've got to do is to raise the level of that political engagement. We've commenced that process in a significant way. We've now got to build on it. And that opportunity presents itself within four weeks and that's what we've been talking with the PM about, quite apart from the discussions we've had ourselves.

QUESTION: [Inaudible question]

PASCAL LAMY: First, the negotiations are not closed. They are going on at technical level in — across the whole agenda — in Geneva. But I recognise that, you know, what's brewing down there is not that user friendly, especially for you, because it's very complex and these experts usually are not entitled to take the risk to talk to the media.

So when will we go to a more media friendly frame of the negotiation? At the moment we're — I will make a judgement, and I'm not the only one to do that, I share this with a number of colleagues — that bringing 20 ministers around the table in Geneva can be conducive to crossing this sort of pre-final hurdle. And that the odds that it works are above 60 per cent.

That's roughly the sort of [indistinct] I have in mind, which is why I did it in July and I did not do it in December. And I think I have to be rather transparent on why. When can I do that for sure? Not in the coming weeks. Not least, because we don't have a US administration up and running on trade and it might be finest, and well still take some time. Plus Indian elections, the results of which will be clear by mid-May. So it's not the coming weeks.

What I hope, what I hope is that before the summer break there will be a window of opportunity to bring them back to this [indistinct] it being understood that what remains to be coped with is a small portion of the big list we had to cope with last July. A large part of that is already stabilised, so normally with a bit more political energy on a smaller number of topics, normally it should work.

This being said, Simon can afford to be optimistic. I cannot, because I cannot afford to be pessimistic and if you're pessimistic you also have to see the other side of the coin. So I remain activistic[sic].

QUESTION: [Inaudible question]

SIMON CREAN: We've been monitoring this question and so far, through EFIC, the Export Finance Insurance Corporation, that — then I'm again seeing them this evening, I'm going back to Sydney for a meeting with them — we'd been monitoring this impact here in Australia, and so far it is not having major impact on us.

Nevertheless, the fact remains that if liquidity availability and credit flows are constricting because of the broader global financial crisis, this has the ability to impact on trade flows. We can't ignore that. And Pascal has been very active at the WTO level, and I'll let him elaborate on this point, in terms of — and he also comes from a background in the bank of understanding the importance of this — being very active in trying to coordinate this at the global level. EFIC, of course, has been making an important contribution.

Interestingly enough, trade finance is one of those things that is the least risky of financing options, yet it runs the risk of getting caught up in the broader global financial crisis.

So in one way we're not just monitoring the exercise, we're also highlighting the fact that in dealing with the solution to the global financial crisis, the rest of the countries, at the Finance Ministers' level, can not either afford to ignore the trade implications.

Now a number of options have been talked about, because the countries that are going to get impacted mostly in terms of this are the developing countries. What we've got to do is to look at it as a global initiative and that's what Pascal has been working very actively on.

PASCAL LAMY: Oh, I'm — I've had a meeting with EFIC on Monday when I was in Sydney, precisely to try and assess their own diagnosis and view on this situation. Overall, we had in November a problem with risk premiums rocketing and liquidity drying. I'll have another meeting of all this crowd in — on the 18 March in Geneva.

My feeling at this stage is that the sort of risk part is stabilising, but we still have a big problem on the liquidity side. And, of course, you know it's — if Chinese exporter cannot find 90 days letter of credit, the export just doesn't take place.

My feeling is that here in Australia it maybe less of a problem than elsewhere. Why? Probably because the financial system has been relatively more preserved than in other areas and prudent. Let's touch a bit of wood if there's any wood around.

But the ability of the Australian financial system to provide trade finance is probably less constrained than in other areas which, again, is good news.

This being said, EFIC, as part of the Berne Union, is ready to try and work on a few of these new ideas which we've tabled, together with the World Bank president, on the idea of creating liquidity pools, notably in this region.

QUESTION: Where will the money come from?

PASCAL LAMY: Liquidity pool — you know, you've got a number of countries in this region who have substantial reserves. And putting liquidity for a revolving goods collateralised short-term Letter of Credit system, it's just lending on a revolving basis with a fee that offsets the cost of liquidity. It's probably the most un-toxic financial product you can find on the market, is trade finance. It's simple, revolving, short-term, collateralised. What more do you want if you're a banker [laughs].

QUESTION: [Indistinct] for Landline, which is a rural program for the ABC. And I'm just interested in your view on what happens if the next Round [indistinct]. And what does it mean for agriculture in countries like Australia that do believe in free trade [indistinct]?

PASCAL LAMY: Look, if the Round was not to succeed, that would mean for Australia that for the moment the only discipline in terms of market access or in terms of subsidies are the ones stemming from the Uruguay Round dating from 1995. And that's true. It's a huge ceiling for trade distorting subsidies in US, EU, Japan.

It's important entitlements for export subsidies, and it's important tariff protection, with some tariff peaks, which were at the time accepted as a compromise in the negotiations.

So the whole reduction of all this would not be available to a country like Australia who in agriculture is a net winner, whichever academic number you can look at. There can be a discussion whether it's a huge net winner, a middle net winner, or a small net winner, but it is a net winner. That wouldn't be available.

QUESTION: Yesterday an official from the European Commission denied that what we have done with dairy export subsidies was actually [indistinct] existing mechanisms. When you talk about there being little evidence of [indistinct] so far, [indistinct] fairly narrow or fairly broad view of what constitutes [indistinct]?

PASCAL LAMY: Look at our list and make up your own mind on whether or not we take a broad view or a narrow view. My sense is that we do it seriously. We track all significant trade policy changes in our 153 members. And as Russia is a member of the G20, we even add Russia to this for the same price.

Now, this EC dairy export subsidy was spotted five-on-five in the list we published in January. So it was part of what we signalled as a worrying development.

QUESTION: Mr Crean, can you just clarify, would Australia contribute to [indistinct]?

SIMON CREAN: Well, again, this is ongoing discussions that we have had. What we have said is that we stand ready to take steps at home if the tightening occurs and we want to play a constructive role in terms of any solutions coming forward, or requests for solutions coming forward from the WTO. That's an ongoing discussion.

QUESTION: So it's possible [indistinct]?

SIMON CREAN: Well, let's see how the discussions go.

Now, we're going to take one more question and then we both have to go because I think we're both very pressed.

QUESTION: I just wanted to ask what sort of institutional framework do you have in mind? Is this something that will just be a one-off informal kind of arrangement between those with money and those who need it? Or is it — does it need to be some more formal mechanism?

PASCAL LAMY: WTO has no jurisdiction at all on trade finance. We have no mandate. It's not really in our core business. It just happens that because of the economic crisis and because of the huge potential impact of drying up of trade finance, notably for emerging countries, they've asked us to sort of play a convening role, which is why we've juxtaposed multilateral financial institutions [indistinct] banks and commercial banks — what remains of commercial banks — worldwide to try and see how improving the interface between these three groups we can ease the situation.

So it's a sort of, you know, good office facilitating. There's nothing like, you know, building a sort of house in stone. No, it's a sort of tent-like exercise. If it results in more trade finance available, fine.

And, by the way, it has already resulted in regional development banks, Asian development banks, EBRD, African Development Bank, stepping up vigorously. And the World Bank has sort of multiplied by five its lines of guarantee since a year, which I think is a reasonable reaction and a good result for the time we've been spending on this. I hope more to come in mid-March so that we can present the result of this and maybe get a bit more momentum from the G20 in April.

SIMON CREAN: Okay, thank you very much.

PASCAL LAMY: Thanks.

(Transcripts courtesy of Mr Crean's office.)