Development issues were looked at in the sessions on the challenges facing small and vulnerable economies (SVEs) and the least-developed countries (LDCs) now that the Doha Round is at an impasse, on the African cotton crisis, and on linkages between food security and trade in services.

The business community was served by sessions on business leadership on trade in the 21st century and on proposals for open markets for sporting goods.

In a session organized by Google and the Computer and Communications Industry Association, the Internet was described as the new Silk Road that erases distances connecting business with world markets. The Internet now has become a crucial instrument for trade and economic growth.

Other sessions discussed human rights and the WTO, trade and employment, trade opportunities and challenges in a green economy, and intellectual-property issues.


Session 30: Business Leadership on Trade in the 21st Century

This session mainly dealt with the views of business circles on the multilateral trading system as it is today and their thoughts on what challenges the WTO should address in the future.

For Juan Rada, from Oracle, one of the key areas in the future is the evolution of telecoms networks that will enable the transportation of vastly increased quantities of services. While more and more national barriers will be broken and more complex forms of outsourcing will be developed, those networks also raise challenges. First, the rules and regulations of online systems are not clear and sometimes contradictory. We need a modernization of the judiciary system, he said, as the capacity to enforce the rules is now too weak.

Emmanuel Faber (Danone) declared that the food industry had no clue about how to achieve food security for a billion people. Business cannot help much alone. He called for de-synchronizing food and water from capital markets and volatility. As to the way forward, he said that more complex thinking was needed: “we are not in supply chains, we are in supply webs”. For instance, we need to take into account the externalities having social and environmental impact. He also said that the future WTO negotiations might require the inclusion of financial and social chapters.

William Echikson (Google) asserted that free expression was a human right for Google, but beyond that, there was a compelling economic case to be made for more open networks. The Internet was crucial to the future of the global economy as it contributes a lot to economic growth (more than 8 per cent of GDP in the UK). Therefore, it was essential that Internet-related trade enter into the WTO agenda post-Doha. We would need clear rules in trade agreements for the Internet to reach its full potential. Attempts to block the free flow of information will be the challenge of the 21st century, he said.

For Stephen Pattison (ICC, UK), the current economic and political situation raises the risks of an increase in protectionist measures. He advised the WTO to “think fast, think big, and think out of the box on how to handle all of this”. On Doha, he criticized the paralysis of the negotiations and made a comparison with the League of Nations in the 1930s which became irrelevant because it could not address the pressing challenges of the day. In business circles, the WTO is beginning to be seen as irrelevant to the real issues (globalization and internet), he said. Mr Pattison made some recommendations, such as to look hard at plurilateral negotiations. He also called for enhancing the monitoring capability of the WTO. Finally, he suggested that the WTO should get closer to business to better grasp the complexities of the globalized economy (while not becoming captive to special interests).

Wayne Paterson (Merck Serono) said that the pharmaceutical industry has been transferring resources to emerging markets with the opening of research centres in Shanghai, Beijing or Singapore. Emerging markets account for a greater share of their revenues and are now “mature” rather than “emerging”. He said that their particular challenge was to maintain IP for an industry that is driven by patents, and that the WTO could be more active in this area. The TRIPS Agreement was a good start but gaps still exist.

Questioned on the future of the food system, Mr Faber said that it will remain local, notably because of the climate change issue. Otherwise, a global system would face systemic risks. In response to a question from the audience about the role of businesses to push their governments for a conclusion of the Round, Mr Pattison said that businesses focus on where the action is, which means bilateral and regional processes for the moment. Following a question on private codes of conduct, he declared that CSR was at the centre of attention in business circles but that it should not become a bureaucratic exercise.

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Session 31: Trade in an Instable Environment: the Impact of Fragility and Corruption

How conflict and the resulting instable environment affect trade in fragile states was the main theme of this session, which concluded that both businesses and the WTO could help foster trade opportunities and economic recovery.

Dr Matthes Buhbe, Director of the FES Geneva, introduced the subject, noting the negative effects that conflicts and weak institutions have on trade and their impact on the effectiveness of programmes like Aid for Trade. He also drew attention to the World Development Report that analysed in detail the vicious cycle of economics and trade, and the fact that no country with conflict zones achieved a single MDG (millennium development goal).

Dr Elisabeth Schoendorf, Researcher for International Security at the Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs), affirmed that economic recovery is a precondition for peace and that this recovery faces many challenges. One of these challenges is the fact that conflict pushes trade from the formal to the informal economy, and fosters the development either of combat economies (in which activities focus on mobilizing resources for the conflict parties) or of shadow economies (in which economic actors profit from illicit opportunities that arise during crisis). Furthermore, previous experiences prove that fragile economies perpetuate fragile states and shadow economies, she said, and that collaboration from diverse actors, such as states, international organizations and businesses is required to face these challenges. Finally, she noted the important role that businesses play in economic recovery by fostering the legal economy and through foreign direct investment (FDI) if operations are appropriately structured. Conversely, access to international markets can often also fuel combat economies. However, she stressed the increased awareness of these issues in the international community as the increased membership of initiatives like the UN Global Compact indicates.

Mr Achim Wennmann, Executive Coordinator of the Geneva Peacebuilding Platform, discussed what opportunities arise from unstable environments and how the WTO can unlock these opportunities. According to the Global Peace Index, if the world had been 25 per cent more peaceful in the last year, over US$ 2 trillion could have been freed for investment. He discussed the wrong perception that businesses run away from conflict environments, while in fact they have the most to gain from a reduction of violence and look at it as an opportunity. He refuted the perception that violence decimates any economic activity, using the Somali cattle export industry as an example. Finally, he affirmed that the WTO could unlock many of these opportunities with programmes like Aid for Trade and trade facilitation, which are critical to improving trade performance, and by supporting public procurement, which could either develop the local industry or free up resources by making savings in competitive purchases.

Mr Jean Amat Amoros, Co-Founder of Gundara, a label for fair trade leather bags from Afghanistan, commented on the challenges on the ground for developing trade in a conflict-torn country. He mentioned specifically the insecurity of installations and personnel, which affected production and timely delivery. On the positive side, he noted that having products from Afghanistan in the West attracted attention from the media, and helped spread a different image of the country.

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Session 32: Food Security and Trade in Services: Risks and Opportunities for Developing Countries

The main purpose of this session was to gain a better understanding of the linkages between food security and trade in services. The overarching sentiment of all the speakers was that this link was of primary importance, particularly in relation to developing countries. However, it was an area that had not yet received much attention.

Sandra Rios (Centro de Estudos de Integração e Desenvolvimento) presented the main findings of a regional study that looked at food safety concerns within Africa, Latin America and Asia. Her presentation highlighted that in the recent food crisis, many national responses to food security were myopic in nature, particularly in their efforts to address the immediate high food price concerns. This resulted in the implementation of protectionist policies to gain self-sufficiency. Such measures are in opposition to long-term solutions that foster investment and infrastructure development. Such solutions require institutional coordination and until now regional policy dimensions had not played a role in setting policy responses to food security concerns.

Martin Roy (WTO) highlighted that this indeed was an important research area as everything between production and consumption of agricultural products involves services. He indicated that while the relationship between the General Agreement on Trade in Services (GATS) and agriculture is not a key issue in the negotiations, a plurilateral request has been made in the negotiations in this regard.

Wamkele Mene (Permanent Mission of South Africa to the WTO) shared the experience of the SADC region. He highlighted that Article 5 of the GATS allows countries to establish preferential trade agreements (PTAs) which may facilitate the improvement of services within regions and have a positive impact on food security. He indicated that regional trade sometimes results in trade distortions which would need to be managed. However in Southern Africa, the benefits of regionalisation had outweighed the costs, he said. He highlighted that the most immediate challenge in services trade linked to food security is the need to anchor the agricultural distribution services to an established regulatory institution.

Alexandra Chandra (International Institute for Sustainable Development) highlighted that this area remains under-researched within ASEAN. There is a commitment to both liberalize the services sector and improve food security cooperation. However, these initiatives remain compartmentalised and so there is a need to streamline these issues. He stated that a 2010 World Bank study indicated that in Indonesia the liberalization of services could increase food security by improving the transportation infrastructure. This would counter the problems arising from remote provinces that are characterised by lower integration and that experience high price volatility.

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Session 33: The Doha Round and Multilateralism: Stakes for LDCs and SVEs

The panellists agreed that the failures of the Doha Development Agenda (DDA) cannot dominate the whole multilateral trading system, and that they should not imply that multilateralism is dead.

Professor Alan Winters (University of Sussex) stated that small, vulnerable economies (SVEs) and least developed countries (LDCs) asked for special treatment, but that they did not require this within the context of the WTO. He stated that while the international community must ponder on how to help SVEs become less vulnerable, he disagreed that protectionist policies helped. He stated that the Doha Round was not promising for SVEs and LDCs and that it was a “Round for free”, but that multilateralism was worth preserving.

Junior Lodge (CARICOM) contested this view as unjust simply because these countries have nothing more to give. Professor Winters said the rise of BRIC countries within the system changes interests, but the underlying principles of Doha remain and there was no need to rethink engagements.

Ambassador Singh Bahtia (Permanent Representative of India to the WTO) stated that the deadlock in the DDA victimised LDCs and SVEs. He claimed the “multilateral process can function as an antidote to the failures of globalisation” and said that Aid for Trade and the Enhanced Integrated Framework played a role in the impotence of LDCs and SVEs. He stated that abandoning the Doha Agenda would create a climate of distrust. He commented that LDCs and SVEs need trade liberalization policies and trade capacity building in order to develop.

Bonapas Onguglo from UNCTAD said there was a need for a “development audit” at a national level. Furthermore, the most important cost of failure of the DDA would be the loss of the development dimension on the multilateral trading system. He said that “trade liberalization is a tool used but not a panacea for development”.

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Session 34: A New Trade Barrier: Blocking the Free Flow of Information

The session discussed how the Internet had become a crucial instrument for trade and economic growth. However, this new engine for trade risked being shut down because of the increasing limitations on the free flow of information that were being adopted by governments. These limitations ranged from blocking of certain content, surveillance tools, local storage requirements to liability for Internet Service Providers (ISPs) for breaches in laws for content circulated on the Internet.

The panel cited some figures on the increased importance of the Internet for trade. The Internet had become a new Silk Road erasing distance and connecting businesses, particularly small ones, with world markets. The Internet was the most powerful force in the global economy; in some countries a 10 per cent increase in broadband results in a 2 per cent increase in exports. Also, 50 per cent of cross-border trade in services was enabled by the Internet.

The panel also highlighted the inadequacy of current WTO rules to address the problems of the Internet and protect its access. The General Agreement on Trade in Services (GATS) did not anticipate the growth of the Internet. The GATS framework of rules dates back to the late 1980s and early 1990s, when a lot of the current services that can be delivered through the Internet did not exist. Multilateral digital regulation lags behind innovation a great deal, he said. Trade conflicts resulting from digital issues are the main source of GATS disputes. There was the need for governments and the multilateral trade system to encourage the growth of the Internet given its importance for commerce.
Internet businesses face three problems that should be dealt with at a multilateral level: market liberalization, regulation and harmonization. Market liberalization was important as some countries did not let certain companies operate in their market. Regulation was a problem as companies had to comply with burdensome requirements to operate in a market. Harmonization was an issue since companies had to comply with different regulations. There was also the problem of ISP liability for content. The biggest barriers these days are regulations. More than 40 countries are blocking the Internet in one way or another.

What can the multilateral trading system do to maintain the free flow of information on the Internet? A basic reference paper on telecoms and the GATS annex date back to the 1990s and these need updating. A new Information Technology Agreement (ITA) is needed to cover some of the new issues. The Internet came about because of services liberalization in the GATS. The breadth of GATS Article XIV exceptions needs clarification. Mode IV liberalization is also important.

Protecting the free flow of information is not an East-West, North-South issue; all countries — developed and developing — stand to benefit. There is a business interest in getting rules on Internet trade into the WTO. Regional trade agreements could not fully address the issues although some recent ones, like the Korea-US free trade agreement, did contain provisions on Internet commerce. Regional trade agreements are very light on rules and they face the same issues and problems as the DDA but with fewer gains.

Business and governments need to work together to prevent abuses and illegal activity on the Internet but the solution was not “shooting the messenger”. Google has published an Internet transparency and traffic report to provide information on what governments are doing to restrict access to the Internet and how businesses are complying with data requests.

In conclusion, trade has moved online and trade barriers have moved with it. For Google, it is important for WTO circles to understand how crucial the Internet has become for trade and economic growth. Having this session in the Public Forum is a step forward in increasing this understanding.

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Session 35: Keeping the WTO Rulebook up to Date: Possible New Approaches

The session dealt with the negotiating impasse and analysed the possibilities for the WTO to deliver on its negotiating and legislative function. Panellists suggested different approaches that should emerge from a deeper understanding of the root causes of the stalled negotiations and the identification of real priorities.

Mr. Denis Redonnet (European Commission) moderated the session. The speakers were Pieter Jan Kuijper (University of Amsterdam), Bernard Hoekman (World Bank) and Peter Allgeier (C&M International President and former Ambassador of the US to the WTO). They looked at the possible way forward for the WTO.

A number of external factors were identified as having an impact on the negotiations, namely an increasing disbelief in the power of trade to benefit domestic economies, the absence of trade leadership, the current international difficulties that crowd leaders' agendas, and the globalization of value chains. At the same time, the Doha agenda has become more complex and the economic situation of negotiating countries have become increasingly diverse, making it more difficult to reach a balanced outcome.

Against this background, Mr Allgeier suggested ways for the WTO to move forward beyond the negotiating round. The suggested approaches included looking at sector-specific, critical-mass negotiations to advance certain topics, giving the WTO the role of harmonizing existing free trade agreements, promoting rule-making in the various WTO committees and promoting trade education for politicians and students to raise awareness of trade issues more broadly.
The discussion then focused on the role of the “Single Undertaking”. Mr Kuijper indicated that negotiating under the Single Undertaking might in fact be unrealistic. He argued that the Single Undertaking forces linkages between negotiation topics that otherwise would not be there.
Mr Hoekman did not fully agree and explained that, while the Single Undertaking can block progress towards an agreement, it also gives small countries the power to put certain issues on the table and to ask for concessions. In the present round of negotiations, he said, what is halting the negotiations is not the Single Undertaking but rather disagreement between big players. He believes that for the agenda to move forward, it is essential that all issues, their implications and their potential be clarified. What is important is to identify the real priorities and to foster a better understanding at all levels.

The discussion also turned to the dispute settlement mechanism and its role in ensuring implementation of the rules and gap-filling. Broader issues of trade policy shifts and their implications were also discussed.

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Session 36: Increasing Public Access to Sport Through More Open Markets for Sporting Goods

This session was organized by the World Federation of the Sporting Goods Industry.

The sporting goods industry is stepping up its efforts to lobby on an industry-wide basis. It believes that there is a broad interest in reducing barriers to trade in sporting goods.

The proposal is for a sectoral agreement: zero for zero on sporting footwear, apparel and accessories. The model is the WTO Information Technology Agreement (ITA).

Two relevant proposals are on the table: Norway, Singapore, Switzerland, Chinese Taipei, and the United States in non-agricultural market access negotiations (NAMA), and the European Union’s proposal for liberalization of tariffs in textiles, clothing and footwear sectors.

Don’t judge a shoe by its place of assembly. The story is often far more complex than a label leads one to believe. An example are shoes assembled in Asia using Australian raw hide for US companies doing research and development, and marketing.

Trade remedies are prevalent but the Made in the World nature of product begs the question of whether they serve their purpose of protecting domestic industry. For example, a study of five EU-based producers showed that cheap shoes had 40 per cent value added in the EU, while expensive, technical shoes had up to 80 per cent  value added.

Why have trade barriers on sporting goods? There is not just the ten dollar manufacturing cost, there is also the research and development, marketing, logistics costs that people do not understand; also, there is not enough lobbying capacity.

The industry is tired of being “traded off” in favour of steel or cars. There is a need to distinguish between sporting goods and generic ‘shoes’, ‘apparel’ etc.

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Session 37: Human Rights and the WTO: Dispute Settlement and Trade Policy Review Mechanisms

As has been the case with past debates on trade and human rights, the session raised interesting questions but did not provide many answers. The panel and audience alike seemed to agree that there is a (growing) relation between trade and human rights disciplines but they differed on where to place it concretely. 

Despite the session’s title, the panel barely touched upon the use of the Trade Policy Review Mechanism as an instrument to address the human rights effects of trade policies. Only one speaker mentioned that the TPR mechanism seems the obvious and easiest starting point to do so.  Instead, the debate focused almost exclusively on the WTO’s legal instruments and whether and how these can be used to address human rights violations.

Some speakers believed that the Dispute Settlement Understanding (DSU) is the WTO’s port of entry for human rights matters, but warned that this has not been sufficiently analysed in terms of effects or legal mandate. WTO members should first decide what they want and subsequently change the current rulebook for panels and the Appellate Body to extend their interpretative scope, even though — as we were reminded — in practice this already happens. As one panel member rightfully remarked, such a decision will be difficult given that members do not raise human rights issues in the trade arena nor use human rights violations as defence in WTO cases. A participant even wondered if both bodies have the competence and knowledge to rule on human rights related matters. Unfortunately but may be unsurprisingly, WTO members seemed absent in the debate or panel, leaving the audience with more questions than answers.

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Session 38: Strategies for Promoting Green Innovation and Disseminating Environmentally Friendly Technologies – What Role for Intellectual Property?

Moderated by Jayashree Watal (WTO), this session discussed the role of intellectual property rights/Agreement on Trade-Related Intellectual Property Rights (IPRs/TRIPS) in global efforts to encourage the development and diffusion of new, climate-friendly technologies. Most speakers agreed that relevant technologies are largely in the public domain and patents cover only incremental innovations.

José Romero (Swiss Federal Office of Environment) set the scene by explaining the historical background of the UNFCCC negotiations: the +2C target set in Cancún was achievable with existing public domain technologies.  However, two main barriers remain: the global availability of finance and technology. The lack of enabling frameworks in developing countries deters private sector engagement in technology transfer. A bottom-up approach, where specific technologies needed are listed and any IPRs identified, would be more productive. The WTO needs to engage to remove barriers to the flow of investment and technology.

Antony Taubman (WTO) said that climate negotiators had raised TRIPS issues in the UNFCCC negotiations and that the WTO could objectively contribute to the discussion, which was currently binary in nature. More evidence on patent filing and ownership, as well as impact, was needed. He analysed the topic from several angles, including new forms of innovation structures and IPR management; pre-grant (grounds for refusal, fast-tracking) and post-grant options (voluntary licensing, exceptions to rights, regulatory interventions) and market-based solutions. Climate change differs from the usual technology transfer debates in terms of the urgency and the ethical aspects of the measures needed, he said.

Martin Khor (South Centre) said that enough was known about climate science and the role of IPRs to take urgent appropriate measures. There was a need to add to technologies in the public domain, especially where research and development was publicly funded. Past studies of the Montreal Protocol and recent ones on climate technologies had shown that IPRs could be a problem. He advocated a Doha-type declaration to clarify TRIPS flexibilities and a Paragraph 6-type solution, if necessary. He predicted that IPRs would return to the UNFCCC agenda and that the WTO should provide a forum for discussion.

Dyebo Shabalala (Maastricht University) said that there were few legal options for developing countries in the existing TRIPS text and recommended amendments to facilitate patent revocation, compulsory licensing and other measures.

Thaddeus Burns (General Electric) said that the Internet and the TRIPS Agreement had changed the way GE innovated.  GE now has research and development (R&D) centres in China, India and Brazil. The ratio of private sector to government investment in R&D was more like 70:30, and IPRs were important incentives. GE files patents in an average of five critical jurisdictions and hence other countries are free to use them. Owing to the diversity of climate technologies and the fundamental differences with the pharmaceutical and chemical sectors, lessons could not be drawn from the debates on the Montreal Protocol or access to medicines. IP is a tool to achieve customer satisfaction through licensing and not an end in itself, he said.

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Session 39: Trade and Employment: The WTO Agenda for Social Sustainability

Maximizing the benefits from trade liberalization requires proactive policy because trade can not only create high-paying jobs for workers in productive industries, but can also destroy jobs in uncompetitive industries. 

Raymond Torres of the ILO argued that the possibility of outsourcing has caused fear in workers and an increase in informal employment, and called for new economic theories that do not assume full employment.  The public perception of globalization and income inequality and job insecurity need to be addressed by coordinated policy.

Victor do Prado of the WTO emphasized the WTO embrace of employment and called for coherence between trade and labour policies and organizations. This coherence is promoted by WTO/ILO co-publications in 2007, 2009 and 2011.

Yorgos Altintizis of ITUC called for countries to adopt “Industrial Policy”, although admitting challenges from political divisions and weak institutions. The WTO may play a role in its trade facilitation by identifying comparative advantages to promote trade. The ITUC produces a report in parallel with trade policy reviews that highlight the failure to promote just working conditions. Mauritania has 20 per cent of its population living under slavery, with only weakly enforced laws against it, said Yorgos Altintizis. Public moral considerations could become a condition for trade. 

The floor discussion emphasized the challenges of social protection policy in the current crisis, the problems of evaluating the economic and environmental implications of liberalization and concerns about migrant workers.

The consensus from the panel was that there is a fundamental need to regulate the source of the crisis, the financial system. While all agreed that the real economy is corrupted by financial speculation, the member states are the masters.

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Session 40: International Governance of Energy Trade: the WTO and the Energy Charter Treaty

The panellists called for harmonization, transparency and predictability of rules in the energy sector and stated that the current WTO rules did not reflect the current issues and realities of the energy sector and trade.

Ambassador André Mernier (Secretary General of the Energy Charter Secretariat) said that as the energy sector is constantly evolving, it is challenging to negotiate multilateral rules. The current existing WTO rules were not specifically designed for energy and are biased towards market access issues and do not address questions of investment restrictions which are the real challenge in energy trade. He spoke about the Energy Charter Treaty as a unique stand-alone international agreement specific to energy and said its main advantage in relation to the WTO is its constituency.

Professor Gabrielle Marceau (WTO) discussed WTO rules. She said that there are few rules on state trading enterprises and that, moving forward, most rules on energy will be determined by the Appellate Body and dispute panels.

Professor Thomas Cottier (World Trade Institute and the Institute of European and International Economic Law) said that energy requires an integrated approach.

Professor Peter Cameron (Centre for Energy, Petroleum and Mineral Law) spoke about the heavy role of the state in the energy sector and the issue of sovereignty in this sector. He said the principle challenge was to reconcile different interests, namely those of the energy-producing countries and the energy consumers. He also referred to the challenges of sustainability and ethical issues in the operation of businesses in this sector. Professor Cameron said that the pervasive role of the state in energy matters should be embraced rather than seen as anti-market or protectionist. On the role that the WTO could play in this sector, he called for a bigger contribution to the issue of transit, the establishment of forums for debate and cooperation between the Energy Charter Secretariat and the WTO.

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Session 41: Strategies for overcoming the African cotton crisis at the WTO and beyond: lessons from the past and strategies for the future

During this session, the participants identified the future strategies to overcome the African cotton crisis. It was largely agreed that in addition to the pursuit of the negotiations in the framework of the Doha Development Agenda (DDA), litigation before the Dispute Settlement Body (DSB) might be necessary in order to remove harmful subsidies and to get compensation.

All the speakers agreed that the African countries and the Cotton 4 had been successful in keeping the cotton issue at the centre of the DDA negotiations. Flavio Damico (Brazilian delegation) even asserted that this issue was now “synonymous” with the Doha Round. However, they all noted that one mistake had been made: the association of the commercial and of the development dimension of the matter had weakened the movement. The focus should have been placed only on the commercial side. The participants also largely recalled their wish for an early harvest focused on least developed countries (LDCs) during the next Ministerial Conference in December. For Oxfam’s Romain Benicchio, it would be “a step in the right direction”.

Ambassador Vokouma (Burkina Faso and C4 Coordinator) made various recommendations for the future: to carry on the negotiations in the framework of the DDA; to lead awareness campaigns and lobbying activities aimed at the United States and the European Union; to secure the support of different groups (ACP, African countries etc); and a better appropriation of the issue by political leaders.

On his side, Dr El Hadji A. Diouf (2ACD) called for action before the WTO Dispute Settlement Body. This action was deemed urgent as the US might remove the litigious law on cotton subsidies after their condemnation following the case brought by Brazil before the Dispute Settlement Body. It should be a collective action by African countries; not an act of animosity but just a way to get compensation for the harm caused to them until now. Officials present in the room confirmed that this possibility was being discussed in political circles.

During a series of questions and answers with the audience, potential competition from the Chinese cotton industry was confirmed by Ambassador Vokouma. It was also specified that the pursuit of the negotiations and litigation were not mutually exclusive and had to be led in parallel. Finally, the development question should not be abandoned but pursued in other forums.

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Session 42: Preparing For Rio 2012:  Trade Opportunities and Challenges in a Green Economy

This session considered the economic and trade prospects, challenges, and opportunities presented by the 2012 Rio Conference, and what role the international trade community could play in the Conference. All panellists concurred that the ‘Green Economy’ is an elusive concept that implies vast potential benefits as well as “detriments”. It thus presents a compelling agenda for the international trade community to address. In this regard, the WTO and other institutions should work together to bring coherence and legitimacy to the debate. 

There is no shared understanding of the term ‘Green Economy’. In the context of Rio, it can be conceptualised as an economic system that functions to deliver optimal environmental, employment, and social outcomes. As economic growth and inclusiveness are inherent parts of this concept, it buttresses the related model of sustainable development.    

Scientific support for ‘green’ economies is increasing, as these models can effectively address the gaps contained in current economic models. Even so, political support remains the main challenge. This is largely attributable to trade concerns, such as: 1. increased implementation cost and compliance complexity of ‘green’ norms, standards, and technical regulations; 2. investment challenges; and 3. trade competitiveness concerns. 

Other issues include technology transfer (access and affordability) and IPR issues, as well as the possibility that progressing green economy measures may strain current multilateral trade and dispute settlement systems.  

There is widespread agreement on the common ‘green’ goals of reducing pollution and natural resource depletion, and having a more equitable economic development. The following are steps that the public, industries, local and national governments and agencies, and international institutions can take to promote these ends:

1. Increased leadership at all levels (international, national, and public) to promote green growth. 
2. Identification of public and private investment sources, coupled with a potential reworking of the present investment framework. 
3. Viewing trade as advantageous to promoting the green economy, and increasing information sharing and harmonization.

4. Promoting innovation and technology transfer of environmentally sound technologies, including through the collection, use, and dissemination of bilateral and regional green development initiatives at the international level.

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Session 43: Achieving Food Security through World Markets

The focus of this session was the question of whether trade can contribute to food security at a global, regional and country level.

David Orden (IFPRI) presented the key conclusions of his recent book (with D. Blandford, T. Josling and L. Brink) on WTO disciplines on agricultural support. He noted that WTO definitions could have a significant impact on the way (including the level) that the support was notified to the WTO. The Doha Development Agenda (DDA) could create a significant constraint on Norway’s domestic support, but little impact on Japan and the EU following their past policies changes. Finally, he said that the US level of support was highly dependent on prices.

David Laborde (IFPRI) said that trade was a source of welfare, cheap food, stable food supply and productivity gains, all elements that contributed to food security. In that regard, concluding the DDA would therefore have positive consequences (agriculture, but also trade facilitation). Export restrictions exacerbate price spikes and WTO rules should be tightened. Free trade is necessary to achieve food security as food security is necessary to achieve free trade.
Josef Schmidhuber underlined the drastic change in the market environment since 2007 and said that trade rules had to be adapted to this new context. Different countries suffered differently from the food price spike. He suggested that international agricultural organizations should work to better define what food insecurity is, better identify the causes of market supply shortage, tighten up the notification process, and create more market transparency.
Frank Von Tongeren (OECD) agreed with the previous panellists, especially on the need for WTO members to make further reductions of support in both developed and developing countries, the need to reorient the focus of current agricultural rules and the objective of diversifying food supply.

Dr Maximo Torero (IFPRI) noted that trade is necessary but not sufficient to ensure food security and welcomed the efforts made within the G-20 to improve transparency in agricultural trade information.

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Session 44: Africa, Emerging Economies and Trade in Natural Resources

On the question of trade in natural resources, the panellists agreed that there was a need for better governance in this sector, better social policies and that emerging economies could help African countries move in this direction.

Phelisa Nkoma, a human rights activist in South Africa, spoke about the decline in terms of income generated from natural resources and the need for investment in industries other than “extractive”. She called for a “reformulation of re-engagement strategies”, taking into account current realities. Furthermore, there was a need to revise the taxation system in many African countries. If done well, this could produce positive effects at the community level, she said.

Netsanet Kibret (Horn of Africa Regional Environment Centre & Network) stated that the problem associated with natural resources is the lack of infrastructure and how the most important stakeholders, the citizens, do not have a say in natural resources nor do they benefit from the income from this sector. She stated that if all actors collaborated, there would be a massive improvement in people's standard of living.

Nitya Nanda from the Energy Research Institute in India spoke about the change in paradigm and said that previous models of exploitative rates paid to developing countries for global traded resources is no longer the case as rates are now in sync. He underlined the “fair assistance” given by emerging countries, which did not involve conditionality, but was based on “sharing experiences”.

Professor J. George (Institute of Economic Growth, India) called for a move towards sustainable trade in natural resources where people are put at the centre of policies, and where there is a “win-win” situation for all parties.

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Session 45: Proposal for a WTO Agreement on the Supply of Knowledge as a Public Good

James Love, Director of Knowledge Ecology International, started the session by noting that global public goods are generally undersupplied because of sovereignty and free-rider issues, and that this is especially so in the case of knowledge. Although the private sector has been active in supplying knowledge in some cases, such as Wikipedia and Creative Commons, this effort is insufficient. He suggested that such an agreement under the WTO could operate with standardized and sui generis offers, depending on the area concerned.

José Estanislau do Amaral, Counsellor at the Permanent Mission of Brazil to the WTO, considered it as still a very early proposal, since no draft agreement or definitions were included, making it difficult to comment on in detail. In general terms, he considered that the proposal deals in fact not only with the supply of global public goods, but also with their access, two issues which should be treated separately. Furthermore, he considered that the WTO might not have the experience in dealing with the supply side of economics, since no agreement of this nature currently exists under the organization’s mandate. He also stressed that this is one initiative among many others, and that sectoral efforts such as under WIPO have to be taken into account. He considered it a proposal absolutely worth pursuing, which will need refinement before further discussion can take place.

Shandana Gulzar Khan, Legal Affairs Officer at the Permanent Mission of Pakistan to the WTO, noted how the proposal was very much in line with the topics of this year’s Public Forum, in the sense of the challenges to the multilateral trading system. She looked into several of the instruments covered by the WTO, finding not directly an inbuilt mandate for the proposal, but enough references and key words that cobbled together could be used to further its pursuit. The best time to do so would certainly be post-Doha, and at a moment when the confidence of the membership could be brought to this new idea.

Antony Taubman, Director of the Intellectual Property Division of the WTO, noted how stimulating the proposal is. He shared the view that global public goods are indeed under-supplied. As to the proposal as such, he underlined the complexity of defining knowledge as a public good, the several layers of meaning it may have and the value attached to it, as well as the necessary distinction with public domain. Also, he pointed at the need to carefully consider how to balance individual contributions to and benefits taken from the system, which could be possibly addressed by standardized contributions.

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Session 46: Closing Session

The closing session began by presenting different aspects of this year’s event; it hosted the award ceremony for the video contest and launched the WTO Youth Ambassador Programme. Before the panellists provided their reflections on the main points raised in the past three days’ discussions on each of the Forum’s four broad themes, a video clip of highlights from various sessions and interviews with participants was shown.

Asked to comment on the Forum’s debates on food security, Lee Ann Jackson (Agriculture and Commodities Division, WTO) said that the issue had been discussed in seven dedicated panels as well as in the high-level sessions. The context for the debate is challenging: 950 million people are hungry today, with a projected world population of 9 billion in 2050, with climate change altering conditions for agriculture. She said that the discussions highlighted that the policy landscape for food security issues was changing, amidst economic uncertainty, the increasing significance of biofuels, and the growth of financial derivatives linked to agricultural products. The idea was raised that governments would do well to spend more on rural infrastructure. The effects of biofuel subsidies were hotly debated. Also highly contested was the role of financial speculation on agricultural prices, with one economist saying that some speculation helped to stabilise prices, but there could well be such a thing as excessive speculation. Market information systems for agriculture might help to control food price volatility. In terms of trade rules, export restrictions were repeatedly mentioned, with analysts suggesting that uncoordinated export restrictions exacerbated the effects of food price swings in 2007-08.

Patrick Rata (Trade and Environment Division, WTO) said that some of the common points raised in the five panels on natural resources trade were that the share of natural resources in world trade was rising, and that the sector has important implications for sustainable development. One of the issues raised was the need for “balance” in utilising resources without depleting them to the point of exhaustion or damaging the environment. Policies that foster eco-innovation and reduce resource consumption were discussed, as well as the role for the WTO at this intersection. Climate change and trade measures were also raised. The durability of the current high level of commodity prices was also discussed.

Hubert Escaith (Chief Statistician, WTO) said that considerable progress has been made in measuring the extent to which global value chains are producing goods that can only be described as ‘Made in the World’. It was demonstrated, he said, that a country’s industrial competitiveness now depends also on the competiveness of all suppliers, including those of services, together with the quality of imports. More and better imports can boost the value added of exports, Mr Escaith said. The result is that protectionist policies may hurt domestic companies more than they help. Another point raised was that regulating trade separately from investment is impractical, with some suggesting that the absence of investment in multilateral trade rules was driving some towards bilateral and regional agreements. On the flip side, the ‘spaghetti bowl’ of rules of origin arising from multiple regional trade agreements was also criticised. The role of government was also highlighted, particularly the fact that the right mix of policy — not least, infrastructure and human capital investment — can help small developing countries lacking large domestic markets to take advantage of global supply chains. Unemployment in developed countries was heavily debated.

Looking ahead to the future of the WTO, Said El Hachimi (Information and External Relations Division, WTO) noted that over half of the 46 sessions organised at the forum dealt with the evolution of the multilateral trading system. One of the aspects focused on was the near-term fate of the Doha Round. Pascal Lamy stressed that negotiations do not die; they simply do not conclude. But even if the talks do not conclude, the issues they cover will need to be addressed. A second aspect focused on was what many dub ‘21st century trade issues’, looking at the blurring of the lines between trade policy and issues like food security, climate change, and currency values. The changing geopolitics of the global economy - driven above all by the rise of emerging economies — was also discussed. Some talked about potential institutional reforms for the WTO. However, Pascal Lamy thought that procedural reforms might be more achievable than fundamental institutional changes to core principles like consensus-based decision-making. Finally, considerable attention was paid to preferential trade agreements. One business representative surprisingly described the proliferation of such accords as a “horror” for the private sector. Participants debated potential roles for the WTO in monitoring such agreements, and the evolution of a regulatory spaghetti bowl rather than a tariff-based one.

When the talk was thrown open to the audience, MIT Professor Nicholas Ashford warned that employment and purchasing concerns would be of huge importance in the decades to come. Green economic transformations that fail to deliver employment growth would be unlikely to receive much support. Trade, industrialisation, and the nature of the industrial state need to be re-thought to ensure that large proportions of populations can afford to get goods and services, he said. It is not enough for stock exchanges to show positive rates of return.

Mr Escaith sounded a historical note, observing that Karl Marx’s dark predictions that capitalism’s exploitation of workers would lead to its own doom were ultimately demolished by Henry Ford, who increased workers’ wages so that they could afford to buy the cars they made. In the new world economy, building new governance will be necessary.

In conclusion, Lee Ann Jackson pointed to the challenges of collective action, and suggested that the Forum provided a chance for participants to see if their own ideas were shared by others, and facilitated the development of ‘collective hunches’ that could point the way to solutions. Patrick Rata recalled that the Public Forum was established to provide a voice to other stakeholders in the WTO. Said El Hachimi highlighted the networking value of the simultaneous presence of NGOs, government officials, parliamentarians, and others. He cited the fisheries subsidies negotiations as an example of how an NGO issue entered the WTO agenda. Maria Perez-Esteve (Public Forum Coordinator, WTO) thanked WTO staff who had worked on the Forum, but above all the public for their participation. “This is your forum, and we hope to see you again next year.”

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