WTO NEWS: SPEECHES — DG PASCAL LAMY

OECD Ministerial Council Meeting — Paris

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Just a few months ago, one of you around this table offered me a video of a movie called “Groundhog Day”. In this film the main character is forced to relive the day over and over again until he learns to give up his selfishness and become a better person. Reading my notes of last years' OECD Ministerial Conference I thought little had changed and the Doha Round was becoming like a Groundhog Day!

Jokes apart, I believe that a year later three fundamental elements have changed which lead me to believe that we are getting to the moment of truth.

The first new element in the landscape is a severe worsening of the economic climate and the confidence levels in the world economy. This was confirmed by OECD Economic Outlook released just yesterday.

In this period of increased financial uncertainty, the rules-based trading system of the WTO provides a hugely important source of economic stability for governments, for business and for consumers. In the current circumstances, counting on the WTO and on concluding the Doha Round is the nearest available message of confidence we can send.

The second new element is high commodity prices, including oil. The FAO conference which took place in Rome yesterday reminded us of the pain that soaring food prices is causing all around the world, with poorer, net food importing countries suffering the brunt of the shock.

Here again, long term, trade can be part of the solution. In order to cope with soaring food prices, supply must adjust to demand, and the transmission belt from supply to demand, whether domestically or globally has a name: trade. For this to happen, trading and opening markets will help. Easier, more open trade can strengthen the production capacity of developing countries, rendering them less vulnerable.

Through greater and fairer competition, international trade can help lower food prices. But all of this presupposes that the trade-distorting agriculture subsidies that have given an unfair advantage to rich world farmers will be tackled. It also presupposes reducing import tariffs for agricultural products. These two objectives are a central part of the Doha Round.

The third new element is the technical maturity of the Doha negotiations. A year later and after innumerable meetings and several revised compromise papers on agriculture and industrial products, the negotiations are reaching a point where Ministers could soon meet to agree on what we call the modalities in these two areas.

I must nevertheless mention that for this to happen, we still need to prepare the ground for a ministerial engagement, in particular in the area of industrial products. The next two weeks will require an intensive engagement by senior officials in Geneva. And I would be grateful if all negotiators around this table could ensure that your senior officials have marching orders to work in Geneva as from Monday 9 June in full swing.

We all know we have little time, but we all know that what remains to be done is achievable and limited, compared to what we have already managed to build together through these last seven years of negotiations.

As we prepare to enter into this decisive phase of the negotiations, let me make four comments on what I see are frequent oversimplifications of this Round.

My first comment is that, contrary to a widespread commonplace idea, this Round is not just about developed countries “paying” in agriculture and developing countries “paying” in industrial products. Developed countries will also make concessions in the area of industrial products, just as developing countries will also be reducing some of their tariffs in the area of agriculture.

My second comment has to do with another general belief that is portraying this as a North-South Round. I clearly see an important North-North dimension, both in agriculture and in industrial products; but I also see a strong South-South component in these two areas. There is a multidimensional aspect in these talks.

Thirdly, I wish to stress that the Doha Round envisages flexibilities for both developed and developing members and not only for developing members. These flexibilities are present in agriculture subsidies and in agriculture tariffs for developed members. In fact, flexibilities are safety valves to ensure an overall level of ambition, which is why they have to be carefully calibrated.

As we prepare to establish modalities in agriculture and industrial products, we should not forget that these modalities, albeit being important components of the agenda, are only a few of the around 20 topics under negotiation. Beyond Agriculture and industrial tariffs, we will also need to advance in the area of services, where I hope the signalling conference, which will take place at the time of modalities, will pave the way for improved revised services offers, thus preparing the final services package. Services are an important part of our economies and the Doha Round offer the possibility to further unlock its potential.

And there is also rules on anti-dumping, fisheries subsidies, trade facilitation, special and differential treatment, environmental goods and services, to just name a few.

Even on agriculture and industrial products, modalities are a stepping stone to allow governments to prepare detailed schedules of commitments. All these boats will need to reach the shore at the same time, and nothing is agreed until everything is agreed.

We have a lot to do and little time to do it. But I remain convinced this is doable. I hope to see renewed impetus coming from the numerous meetings which would have taken place in Paris this week. And I hope, Christine, that we will have concluded modalities before France takes over the presidency of the EU on 1 July. But if we have not, I guess you better start getting ready!

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