Global Policy Forum

By Larry Elliott

The world trade organisation is to to spend the next six months paving the way for the launch of a new round of negotiations this autumn in a make or break effort to safeguard the future of the multi-lateral trading system.

Faced with the threat of protectionism and a splintering of the global economy into rival trading blocs, Mike Moore, the director general of the WTO, said he believed lessons had now been learned from the debacle in Seattle 14 months ago, when attempts to launch a new round collapsed.

"I believe that with focus and flexibility, a new round can be launched at the WTO's ministerial meeting in Qatar in November," Mr Moore said in Davos. "We have a brief period of time but I don't see that as a disadvantage. It should help to concentrate minds."

Mr Moore's comments came as three past leaders of the Geneva-based body, together with leading trade ministers, warned that the future of the multilateral trading system would be in jeopardy unless steps were taken to launch a round quickly.

Pascal Lamy, the EU's trade commissioner, said: "The multilateral trading system has a future but it is a future which will be decided this year."

Mr Lamy said there was a growing fashion for regional trade agreements and a growing risk that the WTO would be turned into a world trade court, with "lawyers and litigators" taking over from trade negotiators. "I believe there is only one answer, and that is to launch a new round this year".

South African trade minister Alec Erwin said: "Don't underestimate the risks of the disintegration of the multilateral trading system. The law of the jungle in trade is very dangerous for weak countries."

In a joint statement released in Davos, Mr Moore's three immediate predecessors - Renato Ruggiero, Peter Sutherland and Arthur Dunkel - said: "We see danger in the present situation. We consider it is time for political and business leaders to pay attention to that danger and make the development of an adequate response a priority. Lack of attention will mean continued drift and, ultimately, increased difficulty in reinvigorating an effective, rules based system."

Mr Moore said he welcomed the support from his predecessors which marks the start of an attempt by the WTO to relaunch itself following a year of licking its wounds after Seattle.

He held a breakfast meeting in Davos with ministers from 25 countries attending the World Economic Forum in an attempt to boost political support for fresh talks which are intended to cover market access for poor countries, lower tariffs, agriculture, competition policy and investment.

"By March I want to be in a position to take stock, and by July I need to know exactly how far we have got, because that will determine the shape of the ministerial meeting in Qatar," Mr Moore said.

"We have got to go into the ministerial 95% of the way to an agreement."

The insistence on "pre-cooking" a draft agreement reflects the WTO's determination to avoid a repeat of Seattle, where fundamental differences divided the organisation's 140 member governments.

However, he believes that the deterioration in the global economic outlook - particularly in the US - has helped to make trade negotiators more willing to compromise their former hardline positions.

With George Bush's presidency only a week old, Mr Moore has yet to meet the new trade team in Washington, but is aware that the attitude taken by the US will be crucial. He is concerned that failure to launch a new multilateral round will lead to Mr Bush concentrating his energies on a regional trading bloc covering north and south America.

However, he is also aware that the US will have to scale down its demands for core labour standards backed by sanctions to become part of future trade deals if developing countries are to agree to the launch of a new round.

"Labour standards are a brick wall," Mr Moore said. "There will be no labour sanctions in the WTO."

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