June 8, 2001
The director-general of the World Trade Organisation (WTO) has called for urgent changes to existing multilateral trade agreements. During a speech in Geneva, Mike Moore said: "Don't assume that the world trading will look after itself. Don't fight yesterday's battles and neglect tomorrow's opportunities."
He added that "failure to launch a new round [of multilateral trade negotiations] could also jeopardise the multilateral trading system itself". Mr Moore would like to see a new round launched at the WTO's next ministerial conference in Qatar in November.
Stalled talks
In March, a WTO meeting in Geneva to revive plans for a new round of global trade talks stalled. This followed the abandoning of attempts to reach a new world trade agreement at the Seattle meeting in 1999.
Mass anti-globalisation demonstrations disrupted the conference, which also revealed differences in approach between the world's two leading trade blocs, the United States and the European Union. There was an even wider gap between both of these blocs and the developing world, which makes up the majority of the WTO's membership.
Challenges ahead
Mr Moore's speech on Friday was peppered with references to the need for further trade liberalisation, particularly as the global economy faces a sustained downturn. He said that high growth seen last year was "dimming the prospects for world trade in 2001".
The volume of trading in world merchandise is expected to grow by 7%, in contrast to an estimated 12% during 2000. Mr Moore also highlighted concerns about the impact of a slowdown in the US. "The US economy, motor for the world economy, is stuttering. A recession in America could export trouble to the rest of the world," he said.
Free trade vs. regional agreements
The dangers of such contagion could damage trade liberalisation by prompting an increase in national protectionism, he noted, reiterating his scepticism of discriminatory regional deals. In theory, the advantages of free trade mean that consumers can buy the best and most competitively priced products, while companies are secure in the knowledge that they have a broad market for their products.
Regional trade zones can run counter to this, because they have more clout to exclude goods from countries outside their boundaries. Efforts earlier this year by the US and its partners to create the trading zone Free Trade Area of the Americas have already prompted warnings from Mr Moore.
"If globalisation underscores nothing else, it is the logic of global rules for global firms operating in a global marketplace," he has said. In his speech on Friday, he emphasised that WTO agreements "ensure that the trading interests of large and small countries are equally respected".
Arguing for a new round of talks
His arguments for launching a new round of talks in Qatar were both concerned with the need to alleviate poverty and to boost the global economy. "Poor countries need to grow their way out of poverty. Trade is the key engine for growth," he said, adding that products of developing countries face obstacles in entering the markets of the rich.
Citing a study by Michigan University, he also argued that cutting barriers to trade in agriculture, manufacturing and services by a third would boost the world economy by $613 trillion. Concluding his push for a new round of talks, he said that the WTO would make "every effort to hammer out an agenda for a new round so Ministers can put the final touches to it in Qatar".
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