Global Policy Forum

WTO says Global Crisis will Boost Doha Round


By Lisa Schlein

July 29, 2009

Meetings to revive the failed Doha Round are gathering steam in Geneva. The World Trade Organization says it has received renewed political commitments from heads of state and trade ministers to conclude an agreement by the end of 2010. Pascal Lamy, WTO Director-General, on Tuesday said the global recession had served as a reminder of the importance of the Doha talks.

"We all know this crisis is unprecedented in its width, in its depth, in its global impact. We must act collectively to send the right signals and establish an appropriate trading environment for a sustainable recovery for all," Lamy said.

When the Doha Round collapsed three years ago, world trade was buoyant and it appeared as if the good economic times would never end. The story now is very different. WTO economists predict world trade will shrink by 10 percent in 2009, something, which has not happened since World War II.

Trade to lift the world out of the crisis

WTO Spokesman, Keith Rockwell, said it was increasingly recognized that trade has been a victim of the economic crisis. At the same time, he noted trade would be an important tool for lifting the world out of this crisis.

"The market opening that will come through the Doha Round, will in effect be a global tax cut of about $150 billion. These kinds of things can be an important stimulus for economic recovery," he said.

Rockwell adds that people, by and large, have resisted taking high intensity protectionist measures because they are aware that trade is contracting and such measures would hurt the economy and hamper the recovery.

WTO warns against protectionism

"Despite that, there is a lot of domestic pressure for more protectionism in almost every country. Now, one way to keep trade open is to keep opening trade and that is what the Doha Round would do. What we need to do now is to translate this very strong show of political support into action at the negotiating table here in Geneva."

The negotiations will not be easy. The problems that scuttled the last agreement are complex and remain unresolved. Major disagreements over access to each other's markets continue to divide the rich nations from the poor ones.

While the US, Europe and Japan try to press for access to gobal markets, emerging economies like Brazil and India are reluctant to comply as long as developed countrys don't drop their heavy subsidies for domestic production.

"We have come a long way, and probably not far from our journey's end," WTO chief Lamy said. "But, we know that the last stretch will be an active and a tough one."

As a seasoned marathon runner, Lamy believes endurance and a single-minded determination to reach the goal is what will win the day.







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