By Jonathan Lynn
G20 leaders must give their negotiators more flexibility to ensure they can actually reach a global trade deal and conclude the long-running Doha round, the head of the World Trade Organization said on Monday.
The leaders' renewed pledges at the Pittsburgh summit to reach a deal were not enough, WTO Director-General Pascal Lamy told the WTO's public forum.
"It is now incumbent upon them to 'walk the talk'."
Lamy said the G20 leaders had backed an intensive work program over the next three months to close the remaining gaps and then assess the possibility of wrapping up a deal next year, as targeted.
Leaders and ministers have made a string of promises this year to conclude the Doha round in 2010, but negotiators are expressing frustration that their governments are not giving them the flexibility needed to reach a deal.
Lamy said a Doha deal, which would cut farm subsidies and industrial and agricultural tariffs, would help tackle the economic crisis by providing a bulwark against protectionism as well as help developing countries hit by the crisis.
Under existing WTO agreements, average tariffs could double from current levels, he said.
"The Doha Round of trade negotiations would not only open new markets for exporters, but also curtail some of the existing margin of manoeuvre that could take the world backwards," he said.
Going Global
WTO monitoring shows that protectionism so far has been "low intensity", with many measures but of limited impact, he said.
But trade policy makers cannot afford to be complacent as rising unemployment lagging economic recovery will boost protectionist pressures, he said.
States should fight the temptation to "go local", he said.
"We should continue 'going global'... for the simple reason that many consumers have seen their purchasing power decline, and are in need of cheaper, more competitive, goods and services, and not more expensive ones produced behind a national tariff wall," he said.
A new trade deal, cutting rich-country farm subsidies, would also help tackle the food crisis, Lamy said.
"Trade is the transmission belt that allows food to move from the land of the plenty to the land of the few. We must oil that transmission belt, and improve the foundation on which it has been built through the Doha Round," he said.
Lamy said there were now signs of recovery in trade finance, which dried up in the financial crisis and contributed to a contraction in world trade forecast at 10 percent by volume this year. But more work was needed to ensure trade finance returns to previous levels for small businesses and the poorest states.
Lamy said the Pittsburgh summit had made the G20 the main global forum for economic policy, recognizing the importance of emerging states. But changes in global governance could not resolve one of the main problems in international policy -- the tension between global cooperation and domestic policies.
There is no alternative to political leaders continuing to "crack tough nuts", Lamy said.
This tension is one of the obstacles to the Doha round, where Europe's top trade official Catherine Ashton says the lack of support for a trade deal in the U.S. Congress is constraining President Barack Obama's ability to negotiate a deal.
U.N. Special Envoy on Climate Change Gro Harlem Brundtland expressed frustration at the debates on global governance, which did not help advance the Doha negotiations or climate talks.
"It doesn't bring us forward really. We are all responsible to do what we can with the present system," she told the forum.
