Next WTO chief urges gradual approach

Date: 23/11/00

By Simon Taylor

BEFORE becoming Trade Commissioner, Pascal Lamy was known as Jacques Delors' rottweiler for his aggressive defence of his former master.

One particularly juicy leg Lamy would like to sink his teeth into belongs to the next secretary-general of the World Trade Organisation, Supachai Panitchpakdi.

At a meeting of ministers from the Asia Pacific Economic Forum (APEC) last week, Supachai may have single-handedly undone a year's work by Lamy to build support for a comprehensive trade round.

The Frenchman has notched up thousands of air miles in an effort to convince less developed and developing countries (LDDCs) to back the EU's call for a new set of trade liberalisation talks which would cover the Union's priority areas, including investment and competition rules.

But the remarks by Supachai, who takes over from current WTO boss Mike Moore in 2003, could prove fatal to Lamy's plans. Thailand's deputy prime minister and trade minister called on the EU to scale back its ambitions for a wide-ranging round, saying that some of its demands were "impractical".

Instead of Lamy's big-bang approach, Supachai said it would be more sensible to take incremental steps towards liberalisation, building on pre-arranged negotiations on agriculture and services and moving onto other areas as the possibility of agreement in those sectors became apparent. "If you are aiming at the launch of a comprehensive agenda, it may never happen, it might be difficult," he warned. "The moment you say, 'We need something in return, a new trade round', then you would kill the whole process."

Lamy already knew that getting support from developing countries would be difficult. The Union's insistence on a link between liberalisation, labour rights and environmental standards is viewed with deep suspicion by the world's poorer nations, which see such connections as attempts by rich nations to keep protectionist barriers to their markets.

US President Bill Clinton's comments in Seattle that countries failing to honour labour standards should face sanctions was probably the single event which did most to kill off the chances of a new round last year. Developing nations reacted with outrage as their worst fears of first-world protectionism were confirmed.

But since then, Lamy has been painstakingly building a fragile coalition for a comprehensive round. He claims that industrialised countries such as Brazil and South Korea share the EU's belief that investment and competition rules should be part of the next round's agenda. The Union also has wide support from the countries bidding to become EU members in the next five years.

Even if Lamy feels Supachai destroyed a year's work, many in the trade field believe that the future WTO boss was being realistic. The old US administration steadfastly opposed expanding the agenda to include competition and investment rules. Whoever takes over from US trade chief Charlene Barshefsky will probably be even more opposed to the Union agenda.

Article forms part of a survey on trade.