Q&A: Pascal Lamy, Director-General, World Trade Organization

With G-20 leaders agreed on yet another deadline, of 2011, to close the Doha round of negotiations, the World Trade Organisation’s (WTO) director general, Pascal Lamy, tells Nayanima Basu that countries are now more eager to close the deal, since trade is the only option for rapid recovery from the global economic criss. Edited excerpts:

G-20 leaders agreed to 2011 as the next "window of opportunity" for closing the Doha deal. Looks like the building only has windows and no doors. Are there any doors and who has the key?
That is their (G-20 leaders) stance and they have given the signal after a substantial discussion and not just as a communiqué. That is the unanimous signal they wanted to send. This sort of negotiation only unfolds as a function of political determination on one side and further technical cooking on the other side. These are the two ingredients needed to wrap the negotiations. We had the first ingredient in Seoul.

The issue is now to translate this into the cooking machinery in Geneva, so that these signals are followed by not only concrete discussion, but negotiation. A negotiation is about give and take, so that’s what needs to happen in Geneva. Political determination is needed to translate into enough flexibilities for the negotiators to give and take and this we will see in the coming months.

It seems that US is finally on board, with President Obama’s assurance to close Doha at the G-20. However, he recently lost the elections; their (US) rate of unemployment is still at nine per cent, besides other economic imbalances. In this situation, would they be keen to close the Doha round? More, do you think it would be wrapped up during his first term or do we have to wait for a second one?
I have to believe Obama as I have to believe others. He gave these very clear signals in Seoul which he had not given before. Now, the proof is in the eating. At the end of the day, like others, they have to do the necessary give and take. They have been clear that given what is on the table for the moment, they are not clear enough on what they get in market access from the emerging countries.

I don’t think this is any discrimination, just that these are the markets which are the biggest and growing more rapidly. We are there for a right reason because in some cases, emerging countries are entitled to shield some tariff lines from reduction.

The US position is, ‘Please tell us which are those lines, so that we can assess what is the resolve for the market access round’. They would need do this because their own constituencies would be watching very carefully and they would only do that as part of the end game.

So, are we going to see an all-new approach to the negotiations now, keeping the US position in mind? What about the consensus built up in these nine years?
The negotiations never stop. What is on the table remains. But we need to build on that. As leaders discussed in Seoul, this needs to be supplemented, so that a package is built which they can all take back home.

Is the European leadership doing enough to close the deal? Also, the European Union is still not out from financial troubles. Where do you see all these impacting when it comes to trade?
The EU crisis had to do with public finance and banking. They know they need trade to exit this crisis, as much as the US, India, China or Brazil. They have been very clear on that. They are very much part of the Seoul consensus. Well, eight Europeans were there on the table of the G-20 and that’s a lot (laughs).

You lauded Commerce Minister Anand Sharma’s efforts to reinvigorate Doha. What differences do you see between him and our former commerce minister, Kamal Nath?
This is not about any fundamental difference. In the meantime, there had been elections in India and they changed a number of things in the balance of forces. This led the Prime Minister (Manmohan Singh) to take a more engaging stance, which he did when he asked Anand Sharma to convene the meeting in September 2009. Since then, there had been this sort of positive engagement. India still has offensive and defensive interests and they will negotiate like the others, but the attitude is a positive one because it fits with the macroeconomic strategy of the government.

You said countries have kept some cards in their pockets, which they will reveal at an opportune moment. What are those cards and when do you think countries would like to play them?
All of them have got cards in their pockets. But it’s not for me to elaborate what these are and kill their game (laughs). I’m here to favour their game and not complicate it. I even have some intuition of what these cards might be. My role in this is to help them. After this period of brainstorming discussions, we need to move to the texts by the negotiating chairs, who are facilitators. After this, there will remain brackets, and that is when the final crux of the negotiation would take place. Then we would need six or seven months of technical negotiations.

When do you see all the 153 members sitting for serious negotiations again? After nine years of wrangling, do you see the same kind of energy in all?
The previous round took eight years, with a much simpler agenda. They now realise, more so after going through these testing times, the value of the (multilateral trading) system, which is probably clearer at this stage than it was before the crisis. They realised that this system has served them well, as a result of which trade is open now, as it was before the crisis. We have seen during the crisis that the multilateral trading system is the most advanced part of global governance, as compared to environment policies, macroeconomic policies and exchange rates, where the level of commitment and disciplines is still weaker.

Indian commerce secretary Rahul Khullar said in his address to Ficci last week that the negotiations were running out of steam. Do you also think so?
I agree. For the past two years, there has not been much progress. The momentum has increased since Toronto (G-20 meet) but there has not yet been any negotiation. We see that, technically, it is perfectly doable to close the deal by 2011.

There was talk that WTO would convene a formal ministerial in December or early January. If yes, when is that expected and would we see another circulation of negotiating texts on agriculture and non-agricultural market access (Nama) anytime soon?
The only decision taken is the date for the statutory ministerial, agreed upon in 2011 by the general council, which is a routine.

The exact time for a formal negotiation can only be decided as a function of momentum when we have texts on the table. They collectively believe they can wrap up the round by 2011. They all know this is the only way towards rapid recovery.

We have all exhausted fiscal stimulus, monetary stimulus is reaching its limit, so we all only have trade. The decision to circulate the revised texts rests on the chairs, but I would expect this to happen by spring time, if we want the rough 2011 deadline to match what was agreed in G-20.