In his September 16 address before the 55th Session of the United Nations Conference on Trade and Development (UNCTAD)1, WTO Director-General Pascal Lamy announced his intent to call back the 152 member States’ trade ministers to bring the Doha Round negotiations to closure.
“The reasons why we must conclude the Round are becoming more critical by the day as economic and financial outlook continues to deteriorate,” indicated Pascal Lamy. Indeed, Lamy worries that, in the current financial upheaval, nations give into the temptation of protectionism, as was the case in the 1929 crisis. Yet, as stated by the Director-General at the WTO Public Forum on September 24,2 the important lesson of the Great Depression is precisely that “protectionism and economic isolationism do not work”.
By inviting the international community to rapidly bring the Doha Round to a close, Pascal Lamy is making a strategic mistake on two levels.
First, while he is right in calling on decision-makers to resist the siren calls of protectionism, one must guard against falling into the opposite excess. The current financial crisis has persuaded most international leaders––such as IMF’s Managing Director Dominique Strauss-Kahn and UN’s Secretary-General Ban Ki-moon––that we must return to a regulated capitalism and to a stabilized international cooperation, as wall as calmly rethink the debate issues in terms of international conditions. It is thus surprising that Pascal Lamy, in the framework of the current food crisis, continues to plead for a rapid conclusion of the Doha Round and an increased liberalization of trade, at a time when consequences could prove even more ill fated than the financial crisis itself.
Then, this headlong rush concerning liberalization shows a binary approach––theoretical and ideological––where total liberalization in a multilateral framework represents the sole alternative to isolationism and protectionism. There are many other options and the fact that WTO’s Director-General is not aware of them is a discouraging fact.
1 55th Session of UNCTAD's Trade and Development Board, “The evolution of the International Trading System and of International Trade from a Development Perspective”, September 16, 2008 http://www.wto.org/english/news_e/sppl_e/sppl100_e.htm
2 Pascal Lamy, “Trading into the Future” http://www.wto.org/english/news_e/sppl_e/sppl101_e.htm