World Trade Organization Director General Pascal Lamy warned Wednesday of serious consequences if nations failed to reach agreement on a new global trade pact.
Lamy made a one-day visit to Indonesia as part of a global tour to seek commitments from key nations to resume negotiations on the renamed Doha trade development round. Indonesia, the current coordinator of the G-33, has been pushing for a resumption of negotiations, but insists on protection for the agriculture sectors of developing nations. "The question is no longer whether developing countries will be allowed to shield part of their imports from the impact of tariff reductions. The answer to this question has already been given. Yes, developing countries will have the possibility of shielding part of their tariff lines on the import side from the impact of cuts in tariffs," Lamy said. However, he also stressed that the effort to protect the interests of the developing countries should not be allowed to derail the overall objective of increasing market access for global trade. "This is where a delicate balance has to be found. We all know that we need some breakthrough before the special authority can be extended or renewed," Lamy said, referring to the U.S. president's fast-track authority to negotiate trade deals under the U.S.'s 2002 Trade Act, which is due to expire in July. "Only if key economic powers can reach consensus on contentious issues including agricultural subsidies and tariffs by then, Bush may be able to secure an extension (before Congress under control of Democrats) on his fast-track authority through December", said reliable US diplomatic sources. Lamy added he was not yet ready to call a meeting of WTO members' trade ministers and implied that global multilateral systems such as the UN, World Bank and IMF could suffer if the Doha trade round did not end in success. "The world trade system is part of the multilateral system in a world that's more dangerous and unstable than was five years ago" underlined Lamy in Jakarta. "The costs of a failure in these circumstances would probably be geopolitically high" Lamy said. "When you have a negotiation about fairness and it fails, you will have consequences that go beyond trade". Lamy admitted that protection proposals such as Sensitive and Special Products and Special Safeguard Mechanism would be included "but must not negate the overall goal of market access".