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Pascal Lamy’s shock therapy for the WTO

The 7th WTO Ministerial officially kicked off at 3 p.m. Geneva time (9 a.m. EST) with a speech from Director Pascal Lamy, in which he repeated his sales pitch that in economic crisis there is an opportunity — no necessity — to “conclude the Doha Round successfully and soon.” Though this is not a negotiating round, there is still much at stake in Lamy’s “taking stock” exercise. No less than the very legitimacy of the WTO, and Doha in particular. It’s partly why so many civil society groups are here in Geneva. Outside and across the street from the Ministerial’s security perimeter is a tented staging ground for daily actions against the WTO from groups who believe the exact opposite of what Lamy believes — that what the world needs is a full stop on the negotiations, a rethink, a turnaround… The idea has more support among WTO members than Lamy is willing to admit publicly.

Leo Broderick and I attended an International Labour Organization conference on Sunday night that asked, Can the WTO promote decent work? Panelists included moderator Guy Ryder, general secretary of the International Trade Union Confederation, Pascal Lamy, Celso Amorim, Brazil’s minister of external relations, Rob Davies, the South African minister of trade and industry, Kari Tapiola, deputy director general at the ILO, Ambassador Alfredo Chiaradia, Argentina’s secretary of trade and international economic relations, and Eckart Guth, European Ambassador to Geneva (new title).

“The Social crisis is a crisis of jobs,” said Ryder in his introduction, explaining how even at the G20 (the finance group, not the Group of 20 developing nations that emerged out of the Cancun ministerial) a “bonfire of orthodoxies” has taken place. Thrown to the flames are many certainties of neoliberalism, including that liberalizing (deregulation) always produces wealth. But the exception is trade, he said. Despite the lack of progress on the Doha round, and the ravages of WTO-sanctioned financial services deregulation, powerful G20 countries like the EU and U.S. are still emphasizing market access for their companies into new markets versus the development and jobs agenda pushed up the ladder by developing countries since Seattle.

The ILO representative spoke next about how the WTO should prioritize the social dimensions of globalization and less on sanctions-based dispute settlement, though his presentation wasn’t especially moving. He was followed by Ambassador Guth, who admitted that he will only be in his new role for another month before retiring, after which he would be able to speak his mind instead of the party line. We obviously got the party line, which was that trade is at the “root of accelerating recovery” and that completing Doha  would be the “best contribution of trade policy to global recovery.”

The most popular speaker of the night was probably the South African industry minister, Rob Davies, who bluntly predicted resolution to the jobs crisis will lag behind what most will call economic recovery. He also said flatly that like the global economy, the WTO was “at a crisis” created by the growing “chasm” between development objectives and the current negotiations. Major irritants include more carve-outs for U.S. and EU agricultural subsidies, additional restraints on developing country tariffs in the NAMA talks, and a bigger emphasis on market access for developed countries, particularly the U.S.

“We have said flat out that there will be no deal without a solid result on services which would result in new market opportunities, but we believe that a positive outcome is still achievable,” said Ron Kirk last month.

That includes financial services.

In complete contradiction to what even the G20 economic crisis talks have concluded — that we need to reregulate global finance to better control what types of products can be bought and sold — the Doha round seeks to expand the WTO’s Financial Services Agreement and ban signatory countries (including Canada) from ever being able to say no to a type of derivative or to create new regulations in the financial sector that don’t already exist. Democracy Now interviewed Lamy about this very controversial issue on today’s episode, and Public Citizen continues to draw attention to the apparent contradiction with what most world leaders are saying about the need for stricter rules.

Davies suggested two more trade theories that should end up on the bonfire. The first is the “bicycle theory”, which says that if we don’t continually liberalize global markets then protectionism will creep up on us from all directions, slowing our pace until the bike stops and we fall down. This reminds us of Naomi Klein’s “shock doctrine” — the crisis is upon us, we should pedal even faster in the same direction or the catastrophe will catch up with us. Don’t think — just do it! The second disposable truth is the version of development conceived in the Doha round itself.

Davies’ solution is, as already mentioned above, “policy space” — the right to protect those industries a country would like to grow, or subsistence farming that feeds the population at a good price, by discouraging cheaper imports from more developed countries. South Africa in particular is looking for more freedom to regulate financial services. And here the Brazilian minister, Amorim, agreed that while Lamy insists that liberalization is not the same as deregulation, the large economies (EU, US) don’t make the distinction when demanding concessions as part of bilateral negotiations.


The support for policy choice is obviously not limited to South Africa. And though Lamy and others highlighted a G33 statement as proof that developing countries want to see an end to Doha, it is clearly conditional on development needs being addressed:

“We urge WTO Members to respect commitments to advance the DDA in addressing the capacity of the current multilateral trading system in tackling the development needs of developing countries,” said the statement. “WTO Members shall not give in to any attempt to dilute the development Mandate of the Round nor compromise the agreed DDA mandates on special and differential treatment, particularly on Special Products (SP) and Special Safeguard Mechanism (SSM)…

“We believe that collective effort to reach the end-point of the DDA Round will very much depend on the degree of real re-engagement and flexibility of all Members as well as on the leadership of larger players, particularly major developed countries.”


After the ILO session, Leo and I headed over to the nearby Canadian mission to Geneva for a reception where International Trade Minister Stockwell Day and Agriculture and Agrifood Minister Gerry “death by a thousand cold cuts” Ritz were to speak. Only Ritz showed and explained that Day was coming in this morning. Leo found out that Day isn’t even staying the week because he’s heading to China with Prime Minister Harper on Tuesday (where the action is, you could say).

We did run into some interesting people at the mission, mostly from industry associations like the Chicken Farmers of Canada, Egg Farmers of Canada and Alberta Barley Commission. Agricultural groups in Canada who benefit from supply management policies feel they have to shadow Canadian ministers on every trade trip and it’s a shame to say they probably do. Canada’s commitment in Parliament to upholding supply management, which guarantees stable prices for consumers and producers, is hardly set in stone. Most trade observers feel that at the end of the day, Canada will want to be seen as a team player by signing a final WTO agreement (if it comes to that), which would likely endanger current policies of supply management.


The Globe and Mail’s campaign against Canada’s supply management system picked up this week with the publication of a Conference Board report suggesting the policy hurt Canadian competitiveness. The Globe ran an editorial today in an editorial called “MPs as trade barriers“, which suggested, as the National Post usually does, that Canada’s defence of supply management is purely about politics and not interfering with powerful Quebec dairy, egg and poultry producers.

Sure there may be a few grains of truth to this, but the argument against the policy is ideological. Bringing in the Conference Board shouldn’t convince anyone to the contrary. Supply management is just a convenient whipping post for a Canadian media that has so far ignored the Geneva Ministerial almost completely.


Meanwhile, groups continue to confront the WTO (and police) outside and inside the WTO meetings. Today, on Leo’s suggestion that we move around to stay warm, a fisher folk protest crossed the street with its “boat” and made some noise in front of the gates. Police in riot gear were brought in to supplement the otherwise modest security, and within a few minutes we were being marched across the highway to the opposite sidewalk. As you’ll see in the video, police appeared to arrest two young men, though we don’t have any news on their situation.

Inside the WTO, Our World is Not For Sale unfurled a “WTO Turnaround” banner and sang their own version of Jingle Bells that began, “No New Round, Turn-a-round, The world has had enough…”