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IPU Steering Committee of the Parliamentary Conference on the WTO

I represented the UK Parliament at IPU Steering Committee on the WTO in Geneva in the wake of the WTO Public Forum. The committee met to prepare for the full parliamentary meeting on the WTO which will take place on 15/16 November and the programme for 2013.

The Deputy Director General of the WTO, Alejandro Jara gave the Committee an update on recent WTO developments. Jara fielded questions from colleagues on his report. I queried why Pascal Lamy’s Panel of 12 reviewing the stalled Doha Round talks contained no representation NGOs, a matter raised vigorously in the Public Forum. Whilst Jara was relatively pessimistic on Doha, he did assert that trade was still increasing at some 3% p.a. equal in size to trade in Africa; and that emerging countries were still expanding more than the developed world. He countered the recent declaration of The Economist that Doha was dead by affirming that Doha was “not dead but deadlocked” and vigorously defended the role of the IPU, by indicating the failure of many parliaments to address trade issues, despite the established fact that trade generates wealth and jobs which are so sorely needed worldwide. It is true that there were few politicians at the WTO World Public Forum, as I noted.

The Committee next turned to the papers to be submitted to the November meeting illustrating the theme of “Is Multilateralism in crisis?” Dr Paul Rubig (an old colleague of mine from the European Parliament) spoke to a discussion paper on jobs, growth and poverty reduction. Responses including mine referred to the role of small businesses in trade. SMEs are often seen as domestic enterprises, but their role in trade is significant given their position in supply chains. Indian parliamentarian Shri Chacko’s paper focussed on similar themes. Finally, we appointed Burkina Faso MP (and former Trade Minister) Benoit Ouattara as draftsman for the emerging conclusions.

Pascal Lamy and an excellent Panel got the Forum off to a cracking start. Former President of the Swiss Federation, Ms Calmy-Rey welcomed colleagues to Switzerland and gave a compelling address on the nature of Trade. Switzerland’s exports relied heavily on added value: watches, chocolate and coffee. She also illustrated how currency fluctuations could undo all the good work of trade liberalisation and bringing down tariff barriers. Switzerland suffered in 2006 from the destabilising appreciation of the Swiss Franc such that the decision was made to shadow the Euro.

A very illuminating contribution came from Nicholas Staheyeff, VC and CFO of eBay International. His repeated calls to Moderator WTO Chief, Pascal Lamy, for the WTO to remain active in maintaining an effective rules-based system of trade liberalisation was telling. He certainly understood the importance of the role of the WTO as rule-maker, enforcer and dispute-settler. In response to Stayeff’s declaration that eBay was a relatively new trade platform (“We bring the world of sellers to the world of buyers”) Lamy replied that world that whatever the changing trading platforms, certain rules indeed certain underlying assumptions about free and fair trade would need to be retained and strengthened as indisputable principles. Stayeff’s comment that some 10 billion $s’ worth of trade is done through mobile phones was pertinent.

Major issues covered during the meeting

Should the WTO continue?

Was it too old-fashioned and created in different times? Was it in a state of “Viable Irrelevance”? Was it a creature of the USA/EU axis? Did it rely too much on litigation rather than legislation? Had it outgrown its impetus for establishing rules-based competition and retreated complacently into mere dispute resolution?

Answers ranged widely throughout the 2 days. But many spoke up for the WTO’s enduring capabilities. Interestingly, the opening panel summed up the mood by dividing into those who were “carefully optimistic” and those who were “carefully pessimistic” about the WTO’s role and future.

Should we continue to support Multilateralism?

Should we entertain alternatives like Plurilateralism and Bilateralism? Do these alternatives undermine Multilateralism or might they indeed unblock the current barriers and so lead to a desirable an ultimate multilateral outcome. Allied to this, what do we do about the stalled Doha Round? Do we still rely on achieving a Single Agreement? Or do we accept that reasonable advances are being blocked by agreeing everything all at once?

One session I attended, support was given to an elite group of some 14 countries who accept in total the acquis WTO with no buts nor quibbles. This elite then trade amongst themselves with full confidence.

Was the proliferation of Institutions holding up trade liberalisation?

Were some institutions past their sell-by-date? The United Nations was frequently criticised as ineffective. But is that not the fate of any over-arching institution?

Were the voices of the Business community too absent from the WTO?

The eBay speaker was a rare occurance. Similarly, were the NGOs kept out of the discussions on trade? A fierce letter circulated during the Forum by some 30 signatories testified to this anxiety.

Labour Rights, the Environmental and Green Lobbies featured thinly. When mentioned, they were often invoked as frustrating Behind the Borders Barriers.

The ever changing nature of Trade

40% trade is intermediate, awaiting value added as final exported good and Trade Flows e.g. increased South-South trade; recalibrating the simplistic notion of Exports good, Imports bad (the European Automotive Industry illustrates the notion that few traded goods with added value are the product of one country.

Has Global Co-operation Failed?

Some support the notion of Subsidiarity applying to trade. Domestic trade needs no wider context; neighbours require bilateral; regional, plurilaterals; and place those goods and services in multilateral WTO context only if a lower level inappropriate. An interesting and occasionally successful departure is the appearance single interest groups of trading countries e.g. the Friends of Fish and the World Forum of Dams.

The Importance of Domestic Competition Laws.

In 1995 only 35 nations had such legislation; now some 110 countries enjoyed protection of anti-competitive laws.

In Conclusion

I was impressed with the vibrancy of the WTO Public Forum and the quality of the plenaries, workshops and contributors. It was particularly engaging to note how many young people were found within the Forum, which in part leads me to the conclusion that the future Trading across nations is in safe hands if young developing nations and people do not think that World Trade is a moribund subject or indeed, even, in decline.

Lord Harrison