Global trade talks opening in Hong Kong next week will seriously test the credibility of the WTO and Pascal Lamy, its director-general.
Expectations for the Dec. 13-18 ministerial meeting have been radically scaled down, reflecting lack of progress in the so-called Doha round of trade negotiations launched in the capital of Qatar in November 2001.
Instead of meeting key deadlines that were set in Doha for opening up world trade, the WTO's 148 members have spent the last four years squabbling over removing tariffs, eliminating quotas and ending farming subsidies.
With divergences persisting, Lamy admits that ministers in Hong Kong will not even try to reach agreement on concrete figures for slashing farm duties and industrial tariffs.
The focus instead will be on trying to break the current negotiating deadlock and getting discussions back on track, he told trade reporters in Brussels recently.
Playing the blame game is dangerous, Lamy warned, adding that instead of pointing accusing fingers at each other, WTO members must start working together to push for free trade.
Replacing confrontation with cooperation will not be easy.
The run-up to the Hong Kong meeting has been marked by increasingly acrimonious exchanges between the EU, the US and developing nations, with each accusing the other of not doing enough in the interest of free trade.
The EU is in the firing line over its offer on agriculture, which the US and Brazil as well as other developing countries say is totally inadequate.
The EU and the US are pressing developing countries to reduce their industrial tariffs and to start opening up their protected services sector.
Least-developed states, meanwhile, have complained that their trading interests are being ignored -- although the current Doha negotiations are supposed to put development first.
Lamy faces an "impossible challenge" as he struggles to reconcile these conflicting interests, says Jean-Pierre Lehmann, professor for international political economy at the International Institute for Management Development in Lausanne, Switzerland.
"Short of a miracle, the chances of anything of substance emerging from Hong Kong are very remote," Lehmann said.
All countries participating in the Doha round have offensive and defensive trading interests. In other words, most engage in a delicate balancing act which requires that they try to trade off access to their own markets by winning entry into the markets of other nations.
For a negotiation to succeed, all sides need to see some gains which they can sell to their respective governments and public.
Putting together all the pieces in this vast WTO jigsaw puzzle of free trade is not easy, Lamy admits.
But being WTO director-general does not mean he can order the organization's members around, he says. All he can do is facilitate discussions and encourage compromises between negotiators.
"It is like being an arbiter, a navigator or even a midwife," Lamy insists.
The stakes for Hong Kong are high. A repetition of the failed WTO meeting in Cancun two years ago could permanently dent the credibility of the multilateral trading system, Lehmann warns.
World business leaders, tired of waiting for progress on the global level, will press their governments to clinch bilateral trade agreements, he says.
The "big danger" if that happens is that discrimination rather than fair treatment for all will become the name of the game, he warns.
While China, India, Brazil and other emerging economies may benefit from the quest for bilateral deals, such a prospect is bad news for poor nations which will be left out of the race.
As recent US and EU efforts to clinch voluntary restraint agreements with China on textiles and footwear illustrate, a resurgence of worldwide protectionism is also possible.
"The serious concern is that in the long-term the WTO could become impotent and irrelevant," Lehmann warns.
Lamy's reputation is also at stake.
The former EU trade chief -- who took over as head of the WTO in September -- has won accolades in Geneva for quickly switching hats and espousing his new role as honest world trade with great enthusiasm.
A breakdown in Hong Kong could cast a shadow over Lamy's next four years in the world trade hot seat. It will also make it difficult to complete the Doha negotiations next year.
Taking the talks into 2007, however, is extremely risky.
For one, the fast-track authority on trade given by Congress to US President George W. Bush is due to expire in mid-2007.
Equally importantly, French presidential elections in 2007 are expected to make it even more difficult for Paris to agree to additional concessions in farm trade.
The Chinese Communist Party (CCP) continues to bully Taiwan by conducting military drills extremely close to Taiwan in late May 2024 and announcing a legal opinion in June on how they would treat “Taiwan Independence diehards” according to the PRC’s Criminal Code. This article will describe how China’s Anaconda Strategy of psychological and legal asphyxiation is employed. The CCP’s People’s Liberation Army (PLA) and Chinese Coast Guard (CCG) conducted a “punishment military exercise” against Taiwan called “Joint Sword 2024A” from 23-24 May 2024, just three days after President William Lai (賴清德) of the Democratic Progressive Party (DPP) was sworn in and
Former US president Donald Trump’s comments that Taiwan hollowed out the US semiconductor industry are incorrect. That misunderstanding could impact the future of one of the world’s most important relationships and end up aiding China at a time it is working hard to push its own tech sector to catch up. “Taiwan took our chip business from us,” the returnee US presidential contender told Bloomberg Businessweek in an interview published this week. The remarks came after the Republican nominee was asked whether he would defend Taiwan against China. It is not the first time he has said this about the nation’s
In a recent interview with the Malaysian Chinese-language newspaper Sin Chew Daily, former president Ma Ying-jeou (馬英九) called President William Lai (賴清德) “naive.” As always with Ma, one must first deconstruct what he is saying to fully understand the parallel universe he insists on defending. Who is being “naive,” Lai or Ma? The quickest way is to confront Ma with a series of pointed questions that force him to take clear stands on the complex issues involved and prevent him from his usual ramblings. Regarding China and Taiwan, the media should first begin with questions like these: “Did the Chinese Nationalist Party (KMT)
The Yomiuri Shimbun, the newspaper with the largest daily circulation in Japan, on Thursday last week published an article saying that an unidentified high-ranking Japanese official openly spoke of an analysis that the Chinese People’s Liberation Army (PLA) needs less than a week, not a month, to invade Taiwan with its amphibious forces. Reportedly, Japanese Prime Minister Fumio Kishida has already been advised of the analysis, which was based on the PLA’s military exercises last summer. A Yomiuri analysis of unclassified satellite photographs confirmed that the PLA has already begun necessary base repairs and maintenance, and is conducting amphibious operation exercises