Tour de Trade
He walked into the
Fresh off a trip from
Well ahead in this race to mend the global economy are: Cleaning the system of toxic assets, re-regulating the global financial system to avoid a repeat performance of the 2008 meltdown, and even trying to close down or limit the use of tax havens.
Those other issues however do not prevent the former French politician and European Trade Commissioner from performing his “Tour de Trade.”
Mr. Lamy aptly said that trade negotiations are like riding a bicycle: “either they move or they fall.” The key now, he says, is not to let them move backwards: “First thing we have to do is push back on protectionist measures which understandably appear here and there."
Having covered the final Uruguay Trade Round in
The key difference is that what was not covered the last time around has been swept into this attempt. More importantly,
In the G20 process, all the major players are sitting around the same table. That, in theory, should help this effort but, so far that has not been the case.
At the European Business Summit in
Director General Lamy admitted they are not breaching the rules of the WTO, but they are stretching the limits these days in various ways, like by filing more anti-dumping cases, or by nudging tariffs to protect industries such as auto-makers and textile manufacturers.
So "the DG," as his staffers refer to him, has adopted a new line that appeals in particular to developing giants like
“Keeping the insurance policy which the WTO offers for the world against protectionism; that is very important at this stage, to make sure it does not move back,” said Lamy. This is where we should watch closely. Mr. Lamy was encouraged by President Obama’s action to draw a line in the sand in terms of policy when he stood against the “Buy American” clause being put forward by the U.S. Congress.
This is where we should watch closely. Mr. Lamy was encouraged by President Obama’s action to draw a line in the sand in terms of policy when he stood against the “Buy American” clause being put forward by the U.S. Congress.
Pushing that through would have rolled back the clock to the 1930s, when the Smoot Hawley trade act exacerbated the Great Depression. Since many compare this global depression to that one, there have been great fears that policymakers would follow the same tack, ignoring historical evidence against such a move.
But, when asked directly if
Until the President of the
The DG makes another valid point: While G7 countries, especially the
Against this backdrop, regional trade blocks should not place all their bets on the Doha Round.
The Greater Arab Free Trade Agreement has 18 countries of the region loosely agreeing, at this stage, to create their own market of nearly 350 million people. It looks promising on paper.
As Saad Hariri, leader of the Future Movement in
“Regional integration and opening trade globally are two things that have to go together,” notes Mr. Lamy. There is not the threat that regions will live in isolation as the world trade talks stall.
But how about getting past the final two or three hurdles to get a deal done in 2009?
Calmly the DG states, “We are 80 percent of the way, but we have a couple of tough nuts to crack.”
ABOUT THIS BLOGJohn Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
SHOWTIMESFriday: 08:15, 19:45
ALL TIMES GMT