Finishing the Doha Round of global trade talks is the best step global leaders can take to avoid a destructive protectionist backlash from the current economic crisis, trade officials said on Saturday.
By reaching a global trade deal, the world's major economies can demonstrate that their commitment to cooperation and coordination to fight the crisis is more than just an empty promise, the officials said at a session of the World Economic Forum annual meeting.
"It would send the right signal of confidence that people have realized that this is something they need to do together as part of their reaction to the crisis," said WTO Director-General Pascal Lamy.
Pascal Lamy (R) Director-General of the World Trade Organization (WTO) gestures next to Doris Leuthard, Swiss Economy Minister, during a session at the World Economic Forum (WEF) in Davos January 31, 2009. More than 40 heads of state and government -- almost double the number last year -- will be joined at the WEF meeting by 36 finance ministers and central bankers, including the central bank chiefs of all the G8 group of rich countries except the United States. (Xinhua/Reuters Photo)
Lamy added all indications he has received suggest that leaders of the so-called G20 economies are serious about their commitment to the Doha Round.
Swiss Economics Minister Doris Leuthard echoed this assessment, but also cited the extreme political difficulty of seeking further trade liberalization at a time of rising unemployment in the developed world.
"We will be having some very tough discussions in my country about how to support free trade when other countries don't have social protections," she said.
As for the status of the Doha negotiations, Lamy expressed optimism that talks could be concluded quickly if the political will to do so exists.
He estimated that 80 percent of the terms of an agreement have been settled, although highly contentious issues such as agricultural subsidies in the developed world, anti-dumping rules and industrial subsidies still need to be resolved.
The economic crisis, however, may change the calculation of some developing countries regarding the costs and benefits of any proposed deal, warned Mari Pangestu, minister of trade of Indonesia.
While the proposed reforms in agriculture subsidies and peak tariffs are attractive to the developing countries, "other things have to be on the table for there to be sufficient benefits for us," she said. Source: Xinhua