There Is No Trade King; Lamy on Why He Wants to Run the 'Medieval' WTO
Byline: Karen Lowry Miller
Pascal Lamy has been at the center of the globalization storm. As European trade commissioner the last five years, he was a key player when riotous protests disrupted the Seattle trade summit in 1999, and when developing nations abandoned the Doha round of talks in Cancun 16 months ago. After the Doha disaster, Lamy blasted the "medieval" ways of the World Trade Organization. Last week he formally announced his candidacy to become director-general of the WTO when Supachai Panitchpakdi of Thailand steps down in September. At the World Economic Forum meeting in Davos, Lamy discussed trade and his candidacy with NEWSWEEK's Karen Lowry Miller. Excerpts:
NEWSWEEK: Why did the Doha Round get so off-track?
First, the mandate is very ambitious. Once you agree on a program of negotiation, you can't add or retreat. And until all is agreed, nothing is agreed. There have to be trade-offs, and as we know from game theory, the number of combinations is formidable. Second, to get to final agreement, you have to structure and frame it on each issue equally. This tactical environment is formidably complex. It sometimes works and sometimes not.
Why did Cancun fail?
Many reasons, but the basic one is that a number of developing countries chose to pull the rug on an issue which was not the major issue probably, but they decided that the time had come to say we can stop an agreement.
Is EU-U.S. leadership at fault? If they agree, will the developing world follow?
No. The U.S. and EU called the shots until the mid-'80s, then there was a quad, with the U.S., EU, Japan and Canada. But the world has changed, and there is a new balance of forces around the table. Now there are two constituencies, the G20 and the G90, who are fighting more clearly the developing countries' corner. This is about both politics and economics.
How did talks revive in Geneva last July?
It probably has a lot to do with failure in Cancun. There was extreme pressure on negotiators. The U.S. and the EU had to bite the bullet on agriculture-export subsidies.
Is this a good sign for the future?
Building on Geneva is perfectly feasible. Whether we'll get the necessary engagement remains to be seen. The crucial thing will be the feeling of ownership that developing countries have of the results. …