John Allen
31 January 2007
interview
Cape Town — The next six months will be crucial for the efforts of Africa and the rest of the developing world to secure easier access to markets for their products in the industrialized world. After the round of international trade negotiations which began in Doha, Qatar, in 2001 (the "Doha Round"), stalled last July, it was announced in Davos, Switzerland, last week that talks will be resuscitated.
But negotiators are working against the clock, notably because United States President George W. Bush's authority to negotiate without haggling with the U.S. Congress over every detail of an agreement expires at the end of June. They also face substantial challenges: both developed and developing countries are under pressure to eliminate or reduce measures, such as government subsidies to domestic producers, or tariffs on imports, which protect their farmers and manufacturers from foreign competition.
In the midst of the ferment created by the announcement that talks are on again, the Director-General of the WTO, Pascal Lamy, will visit East Africa beginning on Thursday. He spoke by telephone from Geneva to allAfrica.com ahead of his journey. Excerpts:
What's the objective of your trip to East Africa?
It's one of the many trips I have made and will make in Africa, and the purpose is to keep governments, leaders, parliaments, whichever interlocutors I can reach out to - this time in Kenya, Uganda and Tanzania - about the (Doha) Round: its purpose for Africa, the state of the Round, the next steps, and interacting with trade constituencies, whether pushing or resisting. You've got pushing and resisting constituencies in the north, the east, the south and the west, in China, the U.S., Europe and Africa.
And of course it happens that these three countries (Kenya, Uganda and Tanzania), individually and together have a rather well-strategized trade policy (through the East African Community). The articulation between regional integration and the multilateral system is something which is very important for them, and I want to help them in fixing the right balance.
After the last WTO general council meeting, you talked about regional trade agreements creating a "hazy" situation. Do you have a sense in which the operations of the East African Community are not consonant with the principles which the WTO would like to see? Are you going to put them under some pressure on that?
No, I make a distinction between bilateral agreements on the one side (and) regional integration processes like Mercosur (the Southern Common Market), like the Andean community, like the East African Community. On this I have said repeatedly that preference must be given to the multilateral trading system (over bilateral agreements), not least because in these North-South, or big-small bilateral trade agreements, the game is more unfair than around the WTO table. On the other side, regional integration processes are in my view positive contributions because they create regionally more homogenous, larger, economic zones, which are more favourable to development, foreign direct investment, and a better circulation of people, goods, and capital.
You were quoted a few days ago as saying with the resuscitation of the Doha Round that "the landing zone is in sight." But can one say that the developing world and the developed world are even flying in the same aircraft? There's no suggestion yet that the developed world is going to offer concessions of any substance.
The WTO is a place where we have to have everybody on board. There's no way the WTO negotiation plane can land with only part of the passengers. It won't land because the decision to land is taken by consensus, and two-thirds of WTO members are developing countries. It's not only the number. If you compare it to what it was 10 or 15 years ago, developing countries now have much more weight around the table, not least because potential elephants of the time - like India, Brazil, China, South Africa - have now become real elephants in trade. So there's no way the Round can be concluded without developing countries on board.
Now of course "developing country" is less of a homogenous category than it used to be 20 years ago. China and Senegal and Brazil and Ethiopia probably are not exactly in the same boxing category. But the truth remains that this Round has to conclude in terms that offer a clear, unambiguous, and agreed rebalancing of the trade rules of the system in favour of developing countries. Which means that developed countries, the U.S, the EU, Japan, to take these three, have to bite the bullet on things like agricultural subsidies and agricultural tariffs. The signals we got in Davos last week, both from the big leaders who were there and from the negotiators, was that they were now switching to more of an 'approach-the-landing-zone mode' than circling above the airport, which is what they've been doing for the last six months.
Does that mean that you've heard any hints, any suggestion of actual figures from developed countries which would lead you to have a level of optimism?
It's too soon for me to go into figures publicly, but what's happening is that the EU and U.S. are working discreetly, not least to test what this means for their constituencies in terms of tons of beef, wheat, sugar, pork or whatever. Brazil-EU, Brazil-U.S., India-EU, India-U.S. are working and once the big numbers start to appear between these four - they will not decide for the others, but they have a combination of offensive and defensives, notably on agriculture, which is fairly representative of the rest of the membership. The U.S. has an offensive on tariffs, a defensive on subsidies, Brazil has an offensive on both tariffs and subsidies, India has an offensive on subsidies and a defensive on tariffs, and the EU and Japan have a defensive both on tariffs and subsidies. So the game around the table is fairly representative of the various groupings of interests, whether it's G-20, G-33, G-10, the EU, or the U.S.
On agriculture, we have between these four most of what needs to be approximated in terms of numbers. They are not yet there, and obviously it will take a bit more time in terms of months for them to get there, and once they get there we have to make sure that the rest of the membership feels comfortable with these numbers. But it has started to happen for the last month, in levels of activity between negotiators, which is there, although it remains discreet at this stage. I think what we got in Davos from the various ministers who were there, including African ministers, Asian ministers, a majority of developing countries' ministers there, is that they understand this process as being necessary.
But you haven't a big window of opportunity. The French elections in April, the expiry of President Bush's freedom to act at the end of June - do those not make it difficult for a resolution before April, and almost impossible beyond June? Does that mean May and June are the key months?
I don't want to give deadlines or timelines, but the U.S. trade permission authority is obviously key, and the good news is that the U.S. President will be asking for [an extension of his trade permission authority] this week, and that's an important element in the progress of the negotiation, because you cannot negotiate with a country that does not have the authority to negotiate. So this is crucial.
As far as the French elections are concerned, this is an internal EU problem. Trade policy in the EU is decided by a qualified majority. It is not unanimity among the 27 member states. The founding fathers in the 50s were wise enough to decide at that time, given that they started as a customs union, that this sort of decision was removed from the veto constraint. But that's a problem for (EU Trade Commissioner Peter) Mandelson. You negotiate as a bloc. It's for him to get his necessary majority, as it is for Sue Schwab (U.S. Trade Representative Susan C. Schwab) to get her necessary majority in Congress.
On the side of the developing countries, you were with African Union representatives in Addis Ababa last week. What was the message you were getting from them?
The message they gave me in Addis Ababa was: we want this round, we know what's in there potentially for Africa, we know we can get a lot, and at a modest, and sometimes extremely modest price, not least because most African countries are Least Developed Countries (LDCs) who will not have to pay (to access developed markets).
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