Date: 03/09/2009
Source: World Trade Organisation
Title: WTO: Lamy: Speech by the DG of the WTO to the Federation of Indian
Chambers of Commerce and Industry, New Delhi

Thank you for playing host to me today at the start of the last quarter of
2009 which will certainly put the system of global cooperation to the test.

We are living in worrying times. We are witnessing the first truly global
economic crisis ever, its effects spanning all countries, North and South,
rich and poor. We are witnessing pandemics such as the N1H1 virus which
threaten to paralyze our societies. We are witnessing floods and drought and
food scarcity in many parts of our planet. In sum, we are witnessing a host
of global challenges which are testing the capacity of the international
system to address them.

What started as a financial crisis, fuelled by a lack of sufficient
regulation in this field, has turned into the worst economic crisis in
generations and the first global crisis in the history of mankind. A crisis
which threatens to undo the economic development achieved by many countries
and to erode people's faith in an open international trading system.

Rather than being a cause of the crisis, trade has been another casualty,
given the simultaneous reduction in aggregate demand across all major world
economies. WTO economists have foreseen a decline this year of nearly 10 per
cent in volume terms, its worst result since the end of the Second World
War.

The contraction has been made sharper with the drying up of trade finance,
which oils the wheels of international trade. Further, the fall in aggregate
demand has affected global supply chains which, in turn, have magnified the
contraction in trade.

Add to this that some countries have increased tariffs, instituted new
non-tariff measures, and initiated more anti-dumping actions. Some of the
measures that have been introduced to stimulate economies contain provisions
that favour domestic goods and services at the expense of imports. True,
most of these measures are allowed under WTO rules. True, also, that none of
them has triggered so far a tit-for-tat chain retaliation. But there is no
denying the fact that they have had some trade chilling effect.

As you know the WTO has been carefully monitoring trade policy developments.
We have seen an increase in restrictive trade measures since the onset of
the crisis. So there is no room for complacency. While I do not think we are
in a situation where we need to cry wolf, we need to remain vigilant and
ensure that WTO members remain open with one another.

And the economic crisis has rapidly become a global jobs crisis. The
International Labour Organisation tells us that unemployment is rising,
social pain is increasing with the loss of thousands of jobs which had been
created over the past several years, threatening to unwind unprecedented
social progress and development in many poor countries.

The recently published Indian Foreign Trade Policy indicates that nearly 14
million jobs were generated in India directly or indirectly through the
significant increase in trade that this country has seen during the last
five years. Trade has provided an engine for growth and for employment.

And the current crisis is also having an impact on India. The contraction of
demand has had an impact on Indian exports of textiles, garments, gems,
jewellery and leather goods, all of which are labour intensive. The crisis
has also taken a toll on Indian exports of services which represent highly
paid jobs.

It is therefore no surprise that the Foreign Trade Policy lists as a
priority to seek market access for Indian exports, a host of measures to
simplify and facilitate exports as well as measures to enhance the
competitiveness of Indian products in foreign markets.

India is not alone. Countries in this and other regions are also
implementing measures in this direction. And what better way to do this than
in a concerted, multilateral manner in the WTO Doha Development Round?

Whether it is about generating market access for goods and services through
the reduction of obstacles to trade, or levelling the playing field in trade
distorting subsidies, or providing predictability and transparency to trade,
or facilitating trade, the most efficient means to achieve these goals today
remains the multilateral Doha Development Round.

Today and tomorrow a group of WTO Ministers will have the opportunity to map
out how they intend to bring the Doha Round to closure in 2010. The setting
of the meeting in Delhi is propitious to quote an Indian proverb which says
"life is not a continuum of pleasant choices, but of inevitable problems
that call for strength, determination and hard work". I hope these words, to
which I would add the adjective "collective", inspire Ministers so that
Delhi can be the beginning of the endgame of the Doha Round.

But as I said at the beginning of my intervention today, this is not the
only challenge facing the global community today. Improving global financial
governance will be put to the test at the upcoming G20 Leaders' Summit in
Pittsburgh at the end of the month. Whether it is about better regulation of
financial instruments, institutions or markets, improvement of accounting
standards or reform of global financial institutions, these tasks will
require concerted collective action.

Later in the year the FAO will host a World Summit to agree key actions to
tackle food security. Here again the problem is multifaceted and global. We
need to boost investment in agriculture. We need to improve our capacity to
respond to food crises. We also need to ensure that developing countries
have a fair chance of competing in world commodity markets by reducing trade
distorting subsidies, as would be the case with the conclusion of the Doha
Round.

Delivering a deal on climate change is another daunting challenge facing the
international community this year. Mitigating global warming and adapting to
its consequences will require major economic investment and, above all,
unequivocal determination on the part of policy-makers. With a challenge of
this magnitude, multilateral cooperation is crucial, and a successful
conclusion to the ongoing global negotiations on climate change would be the
first step towards achieving sustainable development for future generations.

Here again, go-it-alone measures, even though intelligently crafted, will
not achieve the desired results. Relying on trade measures to fix global
environmental problems will not work. I am of the firm conviction that the
relationship between international trade - and indeed the WTO - and climate
change would be best defined as a follow up to a consensual international
accord on climate change that successfully embraces all major polluters.

In other words, unless and until a truly global consensus emerges on how
best to tackle the issue of climate change, WTO members will continue to
hold different views on what the multilateral trading system can and must do
on this subject. It is only an international consensus that can take them
forward. And this must now be the focus of the environmental negotiators as
they march towards Copenhagen.

It is clear that the global community is facing daunting tasks. But it is
also true that the system of global governance is evolving. We are seeing
the emergence of new world leaders. Not that they are new. Many of them have
a millenary history. But there is a realisation today that global solutions
will require giving these new leaders not only a voice but also a say at the
table.

The G20, as imperfect as it may be, is certainly a much more legitimate
forum than the G8. And it may be that the discussions take longer and that
the views are more divergent, but this is a better reflection of today's
geopolitical realities.

A new triangle of global governance is emerging and I strongly believe that
we need to strengthen it. I have called this a "triangle of coherence".

On one side of the triangle lies the G20, providing global political
leadership and policy direction.

On another side lie member-driven international organisations providing
expertise and specialized inputs whether rules, policies or programmes, such
as the WTO.

The G20 is not a decision-making forum. But it is clear that decision-making
in the respective international organizations will be faster if there is
political impulse emerging from the G20.

The third side of the triangle is the G-192, the United Nations, providing a
universal forum for accountability.

In the longer term, we should have both the G20 and the international
agencies reporting to the "parliament" of the United Nations. This would
constitute a potent mix of leadership, inclusiveness and action to ensure
coherent and effective global governance.

I am often asked if I am "optimistic" or "pessimistic" about the future. I
always reply that I am "activistic". I believe the international community
cannot afford to fail to meet these challenges. World leaders cannot afford
to fail the people who have elected them. With leadership, with courage and
a clear determination to strengthen the multilateral system, there ain't no
mountain high enough.

I thank you for your attention.