WTO Director-General Pascal Lamy, during a briefing by the International Chamber of Commerce (ICC) on its World Trade Agenda initiative at the WTO on 6 December 2012, said “with the Doha Round as a package at an impasse and political energy for international initiatives at a low ebb, a strong push by business is needed if we are to successfully deter protectionism and infuse trade policy with new energy and vigour.” This is what he said:
It is a pleasure to welcome you here to the WTO.
I would like at the outset to extend my thanks and appreciation to you and your colleagues at the International Chamber of Commerce and Qatar Chamber of Commerce and Industry for your efforts at raising awareness of the WTO through your World Trade Agenda initiative. I want to thank you as well for taking the time to meet today with WTO members and to outline for them your own campaign for a more open multilateral trading system.
The connections between business and the WTO and the GATT go back to the earliest days of the multilateral trading system. The ICC’s participation in the multilateral trading system actually predates the creation of the WTO or even the GATT. The ICC sent a delegation to London in 1946 for the first session of the Preparatory Committee of the ill-starred International TradeOrganization. For decades, you have encouraged and prodded your governments to advance the agenda of trade opening and stronger global trade rules. Representatives from the ICC and other business organizations have attended every WTO Ministerial Conference, every Public Forum and virtually every other WTO meeting since we opened our doors in 1995.
There is no great mystery to this association. For businesses seeking predictability, transparency and stability after decades of war and hostile commercial relations, the establishment of a system dedicated to trade opening under the rubric of internationally agreed rules was highly attractive. For the policymakers who founded the GATT and its successor, the WTO, it was and remains critical to have input from enterprises which are, after all, the parties moving goods and services across borders. To make rules on trade without consulting those engaged in trade would be short sighted and counterproductive. It is businesses which know best where the bottlenecks to commerce lie and often it is businesses that understand best how to pare them back.
But the relationship between us is also complex and has not always been as close as critics of the WTO, business and trade opening sometimes proclaim it to be. Businesses are highly active participants in shaping the trade agenda, but there are other actors as well. Governments, after all, are the ones who decide on the rules governing international trade. Moreover, not all businesses see trade opening in the same light.
The forces unleashed by trade have undoubtedly brought benefit to businesses, but for some companies they have also brought despair. Businesses for which the marketplace is global have the opportunity to reach billions of new consumers and to profit handsomely from it. But for the businesses which cannot match the fierce competition from foreign producers, Joseph Schumpeter’s famous “creative destruction” is no mere academic conjecture but a painful reality.
The emergence of value chains locally, in regions and across continents means greater efficiency for those companies able to access high quality parts and components at more affordable prices than are available domestically. These chains can also aid development by spreading investment and technology into new markets. But for companies outside these chains, the struggle to remain competitive seems more daunting than ever.
Trade is a potent tool in enhancing efficiency, generating wealth and creating jobs. It spreads gains across an economy through lower prices, wider selection of goods and services and through the innovation that arises from greater competition. But we need to acknowledge that not everyone benefits from trade. Trade affects nearly everyone, but not in an equal manner. For those that have been hurt by trade, we need to improve training, counselling and job placement programmes.
We at the WTO have been at the coal face in the debate over trade for 17 years. We have welcomed the support we have received from our supporters like the ICC, but at the same time we cannot turn our backs on the sceptics.
We are an intergovernmental organization that must seek to balance the needs and interests of 157 members and the myriad of constituencies that seek to influence them. Perhaps this is explains in part how business and the WTO drifted apart some years ago.
Many business leaders have been disappointed by the slow pace of WTO negotiations; they have expressed frustration that certain issues of importance to them seem to have dropped off the agenda; they believe that the WTO rule-making is slow in adapting to the changing needs of their businesses.
But the lingering and formidable economic crisis has put all of this into perspective. It has highlighted the fact that the business community and the WTO need each other. The diminished appetite for trade opening, already latent in many countries before the crisis, has threatened to morph into trade restrictive policies. Businesses have seen and appreciated that WTO surveillance of trade policies has had an important deterrent effect on government imposed trade restrictions. Global businesses recognize that in an era of global production and supply, no regional or bilateral deal can level the playing field like a global accord, and no regional entity has the same capacity to keep markets open. This is not to say that the protectionist threat has receded entirely, nor that growth has not been hampered by the accumulated impact of measures applied over the past four years. But I think we all realize that absent an active WTO at the core of world trade, the situation could have been much worse.
The launch this year of the ICC’s World Trade Agenda and the efforts of Jean-Guy and his colleagues at the G-20, OECD and other fora are much appreciated here. We at the WTO know well that unless there is a strong constituency for further trade opening and stronger trade rules we cannot succeed in modernizing our trading system.
So we too have undertaken efforts to build bridges to business. We hosted the ICC here in March when they launched the World Trade Agenda. I have spoken regularly to their board and together with many members of the Secretariat we have reached out to the ICC, other businesses groups and individual companies around the world. We launched last month a survey of businesses in more than 100 countries – inviting them to give us their views on how we can provide them with better service. We will be releasing the results very soon. Look for new business-tailored information pages to appear on our website very soon. I have also convened a Panel of Experts to define the future of world trade with a strong business presence, including the honorary chairman of the ICC Victor Fung.
With the Doha Round as a package at an impasse and political energy for international initiatives at a low ebb, a strong push by business is needed if we are to successfully deter protectionism and infuse trade policy with new energy and vigour. So, we welcome the ICC once again to the WTO and offer our encouragement and support for the World Trade Agenda initiative.