Pascal Lamy, director-general, World Trade Organization, spoke to NDTV's Namrata Brar on the sidelines of the World Economic Forum at Davos, Switzerland about the Doha round of negotiations, which aims to lower trade barriers around the world to facilitate global trade.
Here's the edited transcript of the interview:
NDTV: My first question here in Davos 2013 - is Doha dead?
PASCAL LAMY: I don't think so. Doha is a big negotiation for WTO (World Trade Organization) and will not conclude any time soon...the way it was planned to conclude, which is a big deal. About 20 topics being principal that nothing is agreed until everything is agreed. But for sure, Doha is not dead, because problems which Doha was to address are still there...big tariff in industrial growth like subsidies, fishery subsidiaries...the problems are there so we need solutions to that, and second because if the thing doesn't unfold, bits and pieces of that, some of which are very important, can be concluded in the meantime, starting with this big multilateral negotiation which may be on the verge of conclusion of what we call trade facilitation, which is addressing path of fiscal trade and border crossing. Border crossing today cost 10 per cent of the value of trade. There is a big pond of savings for small businesses and could be doable. So the big thing not now but parts of that...yes, perfectly doable.
NDTV: So when you talk about trade facilitation agreement, do you have India on board for this subject because there is a lot of criticism that for a country like India. This will actually benefit imports but not exports, which really developed countries want and it is going to play in favour of the US, EU. So how do you address that?
PASCAL LAMY: First, the largest and growing part of world trade is between developing countries and if all countries on this plant simplify and streamline their custom procedures, this will work both ways, both for imports and for exports. Many developing countries have important offensive interest their competiveness, in services, is now very good. So it's not the question of North versus South or developed versus developing. The world today has changed and we have quite a lot of emerging companies, India, China, and Indonesia being some few examples, whose systematic interest is to improve trade of both the sides. Now, there may be tactical position and that's understandable, but overall it is in the interest of everybody to streamline, simplify, automated custom procedures.
NDTV: In your conversation with the Indian government you have they suggested to open to this agreement?
PASCAL LAMY: I think if you look at India's custom system, in many ways it is more modern than many others including developed countries. So India has an advantage in IT, in digitization of custom procedure, which India needs to export well. (Will be) Discussing this with Anand Sharma and with the Indian PM few days from now.
NDTV: I know you are visiting India in the next couple of days. Do you feel Indian government is on board with Doha once again?
PASCAL LAMY: I don't think India ever left the table. The main reason why, so far, this negotiation has not been concluded is because of industrial tariff reduction. We know countries like India have this part to play and would not characterize the situation. India, having left the table, recently got a proposal that provided number of flexibility for financing public which the Indian government buys from their livelihood of farming and India has a big interest in this sector; roles have been adjusted in order to match this capacity. So this notion that India is on the defensive, I think, is not right. India, like us, like China, like Japan, has offensive and defensive, and the whole thing is how you balance it at the end of the day.
NDTV: But a lot of people say India just got completely exhausted with their discussion, particularly US' position on farm subsidiaries. That's a given. Nobody is still willing to come in and compromise on that front. The US and the EU - do you see a possibility of them compromising on farm subsidiaries?
PASCAL LAMY: Of course, they will have to do that, not only for budget reasons; we all know US has a big budget problem and the EU has to put order in its public finance. So I think they will have to do that. The question is, like always, in terms of negotiation, the US President wants to get the majority in Congress reducing their problems; the US President has to come with something as a tradeoff to tell people in Congress that, yes, we have to do that and it's going to be painful for some of you, but I have good news for others. This is the whole negotiation now; trade facilitation, custom procedures is as compared to this ...... which mobilise domestic ..... is relatively an easy thing. I mean after all the procedures to handle, custom clearing is something of an administrative nature; its governances decided whether you make it complex or simple or cheap or expensive. It is, in a way, an easier issue to deal with, which is why it needs a better start.
NDTV: So is that going to be a new tone of WTO from now on? Will you focus on this specific agreement because what has happened is the principle that 'nothing is agreed till everything is agreed' is really difficult to come back on the table; It is really difficult and then again you have a backdrop; countries like US, you spoke about President Obama, he is clearly not that interested in a global trade issue; he is more focused on his domestic economy; countries have turned more protectionist after the crisis.
PASCAL LAMY: I would be cautious about this. We have been protectionist for sure. So far, we haven't had any significant wave of protectionism, which, by the way, show important... WTO is for keeping trade open on this planet, true and this is absolutely right; governance - that is everywhere - have a tendency to focus on their domestic issues while there is an economic and social crisis. But we all know, more export is very important for many countries and it is one of the cheap ways of stimulating your economy.
NDTV: I am referring to trans-specific partnership that is taking place. The US starts it off with the meeting with Australia, Canada, Chile, Mexico and so on, and then you have talks about EU-US free trade zone coming in. Does that fail the Doha talks, the WTO significance?
PASCAL LAMY: Depends on what you are talking about. In some areas, these bilateral deals may be conducive to more multilateral trade opening; in other areas it may scatter the market instead of leveling it. Take India, which has its own stream of bilateral negotiations. So overall, the question of whether bilateral negotiations are good or bad for multilateral trade opening doesn't have a black and white answer. And of course, the mood is that this bilateral (deal) has to remain complacent with other structures of multilateral groups.
NDTV: What are you going to be asking the Indian government and the Prime Minister when you are in India? What is the top thing that Pascal Lamy wants from India?
PASCAL LAMY: The WTO director general is not there to want things from countries. The WTO is a system between countries, and countries want things from other countries; not me. I am a facilitator; I am trying to take a look at what the current situation is.
NDTV: In your negotiation with India so far, what has been the biggest dumpling block so far for the larger deal?
PASCAL LAMY: I think overall India is modernizing this economy and is using international trades to level. Look at services in distribution or banking and insurances, where India recently has stepped in to say we need more open system, and this is great. (I) am here not to request India from doing things that India won't do; (I) am here to facilitate what Indian authorities believe they have to do in order to modernise their economy and service plays a big factor, as we know how important service is for the performances of the productivity of an economy today.
NDTV: Could there be a possibility of opening up environmentally beneficial goods on your visit?
PASCAL LAMY: Well that's an area which has been discussed, especially in the Pacific countries. I don't see this as something that can be solved in a week; there are more efforts to be put in for it to work.
NDTV: Is there also a meeting planned with President Barack Obama at some stage?
PASCAL LAMY: You know I am always travelling, trying to coil this contact on top of what we have to do every day to keep trade open, which again, in this difficult environment with Europe, Japan still being ...... in terms of growth, which, of course, impact India or China.
NDTV: You are retiring this year in August and you will be missed; the opposition has been a big one. Do you want to leave Doha behind like this?
PASCAL LAMY: I think, we need, especially poor countries, a vibrant and strong WTO in India. We have a WTO stronger than ever it used to be, but on this area, obviously, even if a small step is taken, which will lead to other small steps, I will be very happy.
NDTV: And who is going to succeed you? Since there is long list of potential candidates coming from the countries, which are emerging markets, do you feel, this time, the WTO should have more of an emerging market flavor at the top?
PASCAL LAMY: That's not for me to say. I mean there are nine candidates to succeed me, which I think is a reasonably good open competition. I am happy that we have a big number of good candidates. That says something about how important this organization is for its member. Well, I am not involved in this process. Members will decide and am sure, in their wisdom, they will pick up the best.
NDTV: But the emerging market dialogue in WTO has got stronger in your tenure, do you feel that?
PASCAL LAMY: Of course it has, not because the WTO as a system has affection of the countries that make it, and clearly, emerging and developing countries are more important since they are a part of the world economy. After all, this is what development is all about.
NDTV: Sir may be, we have an emerging market face. Any plans of what you are going to do after August?
PASCAL LAMY: Not yet. For the first time in my life, I will have freedom and I want to taste it.
