Doha talks could defrost, Lamy says

Pascal Lamy may have to hand off the completion of the Doha round of global trade talks to his successor.

Though he expects there could be breakthroughs by the end of the year, Lamy ends his second four-year term as the World Trade Organization's director-general in August.

The long-running Doha round of trade negotiations began in 2001, and Lamy officially declared an impasse in the talks in December 2011.

"I'm a bit more optimistic than I was one or two years ago. My sense is that we may be on the verge of a defreezing of the negotiations," said Lamy in an interview with China Daily.

Members will have a ministerial conference at the end of this year in Bali, Indonesia, and "a part of these big negotiations could be concluded", he said.

Ongoing talks include trade facilitation negotiations and other parallel discussions. Member countries have agreed to accelerate talks on a tentative agreement to be signed in Bali.

Instead of ensuring a big abundant basket of outcomes, negotiators will first harvest the low-hanging fruit, he said.

Thriving regional talks

Frustrated by stagnant multilateral talks, countries have become increasingly interested in regional trade negotiations.

The choice of multilateral and bilateral systems is not "either-or", said Lamy, as they can co-exist. Every WTO member participates in more than 10 preferential agreements on average, he said.

Trade is more open today than in 2001, when the Doha talks were launched, and it is more open than in 2008, when the talks were halted, but what happened could be reversed without binding commitments under the WTO, he said.

Recently a few mega-deals have been in the limelight. In June the United States and the European Union will begin official talks on the Transatlantic Trade and Investment Partnership, with hopes of hammering out a deal by the end of 2014.

"But starting a negotiation doesn't mean the ending of a negotiation," Lamy said.

There are many negotiations that never conclude, said Lamy.

"It all depends on the level of ambition," he said. "But if the purpose is to free the old trade, to address all the regulatory differences, which really matters to open trade ... then it will take more than two years."

Most of the trade today is about regulations, product safety, data privacy and environmental standards, which are all complex issues, he said.

In this case, what matters is regulatory differences and technical standards issues, said Lamy.

Analysts said that possible mega-pacts between the US and the EU will give them a chance to establish international standards and place pressure on emerging and developing economies.

How future mega-deals affect world trade will depend on the convergence of standards, he said.

"Countries like China also have a big stake in standardization. China could be more proactive in promoting a multilateral system of standards. It would be more beneficial to China," Lamy said.

But it will take some time for China to build the capacity, he added.

China's strength

Trade has been a long-term driver of China's economic growth, and entry into the WTO 11 years ago has greatly changed the country's economy.

But to remain a winner in trade these days, countries need to adopt a modern concept of trade, namely, what to add to your economy through participation in international trade. Adding value has become a necessity, Lamy pointed out.

"Of course there are winners and losers, but more competition is good for consumers. This is efficient, but not painless," he said.

He said the Western economy is "slightly better" but another five years of slow growth is very possible.

Nine candidates from across the world are in the running to replace Lamy as the next director-general.

There is also speculation that Lamy will enter French politics after he steps down.

"I'm keeping my options open," Lamy said.

Fu Jing contributed to this story.

lanlan@chinadaily.com.cn