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bodies. -- 80 lives. Those are the headlines. Time for | :00:07. | :00:17. | |
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HARDtalk is in Geneva at the headquarters of the World Trade | :00:17. | :00:21. | |
Organisation to meet the man who, for the past eight years, has been | :00:21. | :00:27. | |
leading the crusade for global free trade. Pascal Lemy will leave his | :00:27. | :00:32. | |
job later this year frustrated. The so-called Doha round of trade talks | :00:32. | :00:39. | |
is in limbo. Protectionist sentiment is on the rise. Has the | :00:39. | :00:49. | |
:00:49. | :01:04. | ||
march towards trade liberalisation Pascal Lemy, welcome to HARDtalk. | :01:04. | :01:11. | |
You were the man who was hired to deliver the next great leap towards | :01:11. | :01:21. | |
global free trade. You have failed. How frustrated do you feel? What is | :01:21. | :01:28. | |
true is that the negotiation of new global trade routes which we | :01:28. | :01:32. | |
started ten years ago has not yet delivered. That is true. Do you | :01:32. | :01:38. | |
recognise it as failure? You had two terms, eight years. It's a | :01:38. | :01:44. | |
collective failure of the mutual members and of the World Trade | :01:44. | :01:51. | |
Organisation, as an organisation. But it's a negotiation between | :01:51. | :02:01. | |
sovereign nation states, who want all do not want to build the | :02:01. | :02:05. | |
necessary comprises. On a number of items, these compromises have not | :02:05. | :02:11. | |
taken place, which does not mean that nothing can be done for the | :02:11. | :02:17. | |
future. There are a number of elements in the negotiation of a | :02:17. | :02:21. | |
selective nature that can be done. That does not mean in the meantime | :02:21. | :02:27. | |
world trade has not been doing well and especially during this crisis... | :02:27. | :02:32. | |
We will talk about the state of world trade. But if I may stay with | :02:32. | :02:36. | |
the idea that the door of ground, as it has been called, the idea | :02:36. | :02:43. | |
that the rich world and developing world would find a way to have | :02:43. | :02:47. | |
mutually beneficial free trade. It has not happened. Would you accept | :02:47. | :02:53. | |
we are further from that than says six years ago? I would not agree. | :02:53. | :02:59. | |
What is true is that given the importance of American countries, | :02:59. | :03:04. | |
China, Indonesia, finding the sort of balance which was in the system | :03:04. | :03:09. | |
20 years ago between rich countries and poor countries has become much | :03:09. | :03:15. | |
more complex. Your model -- model does not work any more. He's China | :03:15. | :03:24. | |
a rich people with poor people or a poor, tree with which people? -- | :03:24. | :03:34. | |
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country. So far, the WTO members have not been able to factor this | :03:35. | :03:44. | |
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new elements. Which is why Peter Sutherland wrote recently, the Joe | :03:45. | :03:50. | |
Hart agreement has died. He said it's a unique failure in the | :03:50. | :03:55. | |
history of the multinational trade negotiations. -- del agreement. | :03:55. | :04:03. | |
love Peter Sutherland but that is over the top. The negotiations been | :04:03. | :04:06. | |
deadlocked and dead are not the same thing. There are elements of | :04:06. | :04:12. | |
the negotiations that we still need to overcome. But during this time, | :04:12. | :04:18. | |
what we have seen is that developing countries have immensely | :04:18. | :04:23. | |
benefited from open trade, that during the crisis protectionism | :04:23. | :04:29. | |
remains the only dog that did not bark, saying there is a huge value | :04:29. | :04:35. | |
in the world trading system. What remains true is that we could do | :04:35. | :04:44. | |
better on a number of levels - higher tariff peaks, subsidies that | :04:44. | :04:50. | |
lead to overfishing. These issues have not yet been solved. | :04:50. | :04:55. | |
protectionism is the dog that didn't bark, why did you recently | :04:55. | :05:02. | |
described protectionism, quote, like cholesterol slowly clogging up | :05:02. | :05:11. | |
trade flows since 2008? There is a risk that the arteries of world | :05:11. | :05:20. | |
trade are clogged by cholesterol, if this slow, fortunately slow, | :05:20. | :05:30. | |
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move towards a bit more restrictive aspects was to be made. Not only | :05:30. | :05:36. | |
are you the driver of negotiations, another role for the WTO is to | :05:36. | :05:39. | |
oversee international trade disputes. You have more and more | :05:40. | :05:46. | |
trade disputes. Everybody it seems is blaming everyone else for | :05:46. | :05:50. | |
violating the international trade rules. You have the US and EU | :05:50. | :05:55. | |
accusing China of dumping, of illegal subsidies. China is | :05:55. | :05:59. | |
accusing the US and EU of protecting sectors with illegal | :05:59. | :06:06. | |
policies, Brazil is accusing of a currency wall. There is no trust. | :06:06. | :06:16. | |
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No mutual confidence in the system any more. That is the sort of dark | :06:16. | :06:21. | |
medium like presentation. everything I just said is not true? | :06:21. | :06:30. | |
No. What is true is that we have more trade disputes. But having | :06:30. | :06:39. | |
trade disputes and litigation as a substitute for trade wars is very | :06:39. | :06:46. | |
bemused. We have in the WTO a process of education. At the end of | :06:46. | :06:52. | |
the day, we do Termly calmly without a big fuss. -- adjudication. | :06:52. | :07:02. | |
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Who is right and who is wrong. This is a -- also true of other areas in | :07:05. | :07:09. | |
international life. There is a whole heap of passion in the member | :07:10. | :07:14. | |
states of the WTO. We just had the French and Brazilian ministers | :07:14. | :07:18. | |
standing together and condemning what they call the predatory | :07:18. | :07:23. | |
practices in world trade, habitually seen in Asia. The French | :07:23. | :07:27. | |
minister, I am sure you know well, went further and said the picture | :07:27. | :07:34. | |
of world free trade offered by the WTO today it's a disaster. Well, | :07:34. | :07:42. | |
it's a view I am not sure of and it is not the first time I have heard | :07:42. | :07:50. | |
that. He has a vision of globalisation. He basically says, | :07:50. | :07:55. | |
globalisation has been a catastrophe. But he has been | :07:55. | :07:58. | |
appointed French industry minister. There are many ministers in | :07:58. | :08:00. | |
different governments who are essentially are walking very | :08:00. | :08:06. | |
quickly away from the concept of globalisation and liberalised trade | :08:06. | :08:11. | |
in the way that you imagined. don't agree with this qualification, | :08:11. | :08:17. | |
that there are a large number of people who are advocating | :08:17. | :08:24. | |
protectionism and globalisation on this planet. There is a small | :08:24. | :08:29. | |
number of people, of whom are many happen to be in my native country, | :08:29. | :08:38. | |
but that is not the majority. Go to Asia and ask the few hundred | :08:38. | :08:42. | |
million people who have gone out of poverty, thanks to globalisation, | :08:42. | :08:49. | |
whether they are looking for something else. Let's not transform | :08:49. | :08:53. | |
legitimate small minority and big majority debate into the other way | :08:53. | :08:57. | |
around. If I may say, you are renowned for your diplomatic skills | :08:57. | :09:01. | |
and your calmness. What I've read from what you have already said is | :09:01. | :09:06. | |
that perhaps you believe it is time to do some finger-pointing. As you | :09:06. | :09:11. | |
approach the end of your term at the WTO, perhaps it is time for you | :09:11. | :09:17. | |
to move things forward by saying where you believe the blame for to | :09:17. | :09:24. | |
be put for the failures of recent years. -- ought to be put. | :09:24. | :09:30. | |
course the WTO can't start finger- pointing. Why can't you say there | :09:30. | :09:36. | |
are certain people who are not playing the game? The role Hasted | :09:36. | :09:39. | |
rain -- pass to remain neutral, listening to everybody and broker a | :09:39. | :09:48. | |
consensus... We work by consensus, not what is true and I have not | :09:48. | :09:52. | |
shied in saying this in recent years. The main responsibility for | :09:52. | :10:00. | |
this deadlock in trade negotiations, different from the implementation | :10:00. | :10:07. | |
of existing rule, the main responsibility lies in the big | :10:07. | :10:13. | |
areas of world trade. Whether the US, Japan, a few others. Were the | :10:13. | :10:20. | |
emerging China, India and a few others. If the US and China do not | :10:20. | :10:30. | |
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agree in trade routes, like by the way they do not agree about Co2 | :10:35. | :10:41. | |
emissions. There is nothing much we can do. These two elephants so far | :10:41. | :10:48. | |
have not agreed. The rest of the world has not had the force and the | :10:48. | :10:53. | |
power to not -- to knock these two heads together. If you are Japan, | :10:53. | :11:00. | |
Africa can't do that. The WTO then can't do that. You draw an | :11:00. | :11:05. | |
interesting parallel with the post Kyoto protocol afford to find a | :11:05. | :11:10. | |
binding multilateral path to emissions reductions across the | :11:10. | :11:15. | |
world. It hasn't succeeded so far. You haven't succeeded so far. It | :11:15. | :11:20. | |
comes back to the idea that, as you put it, particularly with the US | :11:20. | :11:24. | |
and China at loggerheads, multilateralism as a no approach to | :11:24. | :11:29. | |
the world's biggest problems doesn't work any more. -- as an | :11:30. | :11:35. | |
approach. I would roughly agree with that. What I believe is that | :11:35. | :11:42. | |
more true -- multilateralism, as the right frame of governance, is | :11:42. | :11:48. | |
having a tough time. The question is, is there any other solution to | :11:48. | :11:53. | |
these global problems than global multilateral rules, Endeavour's | :11:53. | :11:57. | |
ordeals? Maybe that is where you should be putting your energies. | :11:57. | :12:02. | |
The big players that you call elephants, the United States, the | :12:02. | :12:07. | |
EU, China, are looking away from the WTO. They are busy signing | :12:07. | :12:12. | |
bilateral trade deals with important partners, which are not | :12:12. | :12:17. | |
overseen by the WTO and do not take place within your Parameters, | :12:17. | :12:26. | |
leaving you looking largely irrelevant. Well, if you look at | :12:26. | :12:33. | |
world trade, 15% of world trade takes place on the preferential, | :12:33. | :12:38. | |
bilateral route. There have been over 400 of these bilateral all | :12:38. | :12:43. | |
regional trade agreements in the last few years. That is correct. | :12:43. | :12:51. | |
But my question to you ease, if you look at 100, what is relevant, 15% | :12:51. | :12:57. | |
or 85%? But you know the United States and the EU over the next | :12:57. | :13:00. | |
year have made it one of their key objectives to signed a bilateral | :13:00. | :13:04. | |
trade deal. That is for the future. That is my point. That is where the | :13:05. | :13:10. | |
future is going. We will see! your message to the EU and the US | :13:10. | :13:13. | |
that they should not, in the interests of international world | :13:13. | :13:21. | |
trade... My message is finally we will see. I was EU trade | :13:21. | :13:26. | |
commissioner. I know that. When I took this position, there was a | :13:27. | :13:35. | |
mandate to negotiate in bilateral free -- a bilateral free-trade | :13:35. | :13:42. | |
agreement. This is still there. What I am saying is that... It's a | :13:42. | :13:49. | |
bit of a paradox that those big elephants, who can't agree in the | :13:49. | :13:54. | |
WTO, could agree elsewhere. Why is it that the powers like the US, | :13:54. | :14:00. | |
like Europe, can't agree in the WTO and could agreed bilaterally? What | :14:00. | :14:06. | |
is the mystery behind this? fact is, we have a world economy | :14:06. | :14:10. | |
which is sick. We have national governments which are wrestling | :14:10. | :14:14. | |
with spikes in unemployment in most parts of the developed world. We | :14:15. | :14:18. | |
have politicians who are under pressure. They are less interested | :14:18. | :14:22. | |
in the language of economic altruism, that using to be talking | :14:22. | :14:26. | |
about, and more interested in protecting jobs and pushing for a | :14:26. | :14:29. | |
trade deals that they think are in their own national interest. | :14:29. | :14:36. | |
this is not about altruism. Opening trade is a win/win again. It is | :14:36. | :14:40. | |
your interest to open trade. that argument does not work if | :14:40. | :14:44. | |
politicians feel they are in a zero sum world where somebody else's | :14:44. | :14:50. | |
game will, like China, is their loss. I don't agree with that. We | :14:50. | :14:59. | |
then buy into the same problems. Art the EU and US, are they going | :14:59. | :15:06. | |
to open and agree on how they run their agricultural systems? Will | :15:06. | :15:11. | |
they agree that agricultural tariffs are going to go to see road | :15:11. | :15:19. | |
between the US and EU? Agree that they will not have any more trading | :15:19. | :15:24. | |
subsidies? I bet they will not. Does that mean this kind of deal | :15:24. | :15:30. | |
will not help? I would not say that. If the EU, US, China, Japan, Korea | :15:30. | :15:35. | |
agreed to reduce tariffs, that is good for everybody. But at the end | :15:35. | :15:39. | |
of the day, the more tariff preference to put in the system, | :15:39. | :15:48. | |
the less preferences there are at the end of the day. The issue is | :15:48. | :15:53. | |
not with old ways to limit trade black tariffs. It is with non- | :15:53. | :15:58. | |
tariff measures, non-tariff barriers, which are the rules there | :15:58. | :16:02. | |
not protect the producer but the consumer. Things like sanitary | :16:02. | :16:09. | |
rules. These sorts of things can't be properly addressed long-term | :16:09. | :16:19. | |
:16:19. | :16:20. | ||
The BA economies led by China, India and Brazil had you put in the | :16:20. | :16:24. | |
In the when it comes to these negotiations they should be | :16:24. | :16:30. | |
regarded as developing nations. The key concession to break the log jam | :16:30. | :16:35. | |
need to come from the older established World missions. This is | :16:35. | :16:42. | |
a fundamental dilemma. Where do you sit on that? Is it home that China | :16:42. | :16:47. | |
was disengaged from the poorer countries of the world orders to | :16:47. | :16:52. | |
China still have the right to be seen as part of the double in world | :16:52. | :17:00. | |
was back, is the crux of this matter. He me a simple answer. The | :17:00. | :17:07. | |
simple answer is look at the terms under which China joined the | :17:07. | :17:12. | |
deeper deeper look in-country and that a | :17:12. | :17:17. | |
huge development chances in job will stop it cannot and does not | :17:17. | :17:26. | |
state it wants to be treated like Senegal or Tanzania. He has to be a | :17:26. | :17:31. | |
point between being a dramatic or poor country or a rich country like | :17:31. | :17:37. | |
the USA. Put it differently, even as a stalemate and a mob JUN, who | :17:37. | :17:43. | |
in your opinion has to move all? The rich world led by the US and | :17:44. | :17:49. | |
that the EU all the Chinese, Indians and Brazilians. Who needs | :17:49. | :17:55. | |
to make them more concessions? depends on depends on raphy. It's a | :17:56. | :18:01. | |
very complex matter. If it was simple we would have been nip | :18:01. | :18:08. | |
centuries. This did pins. China needs to reduce its industrial | :18:08. | :18:17. | |
pirates for the US and Japan. And yes, the US has to reduce its farm | :18:17. | :18:21. | |
subsidies so that they stop damaging the developing countries. | :18:21. | :18:28. | |
That is the trade-off. The question is, how much? This is where, so far, | :18:28. | :18:37. | |
there has not been enough energy. They were close to agreement but. | :18:38. | :18:43. | |
That was the point. We seemed to be closer to closing the deal. I will | :18:43. | :18:48. | |
pull one thing towards you. You didn't it your best shot for over | :18:48. | :18:56. | |
eight years. Your tenure at the World Trade comes to an end. Who | :18:56. | :19:03. | |
will get your job to kick-start process which seems to be stuck. | :19:03. | :19:10. | |
Should it be candidate from the norm rich world? Should it be a | :19:10. | :19:14. | |
candidate from the developing world to bring a different perspective? | :19:14. | :19:19. | |
Has only been one candidate and has not been from the rich nations in | :19:19. | :19:28. | |
the past. Is it time run up a? That's all the members to decide. | :19:28. | :19:33. | |
Overall, the World Trade Organisation needs somebody who has | :19:33. | :19:39. | |
a proper understanding of the technicalities hand a diplomatic | :19:39. | :19:46. | |
capacity and communication capacity and management capacity to give the | :19:46. | :19:49. | |
organisation are reason to be running. We have nine candidates | :19:50. | :19:56. | |
coming in from nine different countries. Eight of them come from | :19:56. | :20:03. | |
developing countries. This is evidence that as an institution, | :20:03. | :20:09. | |
we're open. By Peter good sign that Iraq nine people competing for the | :20:09. | :20:17. | |
position. Eight those come from developing countries. We is into | :20:17. | :20:21. | |
the world -- there were loads who observes these injured hip. When he | :20:21. | :20:27. | |
goes to the WTO he is shocked by a sense of fatigue in disappointment | :20:27. | :20:35. | |
and irrelevance. Those are very harsh words. That is his him - at | :20:35. | :20:42. | |
his personal impression. That is not my view. No later than his | :20:42. | :20:47. | |
meeting, the long meeting which your organisation. They do not feel | :20:47. | :20:53. | |
this way. They feel we are living in tough times. Oh no! That many | :20:53. | :20:58. | |
people on planet today a living in tough times because of the economic | :20:58. | :21:04. | |
crisis. There is nothing like an organisation like this is isolated | :21:04. | :21:10. | |
from the difficulties including the economic and social problems. It's | :21:10. | :21:14. | |
still bylines the WTO members together and it's still binds the | :21:14. | :21:19. | |
stuff together and the belief that opening trade works for developing | :21:19. | :21:27. | |
markets. His basic beliefs as to remain including the tough times | :21:27. | :21:33. | |
like the present situation. It is a passionate statement. I cannot help | :21:33. | :21:38. | |
but think that is not necessarily the bleak Should by many members of | :21:38. | :21:42. | |
your own native government in France. You are leaving the job and | :21:42. | :21:48. | |
you're speaking to front Holland about what you may do next. Pears | :21:48. | :21:56. | |
Frankel him. Is the role for you in France today when you see the | :21:56. | :22:03. | |
Government adopting protectionist measures which you in his interview | :22:03. | :22:13. | |
:22:13. | :22:13. | ||
Sid are completely counter- productive? That they would like | :22:13. | :22:17. | |
protectionism in one case and they have the capacity and the ability | :22:17. | :22:22. | |
for protectionism and that's another thing. Be as is the | :22:22. | :22:26. | |
minister who threatened to nationalise the privately and steel | :22:26. | :22:32. | |
plant by laying off workers. It has a lot to do with protectionism. | :22:32. | :22:41. | |
no, no, it's about whether or not you open up trade. Intellectually, | :22:41. | :22:50. | |
at the end of the day, the French policy is about Europe. It is | :22:50. | :22:58. | |
decided in Brussels by the council and the parliament. I will do you, | :22:59. | :23:05. | |
fundamental belief. There is no chance all the European Union to | :23:06. | :23:11. | |
grow protectionism in the years to come. The simple reason is that | :23:11. | :23:17. | |
they know that 80% of the demand for the European economy comes from | :23:17. | :23:24. | |
outside of Europe. Brief Lee, this is the last time we will speak as | :23:24. | :23:30. | |
you was ahead of the WTO. You will leave in a few months' time. With a | :23:30. | :23:36. | |
real sense of disappointment and the worry about the world economy | :23:36. | :23:44. | |
and her trade will work in the world economy. No, I worry about | :23:44. | :23:54. | |
:23:54. | :23:54. | ||
the world economy. We're not yet out of the crisis. There is a | :23:54. | :24:01. | |
conjuncture at the basic structure. Globalised capitalism needs to | :24:01. | :24:11. | |
:24:11. | :24:12. | ||
change. There is also a part that needs to do with the economic | :24:12. | :24:20. | |
development and I think we need to keep working on these big | :24:20. | :24:23. | |
globalised capitalist systems can be improved in order to provide | :24:23. | :24:31. |