Pascal Lamy - Director General, World Trade Organisation HARDtalk

bodies. -- 80 lives. Those are the headlines. Time for

HARDtalk is in Geneva at the headquarters of the World Trade

Organisation to meet the man who, for the past eight years, has been

leading the crusade for global free trade. Pascal Lemy will leave his

job later this year frustrated. The so-called Doha round of trade talks

is in limbo. Protectionist sentiment is on the rise. Has the

march towards trade liberalisation Pascal Lemy, welcome to HARDtalk.

You were the man who was hired to deliver the next great leap towards

global free trade. You have failed. How frustrated do you feel? What is

true is that the negotiation of new global trade routes which we

started ten years ago has not yet delivered. That is true. Do you

recognise it as failure? You had two terms, eight years. It's a

collective failure of the mutual members and of the World Trade

Organisation, as an organisation. But it's a negotiation between

sovereign nation states, who want all do not want to build the

necessary comprises. On a number of items, these compromises have not

taken place, which does not mean that nothing can be done for the

future. There are a number of elements in the negotiation of a

selective nature that can be done. That does not mean in the meantime

world trade has not been doing well and especially during this crisis...

We will talk about the state of world trade. But if I may stay with

the idea that the door of ground, as it has been called, the idea

that the rich world and developing world would find a way to have

mutually beneficial free trade. It has not happened. Would you accept

we are further from that than says six years ago? I would not agree.

What is true is that given the importance of American countries,

China, Indonesia, finding the sort of balance which was in the system

20 years ago between rich countries and poor countries has become much

more complex. Your model -- model does not work any more. He's China

a rich people with poor people or a poor, tree with which people? --

country. So far, the WTO members have not been able to factor this

new elements. Which is why Peter Sutherland wrote recently, the Joe

Hart agreement has died. He said it's a unique failure in the

history of the multinational trade negotiations. -- del agreement.

love Peter Sutherland but that is over the top. The negotiations been

deadlocked and dead are not the same thing. There are elements of

the negotiations that we still need to overcome. But during this time,

what we have seen is that developing countries have immensely

benefited from open trade, that during the crisis protectionism

remains the only dog that did not bark, saying there is a huge value

in the world trading system. What remains true is that we could do

better on a number of levels - higher tariff peaks, subsidies that

lead to overfishing. These issues have not yet been solved.

protectionism is the dog that didn't bark, why did you recently

described protectionism, quote, like cholesterol slowly clogging up

trade flows since 2008? There is a risk that the arteries of world

trade are clogged by cholesterol, if this slow, fortunately slow,

move towards a bit more restrictive aspects was to be made. Not only

are you the driver of negotiations, another role for the WTO is to

oversee international trade disputes. You have more and more

trade disputes. Everybody it seems is blaming everyone else for

violating the international trade rules. You have the US and EU

accusing China of dumping, of illegal subsidies. China is

accusing the US and EU of protecting sectors with illegal

policies, Brazil is accusing of a currency wall. There is no trust.

No mutual confidence in the system any more. That is the sort of dark

medium like presentation. everything I just said is not true?

No. What is true is that we have more trade disputes. But having

trade disputes and litigation as a substitute for trade wars is very

bemused. We have in the WTO a process of education. At the end of

the day, we do Termly calmly without a big fuss. -- adjudication.

Who is right and who is wrong. This is a -- also true of other areas in

international life. There is a whole heap of passion in the member

states of the WTO. We just had the French and Brazilian ministers

standing together and condemning what they call the predatory

practices in world trade, habitually seen in Asia. The French

minister, I am sure you know well, went further and said the picture

of world free trade offered by the WTO today it's a disaster. Well,

it's a view I am not sure of and it is not the first time I have heard

that. He has a vision of globalisation. He basically says,

globalisation has been a catastrophe. But he has been

appointed French industry minister. There are many ministers in

different governments who are essentially are walking very

quickly away from the concept of globalisation and liberalised trade

in the way that you imagined. don't agree with this qualification,

that there are a large number of people who are advocating

protectionism and globalisation on this planet. There is a small

number of people, of whom are many happen to be in my native country,

but that is not the majority. Go to Asia and ask the few hundred

million people who have gone out of poverty, thanks to globalisation,

whether they are looking for something else. Let's not transform

legitimate small minority and big majority debate into the other way

around. If I may say, you are renowned for your diplomatic skills

and your calmness. What I've read from what you have already said is

that perhaps you believe it is time to do some finger-pointing. As you

approach the end of your term at the WTO, perhaps it is time for you

to move things forward by saying where you believe the blame for to

be put for the failures of recent years. -- ought to be put.

course the WTO can't start finger- pointing. Why can't you say there

are certain people who are not playing the game? The role Hasted

rain -- pass to remain neutral, listening to everybody and broker a

consensus... We work by consensus, not what is true and I have not

shied in saying this in recent years. The main responsibility for

this deadlock in trade negotiations, different from the implementation

of existing rule, the main responsibility lies in the big

areas of world trade. Whether the US, Japan, a few others. Were the

emerging China, India and a few others. If the US and China do not

agree in trade routes, like by the way they do not agree about Co2

emissions. There is nothing much we can do. These two elephants so far

have not agreed. The rest of the world has not had the force and the

power to not -- to knock these two heads together. If you are Japan,

Africa can't do that. The WTO then can't do that. You draw an

interesting parallel with the post Kyoto protocol afford to find a

binding multilateral path to emissions reductions across the

world. It hasn't succeeded so far. You haven't succeeded so far. It

comes back to the idea that, as you put it, particularly with the US

and China at loggerheads, multilateralism as a no approach to

the world's biggest problems doesn't work any more. -- as an

approach. I would roughly agree with that. What I believe is that

more true -- multilateralism, as the right frame of governance, is

having a tough time. The question is, is there any other solution to

these global problems than global multilateral rules, Endeavour's

ordeals? Maybe that is where you should be putting your energies.

The big players that you call elephants, the United States, the

EU, China, are looking away from the WTO. They are busy signing

bilateral trade deals with important partners, which are not

overseen by the WTO and do not take place within your Parameters,

leaving you looking largely irrelevant. Well, if you look at

world trade, 15% of world trade takes place on the preferential,

bilateral route. There have been over 400 of these bilateral all

regional trade agreements in the last few years. That is correct.

But my question to you ease, if you look at 100, what is relevant, 15%

or 85%? But you know the United States and the EU over the next

year have made it one of their key objectives to signed a bilateral

trade deal. That is for the future. That is my point. That is where the

future is going. We will see! your message to the EU and the US

that they should not, in the interests of international world

trade... My message is finally we will see. I was EU trade

commissioner. I know that. When I took this position, there was a

mandate to negotiate in bilateral free -- a bilateral free-trade

agreement. This is still there. What I am saying is that... It's a

bit of a paradox that those big elephants, who can't agree in the

WTO, could agree elsewhere. Why is it that the powers like the US,

like Europe, can't agree in the WTO and could agreed bilaterally? What

is the mystery behind this? fact is, we have a world economy

which is sick. We have national governments which are wrestling

with spikes in unemployment in most parts of the developed world. We

have politicians who are under pressure. They are less interested

in the language of economic altruism, that using to be talking

about, and more interested in protecting jobs and pushing for a

trade deals that they think are in their own national interest.

this is not about altruism. Opening trade is a win/win again. It is

your interest to open trade. that argument does not work if

politicians feel they are in a zero sum world where somebody else's

game will, like China, is their loss. I don't agree with that. We

then buy into the same problems. Art the EU and US, are they going

to open and agree on how they run their agricultural systems? Will

they agree that agricultural tariffs are going to go to see road

between the US and EU? Agree that they will not have any more trading

subsidies? I bet they will not. Does that mean this kind of deal

will not help? I would not say that. If the EU, US, China, Japan, Korea

agreed to reduce tariffs, that is good for everybody. But at the end

of the day, the more tariff preference to put in the system,

the less preferences there are at the end of the day. The issue is

not with old ways to limit trade black tariffs. It is with non-

tariff measures, non-tariff barriers, which are the rules there

not protect the producer but the consumer. Things like sanitary

rules. These sorts of things can't be properly addressed long-term

The BA economies led by China, India and Brazil had you put in the

In the when it comes to these negotiations they should be

regarded as developing nations. The key concession to break the log jam

need to come from the older established World missions. This is

a fundamental dilemma. Where do you sit on that? Is it home that China

was disengaged from the poorer countries of the world orders to

China still have the right to be seen as part of the double in world

was back, is the crux of this matter. He me a simple answer. The

simple answer is look at the terms under which China joined the

deeper deeper look in-country and that a

huge development chances in job will stop it cannot and does not

state it wants to be treated like Senegal or Tanzania. He has to be a

point between being a dramatic or poor country or a rich country like

the USA. Put it differently, even as a stalemate and a mob JUN, who

in your opinion has to move all? The rich world led by the US and

that the EU all the Chinese, Indians and Brazilians. Who needs

to make them more concessions? depends on depends on raphy. It's a

very complex matter. If it was simple we would have been nip

centuries. This did pins. China needs to reduce its industrial

pirates for the US and Japan. And yes, the US has to reduce its farm

subsidies so that they stop damaging the developing countries.

That is the trade-off. The question is, how much? This is where, so far,

there has not been enough energy. They were close to agreement but.

That was the point. We seemed to be closer to closing the deal. I will

pull one thing towards you. You didn't it your best shot for over

eight years. Your tenure at the World Trade comes to an end. Who

will get your job to kick-start process which seems to be stuck.

Should it be candidate from the norm rich world? Should it be a

candidate from the developing world to bring a different perspective?

Has only been one candidate and has not been from the rich nations in

the past. Is it time run up a? That's all the members to decide.

Overall, the World Trade Organisation needs somebody who has

a proper understanding of the technicalities hand a diplomatic

capacity and communication capacity and management capacity to give the

organisation are reason to be running. We have nine candidates

coming in from nine different countries. Eight of them come from

developing countries. This is evidence that as an institution,

we're open. By Peter good sign that Iraq nine people competing for the

position. Eight those come from developing countries. We is into

the world -- there were loads who observes these injured hip. When he

goes to the WTO he is shocked by a sense of fatigue in disappointment

and irrelevance. Those are very harsh words. That is his him - at

his personal impression. That is not my view. No later than his

meeting, the long meeting which your organisation. They do not feel

this way. They feel we are living in tough times. Oh no! That many

people on planet today a living in tough times because of the economic

crisis. There is nothing like an organisation like this is isolated

from the difficulties including the economic and social problems. It's

still bylines the WTO members together and it's still binds the

stuff together and the belief that opening trade works for developing

markets. His basic beliefs as to remain including the tough times

like the present situation. It is a passionate statement. I cannot help

but think that is not necessarily the bleak Should by many members of

your own native government in France. You are leaving the job and

you're speaking to front Holland about what you may do next. Pears

Frankel him. Is the role for you in France today when you see the

Government adopting protectionist measures which you in his interview

Sid are completely counter- productive? That they would like

protectionism in one case and they have the capacity and the ability

for protectionism and that's another thing. Be as is the

minister who threatened to nationalise the privately and steel

plant by laying off workers. It has a lot to do with protectionism.

no, no, it's about whether or not you open up trade. Intellectually,

at the end of the day, the French policy is about Europe. It is

decided in Brussels by the council and the parliament. I will do you,

fundamental belief. There is no chance all the European Union to

grow protectionism in the years to come. The simple reason is that

they know that 80% of the demand for the European economy comes from

outside of Europe. Brief Lee, this is the last time we will speak as

you was ahead of the WTO. You will leave in a few months' time. With a

real sense of disappointment and the worry about the world economy

and her trade will work in the world economy. No, I worry about

the world economy. We're not yet out of the crisis. There is a

conjuncture at the basic structure. Globalised capitalism needs to

change. There is also a part that needs to do with the economic

development and I think we need to keep working on these big

globalised capitalist systems can be improved in order to provide