:00:07. > :00:17.bodies. -- 80 lives. Those are the headlines. Time for
:00:17. > :00:17.
:00:17. > :00:21.HARDtalk is in Geneva at the headquarters of the World Trade
:00:21. > :00:27.Organisation to meet the man who, for the past eight years, has been
:00:27. > :00:32.leading the crusade for global free trade. Pascal Lemy will leave his
:00:32. > :00:39.job later this year frustrated. The so-called Doha round of trade talks
:00:39. > :00:49.is in limbo. Protectionist sentiment is on the rise. Has the
:00:49. > :01:04.
:01:04. > :01:11.march towards trade liberalisation Pascal Lemy, welcome to HARDtalk.
:01:11. > :01:21.You were the man who was hired to deliver the next great leap towards
:01:21. > :01:28.global free trade. You have failed. How frustrated do you feel? What is
:01:28. > :01:32.true is that the negotiation of new global trade routes which we
:01:32. > :01:38.started ten years ago has not yet delivered. That is true. Do you
:01:38. > :01:44.recognise it as failure? You had two terms, eight years. It's a
:01:44. > :01:51.collective failure of the mutual members and of the World Trade
:01:51. > :02:01.Organisation, as an organisation. But it's a negotiation between
:02:01. > :02:05.sovereign nation states, who want all do not want to build the
:02:05. > :02:11.necessary comprises. On a number of items, these compromises have not
:02:11. > :02:17.taken place, which does not mean that nothing can be done for the
:02:17. > :02:21.future. There are a number of elements in the negotiation of a
:02:21. > :02:27.selective nature that can be done. That does not mean in the meantime
:02:27. > :02:32.world trade has not been doing well and especially during this crisis...
:02:32. > :02:36.We will talk about the state of world trade. But if I may stay with
:02:36. > :02:43.the idea that the door of ground, as it has been called, the idea
:02:43. > :02:47.that the rich world and developing world would find a way to have
:02:47. > :02:53.mutually beneficial free trade. It has not happened. Would you accept
:02:53. > :02:59.we are further from that than says six years ago? I would not agree.
:02:59. > :03:04.What is true is that given the importance of American countries,
:03:04. > :03:09.China, Indonesia, finding the sort of balance which was in the system
:03:09. > :03:15.20 years ago between rich countries and poor countries has become much
:03:15. > :03:24.more complex. Your model -- model does not work any more. He's China
:03:24. > :03:34.a rich people with poor people or a poor, tree with which people? --
:03:34. > :03:34.
:03:35. > :03:44.country. So far, the WTO members have not been able to factor this
:03:45. > :03:45.
:03:45. > :03:50.new elements. Which is why Peter Sutherland wrote recently, the Joe
:03:50. > :03:55.Hart agreement has died. He said it's a unique failure in the
:03:55. > :04:03.history of the multinational trade negotiations. -- del agreement.
:04:03. > :04:06.love Peter Sutherland but that is over the top. The negotiations been
:04:06. > :04:12.deadlocked and dead are not the same thing. There are elements of
:04:12. > :04:18.the negotiations that we still need to overcome. But during this time,
:04:18. > :04:23.what we have seen is that developing countries have immensely
:04:23. > :04:29.benefited from open trade, that during the crisis protectionism
:04:29. > :04:35.remains the only dog that did not bark, saying there is a huge value
:04:35. > :04:44.in the world trading system. What remains true is that we could do
:04:44. > :04:50.better on a number of levels - higher tariff peaks, subsidies that
:04:50. > :04:55.lead to overfishing. These issues have not yet been solved.
:04:55. > :05:02.protectionism is the dog that didn't bark, why did you recently
:05:02. > :05:11.described protectionism, quote, like cholesterol slowly clogging up
:05:11. > :05:20.trade flows since 2008? There is a risk that the arteries of world
:05:20. > :05:30.trade are clogged by cholesterol, if this slow, fortunately slow,
:05:30. > :05:30.
:05:30. > :05:36.move towards a bit more restrictive aspects was to be made. Not only
:05:36. > :05:39.are you the driver of negotiations, another role for the WTO is to
:05:40. > :05:46.oversee international trade disputes. You have more and more
:05:46. > :05:50.trade disputes. Everybody it seems is blaming everyone else for
:05:50. > :05:55.violating the international trade rules. You have the US and EU
:05:55. > :05:59.accusing China of dumping, of illegal subsidies. China is
:05:59. > :06:06.accusing the US and EU of protecting sectors with illegal
:06:06. > :06:16.policies, Brazil is accusing of a currency wall. There is no trust.
:06:16. > :06:16.
:06:16. > :06:21.No mutual confidence in the system any more. That is the sort of dark
:06:21. > :06:30.medium like presentation. everything I just said is not true?
:06:30. > :06:39.No. What is true is that we have more trade disputes. But having
:06:39. > :06:46.trade disputes and litigation as a substitute for trade wars is very
:06:46. > :06:52.bemused. We have in the WTO a process of education. At the end of
:06:52. > :07:02.the day, we do Termly calmly without a big fuss. -- adjudication.
:07:02. > :07:05.
:07:05. > :07:09.Who is right and who is wrong. This is a -- also true of other areas in
:07:10. > :07:14.international life. There is a whole heap of passion in the member
:07:14. > :07:18.states of the WTO. We just had the French and Brazilian ministers
:07:18. > :07:23.standing together and condemning what they call the predatory
:07:23. > :07:27.practices in world trade, habitually seen in Asia. The French
:07:27. > :07:34.minister, I am sure you know well, went further and said the picture
:07:34. > :07:42.of world free trade offered by the WTO today it's a disaster. Well,
:07:42. > :07:50.it's a view I am not sure of and it is not the first time I have heard
:07:50. > :07:55.that. He has a vision of globalisation. He basically says,
:07:55. > :07:58.globalisation has been a catastrophe. But he has been
:07:58. > :08:00.appointed French industry minister. There are many ministers in
:08:00. > :08:06.different governments who are essentially are walking very
:08:06. > :08:11.quickly away from the concept of globalisation and liberalised trade
:08:11. > :08:17.in the way that you imagined. don't agree with this qualification,
:08:17. > :08:24.that there are a large number of people who are advocating
:08:24. > :08:29.protectionism and globalisation on this planet. There is a small
:08:29. > :08:38.number of people, of whom are many happen to be in my native country,
:08:38. > :08:42.but that is not the majority. Go to Asia and ask the few hundred
:08:42. > :08:49.million people who have gone out of poverty, thanks to globalisation,
:08:49. > :08:53.whether they are looking for something else. Let's not transform
:08:53. > :08:57.legitimate small minority and big majority debate into the other way
:08:57. > :09:01.around. If I may say, you are renowned for your diplomatic skills
:09:01. > :09:06.and your calmness. What I've read from what you have already said is
:09:06. > :09:11.that perhaps you believe it is time to do some finger-pointing. As you
:09:11. > :09:17.approach the end of your term at the WTO, perhaps it is time for you
:09:17. > :09:24.to move things forward by saying where you believe the blame for to
:09:24. > :09:30.be put for the failures of recent years. -- ought to be put.
:09:30. > :09:36.course the WTO can't start finger- pointing. Why can't you say there
:09:36. > :09:39.are certain people who are not playing the game? The role Hasted
:09:39. > :09:48.rain -- pass to remain neutral, listening to everybody and broker a
:09:48. > :09:52.consensus... We work by consensus, not what is true and I have not
:09:52. > :10:00.shied in saying this in recent years. The main responsibility for
:10:00. > :10:07.this deadlock in trade negotiations, different from the implementation
:10:07. > :10:13.of existing rule, the main responsibility lies in the big
:10:13. > :10:20.areas of world trade. Whether the US, Japan, a few others. Were the
:10:20. > :10:30.emerging China, India and a few others. If the US and China do not
:10:30. > :10:35.
:10:35. > :10:41.agree in trade routes, like by the way they do not agree about Co2
:10:41. > :10:48.emissions. There is nothing much we can do. These two elephants so far
:10:48. > :10:53.have not agreed. The rest of the world has not had the force and the
:10:53. > :11:00.power to not -- to knock these two heads together. If you are Japan,
:11:00. > :11:05.Africa can't do that. The WTO then can't do that. You draw an
:11:05. > :11:10.interesting parallel with the post Kyoto protocol afford to find a
:11:10. > :11:15.binding multilateral path to emissions reductions across the
:11:15. > :11:20.world. It hasn't succeeded so far. You haven't succeeded so far. It
:11:20. > :11:24.comes back to the idea that, as you put it, particularly with the US
:11:24. > :11:29.and China at loggerheads, multilateralism as a no approach to
:11:30. > :11:35.the world's biggest problems doesn't work any more. -- as an
:11:35. > :11:42.approach. I would roughly agree with that. What I believe is that
:11:42. > :11:48.more true -- multilateralism, as the right frame of governance, is
:11:48. > :11:53.having a tough time. The question is, is there any other solution to
:11:53. > :11:57.these global problems than global multilateral rules, Endeavour's
:11:57. > :12:02.ordeals? Maybe that is where you should be putting your energies.
:12:02. > :12:07.The big players that you call elephants, the United States, the
:12:07. > :12:12.EU, China, are looking away from the WTO. They are busy signing
:12:12. > :12:17.bilateral trade deals with important partners, which are not
:12:17. > :12:26.overseen by the WTO and do not take place within your Parameters,
:12:26. > :12:33.leaving you looking largely irrelevant. Well, if you look at
:12:33. > :12:38.world trade, 15% of world trade takes place on the preferential,
:12:38. > :12:43.bilateral route. There have been over 400 of these bilateral all
:12:43. > :12:51.regional trade agreements in the last few years. That is correct.
:12:51. > :12:57.But my question to you ease, if you look at 100, what is relevant, 15%
:12:57. > :13:00.or 85%? But you know the United States and the EU over the next
:13:00. > :13:04.year have made it one of their key objectives to signed a bilateral
:13:05. > :13:10.trade deal. That is for the future. That is my point. That is where the
:13:10. > :13:13.future is going. We will see! your message to the EU and the US
:13:13. > :13:21.that they should not, in the interests of international world
:13:21. > :13:26.trade... My message is finally we will see. I was EU trade
:13:27. > :13:35.commissioner. I know that. When I took this position, there was a
:13:35. > :13:42.mandate to negotiate in bilateral free -- a bilateral free-trade
:13:42. > :13:49.agreement. This is still there. What I am saying is that... It's a
:13:49. > :13:54.bit of a paradox that those big elephants, who can't agree in the
:13:54. > :14:00.WTO, could agree elsewhere. Why is it that the powers like the US,
:14:00. > :14:06.like Europe, can't agree in the WTO and could agreed bilaterally? What
:14:06. > :14:10.is the mystery behind this? fact is, we have a world economy
:14:10. > :14:14.which is sick. We have national governments which are wrestling
:14:15. > :14:18.with spikes in unemployment in most parts of the developed world. We
:14:18. > :14:22.have politicians who are under pressure. They are less interested
:14:22. > :14:26.in the language of economic altruism, that using to be talking
:14:26. > :14:29.about, and more interested in protecting jobs and pushing for a
:14:29. > :14:36.trade deals that they think are in their own national interest.
:14:36. > :14:40.this is not about altruism. Opening trade is a win/win again. It is
:14:40. > :14:44.your interest to open trade. that argument does not work if
:14:44. > :14:50.politicians feel they are in a zero sum world where somebody else's
:14:50. > :14:59.game will, like China, is their loss. I don't agree with that. We
:14:59. > :15:06.then buy into the same problems. Art the EU and US, are they going
:15:06. > :15:11.to open and agree on how they run their agricultural systems? Will
:15:11. > :15:19.they agree that agricultural tariffs are going to go to see road
:15:19. > :15:24.between the US and EU? Agree that they will not have any more trading
:15:24. > :15:30.subsidies? I bet they will not. Does that mean this kind of deal
:15:30. > :15:35.will not help? I would not say that. If the EU, US, China, Japan, Korea
:15:35. > :15:39.agreed to reduce tariffs, that is good for everybody. But at the end
:15:39. > :15:48.of the day, the more tariff preference to put in the system,
:15:48. > :15:53.the less preferences there are at the end of the day. The issue is
:15:53. > :15:58.not with old ways to limit trade black tariffs. It is with non-
:15:58. > :16:02.tariff measures, non-tariff barriers, which are the rules there
:16:02. > :16:09.not protect the producer but the consumer. Things like sanitary
:16:09. > :16:19.rules. These sorts of things can't be properly addressed long-term
:16:19. > :16:20.
:16:20. > :16:24.The BA economies led by China, India and Brazil had you put in the
:16:24. > :16:30.In the when it comes to these negotiations they should be
:16:30. > :16:35.regarded as developing nations. The key concession to break the log jam
:16:35. > :16:42.need to come from the older established World missions. This is
:16:42. > :16:47.a fundamental dilemma. Where do you sit on that? Is it home that China
:16:47. > :16:52.was disengaged from the poorer countries of the world orders to
:16:52. > :17:00.China still have the right to be seen as part of the double in world
:17:00. > :17:07.was back, is the crux of this matter. He me a simple answer. The
:17:07. > :17:12.simple answer is look at the terms under which China joined the
:17:12. > :17:17.deeper deeper look in-country and that a
:17:17. > :17:26.huge development chances in job will stop it cannot and does not
:17:26. > :17:31.state it wants to be treated like Senegal or Tanzania. He has to be a
:17:31. > :17:37.point between being a dramatic or poor country or a rich country like
:17:37. > :17:43.the USA. Put it differently, even as a stalemate and a mob JUN, who
:17:44. > :17:49.in your opinion has to move all? The rich world led by the US and
:17:49. > :17:55.that the EU all the Chinese, Indians and Brazilians. Who needs
:17:56. > :18:01.to make them more concessions? depends on depends on raphy. It's a
:18:01. > :18:08.very complex matter. If it was simple we would have been nip
:18:08. > :18:17.centuries. This did pins. China needs to reduce its industrial
:18:17. > :18:21.pirates for the US and Japan. And yes, the US has to reduce its farm
:18:21. > :18:28.subsidies so that they stop damaging the developing countries.
:18:28. > :18:37.That is the trade-off. The question is, how much? This is where, so far,
:18:38. > :18:43.there has not been enough energy. They were close to agreement but.
:18:43. > :18:48.That was the point. We seemed to be closer to closing the deal. I will
:18:48. > :18:56.pull one thing towards you. You didn't it your best shot for over
:18:56. > :19:03.eight years. Your tenure at the World Trade comes to an end. Who
:19:03. > :19:10.will get your job to kick-start process which seems to be stuck.
:19:10. > :19:14.Should it be candidate from the norm rich world? Should it be a
:19:14. > :19:19.candidate from the developing world to bring a different perspective?
:19:19. > :19:28.Has only been one candidate and has not been from the rich nations in
:19:28. > :19:33.the past. Is it time run up a? That's all the members to decide.
:19:33. > :19:39.Overall, the World Trade Organisation needs somebody who has
:19:39. > :19:46.a proper understanding of the technicalities hand a diplomatic
:19:46. > :19:49.capacity and communication capacity and management capacity to give the
:19:50. > :19:56.organisation are reason to be running. We have nine candidates
:19:56. > :20:03.coming in from nine different countries. Eight of them come from
:20:03. > :20:09.developing countries. This is evidence that as an institution,
:20:09. > :20:17.we're open. By Peter good sign that Iraq nine people competing for the
:20:17. > :20:21.position. Eight those come from developing countries. We is into
:20:21. > :20:27.the world -- there were loads who observes these injured hip. When he
:20:27. > :20:35.goes to the WTO he is shocked by a sense of fatigue in disappointment
:20:35. > :20:42.and irrelevance. Those are very harsh words. That is his him - at
:20:42. > :20:47.his personal impression. That is not my view. No later than his
:20:47. > :20:53.meeting, the long meeting which your organisation. They do not feel
:20:53. > :20:58.this way. They feel we are living in tough times. Oh no! That many
:20:58. > :21:04.people on planet today a living in tough times because of the economic
:21:04. > :21:10.crisis. There is nothing like an organisation like this is isolated
:21:10. > :21:14.from the difficulties including the economic and social problems. It's
:21:14. > :21:19.still bylines the WTO members together and it's still binds the
:21:19. > :21:27.stuff together and the belief that opening trade works for developing
:21:27. > :21:33.markets. His basic beliefs as to remain including the tough times
:21:33. > :21:38.like the present situation. It is a passionate statement. I cannot help
:21:38. > :21:42.but think that is not necessarily the bleak Should by many members of
:21:42. > :21:48.your own native government in France. You are leaving the job and
:21:48. > :21:56.you're speaking to front Holland about what you may do next. Pears
:21:56. > :22:03.Frankel him. Is the role for you in France today when you see the
:22:03. > :22:13.Government adopting protectionist measures which you in his interview
:22:13. > :22:13.
:22:13. > :22:17.Sid are completely counter- productive? That they would like
:22:17. > :22:22.protectionism in one case and they have the capacity and the ability
:22:22. > :22:26.for protectionism and that's another thing. Be as is the
:22:26. > :22:32.minister who threatened to nationalise the privately and steel
:22:32. > :22:41.plant by laying off workers. It has a lot to do with protectionism.
:22:41. > :22:50.no, no, it's about whether or not you open up trade. Intellectually,
:22:50. > :22:58.at the end of the day, the French policy is about Europe. It is
:22:59. > :23:05.decided in Brussels by the council and the parliament. I will do you,
:23:06. > :23:11.fundamental belief. There is no chance all the European Union to
:23:11. > :23:17.grow protectionism in the years to come. The simple reason is that
:23:17. > :23:24.they know that 80% of the demand for the European economy comes from
:23:24. > :23:30.outside of Europe. Brief Lee, this is the last time we will speak as
:23:30. > :23:36.you was ahead of the WTO. You will leave in a few months' time. With a
:23:36. > :23:44.real sense of disappointment and the worry about the world economy
:23:44. > :23:54.and her trade will work in the world economy. No, I worry about
:23:54. > :23:54.
:23:54. > :24:01.the world economy. We're not yet out of the crisis. There is a
:24:01. > :24:11.conjuncture at the basic structure. Globalised capitalism needs to
:24:11. > :24:12.
:24:12. > :24:20.change. There is also a part that needs to do with the economic
:24:20. > :24:23.development and I think we need to keep working on these big
:24:23. > :24:31.globalised capitalist systems can be improved in order to provide