* Currency tensions pose risk to trade, Lamy says
* Some countries see Doha deal in 2011
(Substitutes fresh Lamy comment, adds Doha round, byline)
By Jonathan Lynn
GENEVA, Oct 19 The head of the World Trade
Organization stepped into an escalating row over currency
policies on Tuesday, saying growing disputes about exchange
rates could threaten global trade and economic recovery.
WTO Director-General Pascal Lamy said governments had
largely resisted resorting to conventional trade measures such
as higher tariffs to protect jobs in the wake of the crisis.
Disorderly currency movements could damage stability in the
trading system, especially if they were seen to be the pursuit
of comparative advantage through exchange rates, he said.
"In other words, the hard-won path towards stability and
trade-led recovery could be put in serious jeopardy by
uncooperative currency behaviour," Lamy told a meeting of the
WTO's 153 members.
"I believe history will judge us harshly if our collective
efforts towards exiting the economic crisis were to be
frustrated by short-sighted individual rent-seeking."
Take a Look on currency tensions [nLDE69308R]
"Currencies: Race to the bottom" r.reuters.com/gez77p
Reshaping financial regulation r.reuters.com/zys68p
Lamy has in the past refused to get involved in discussions
about currencies, arguing that such matters are primarily the
responsibility of the International Monetary Fund -- a view he
repeated on Tuesday -- but the comments indicate his concern.
Currency tensions are likely to dominate next month's summit
of the G20 developed and emerging economies in Seoul.
The United States and European Union are calling on China to
let its yuan appreciate, China has condemned lax monetary policy
in the United States for distorting the global economy, Japan
and Switzerland have been selling their currencies to ward off
deflation and emerging economies from Thailand to Brazil are
seeking to block inflationary capital inflows.
WTO rules do include an article that requires members not to
circumvent trade agreements through exchange rate policy, but
this measure has never been tested in a WTO dispute.
Lamy declined to comment on the bill passed by the U.S.
House of Representatives that would allow the U.S. government to
treat China's undervalued currency as a subsidy and impose
countervailing duties in response.
WINDOW OF OPPORTUNITY
Lamy also told WTO members he hoped leaders at the G20 would
send a clear political signal that they were ready to enter the
end-game of the Doha round.
The Doha round was launched in 2001 to free up global
commerce and help poor countries prosper through trade, and the
poorest developing countries are keen to secure its benefits.
But it has been virtually deadlocked since an abortive
meeting of ministers in July 2008, largely over differences
between the United States and big emerging economies such as
China, India and Brazil over the extent each should open up.
Lamy said a series of meetings of small groups of
ambassadors in Geneva in recent weeks to brainstorm the issues
had got trading powers engaged again and identified the main
gaps. But they had been less successful in establishing where
governments could be flexible and make trade-offs.
Ambassadors will hold another round of small-group talks and
then WTO members will assess after the Seoul summit what the
next steps should be.
Delegates at the meeting expressed broad support for the
approach, as long as all members were kept informed, and several
countries including Japan, Mexico and South Korea said 2011 now
offered a window of opportunity finally to conclude the talks.
Differences persist over domestic farm subsidies in rich
nations, a safeguard allowing poor countries to raise tariffs to
withstand a destabilising flow of food imports, and calls for
duty-free zones in some industrial sectors.
But many negotiators believe it now simply requires a
political push from U.S. President Barack Obama, Chinese Premier
Wen Jiabao and other leaders.
"What we need is for Mr Obama and Mr Wen to look each other
in the eye and say 'Let's get this done!'. If they do, we can do
it," said one diplomat from an industrialised country.
(Editing by Stephanie Nebehay and Kevin Liffey)