February 25, 2009 / 6:37 AM / 10 years ago

WTO urges G20 to uphold pledge to fight protectionism

TOKYO (Reuters) - Leaders of the G20 developed and emerging countries should not backtrack on their agreement last year to fight protectionism when they meet in London in April, the head of the World Trade Organization said on Wednesday.

World Trade Organization (WTO) Director-General Pascal Lamy attends a news conference at the Japan National Press Club in Tokyo February 25, 2009. REUTERS/Michael Caronna

Despite the G20’s decision in November to refrain from raising new trade barriers, there have been several moves suggesting creeping protectionism is under way.

They include the “Buy American” provisions in the U.S. stimulus package, export subsidies for dairy produce resumed by the European Union, and a French package for ailing carmakers.

“Their commitments last November to reject protectionism and push for the Doha round conclusion were useful. We will need at least as much this time,” WTO Director-General Pascal Lamy told a news conference in Tokyo.

The London summit on April 2 follows a November meeting in Washington where Group of 20 leaders vowed to act to help their economies, conclude stalled trade talks, reform international financial institutions and clean up the financial system.

“We know too that the credibility of G20 on trade cannot be separated from decisions they must take in other areas of their agenda, including coordination of stimulus packages and the foundation of a proper regulation of international finance to try and avoid future meltdowns,” Lamy said.

Asked if he will attend the London summit, Lamy, who was not invited to the Washington meeting, told a conference later in the day: “If I am needed there, yes, I will be there.”

In the meantime, he said he was working hard with British Prime Minister Gordon Brown and others to make sure the trade side of the G20 talks would be successful.

Negotiations for a new world trade agreement have foundered partly due to an impasse on agriculture. Developing nations want the industrial world to cut farm supports. The United States says developing nations must remove barriers to farm imports.

On Tuesday, U.S. President Barack Obama called for an end to “direct payments to large agribusinesses that don’t need them.”

Asked whether Obama’s latest remark could be a good sign for concluding the WTO’s Doha round, Lamy said, “Let’s see.”

“For the moment, the U.S. farm legislation, as it results from the latest U.S. 08 farm bill, is probably not compliant with a successful conclusion of this round,” he added, referring to the U.S. 2008 farm bill.


Lamy said he was waiting for Obama’s administration to appoint a new trade negotiation team to find out exactly what Washington will seek via future trade negotiations.

On the possibility and timing of holding the ministerial meeting for the WTO’s long-running Doha round, Lamy said he hoped to bring talks back to the political level as soon as possible.

Lamy also said the discipline induced by WTO rules has, for example, helped soften the U.S. “Buy American” provision, which gave the European Union, Japan and a short list of other trading partners some comfort they could share in the expanded U.S. public works market created by the stimulus bill.

The final version of the “Buy American” measure requires public works funded by the stimulus package to use only U.S.-made goods, including iron and steel. But it also mandates it be done in a manner consistent with U.S. trade pacts.

A report last month by Lamy found “limited evidence” of trade measures such as tariff increases since the financial crisis exploded in September.

Lamy, in Tokyo to meet Japanese government officials, said the Geneva-based organization is currently gathering information for an updated report to be released in March.

French President Nicolas Sarkozy said on Tuesday the European Union should protect its industries in the same way the United States does, a remark that will likely raise concerns about the threat of protectionist pressure.

Asked about Sarkozy’s comment, Lamy said he should not interfere with what he called internal discussions within the EU.

Editing by Jerry Norton and Valerie Lee

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