Interviews
World Bodies: Follow WTO principles for more global financial governance
17 Nov '08
5 min read
In the light of latest developments involving large Government Interventions in banks and bailout packages, free market principles risk to a certain extent being compromised. The signatory parties very much applaud all the efforts undertaken by the World Trade Organization (WTO) members at the last Mini-Ministerial meeting held last July in Geneva. In this sense and in order not to lose the progress already achieved, all stakeholders must continue to work hard so as to reach an ambitious and comprehensive Doha agreement in the coming weeks.
The most important consequence of not achieving this deal is that there can be a tangible risk that countries raise tariffs or protect their economies in any imaginative way again, and eventually following domestic pressure. We may also see that progress in the liberalization of Services trade may also get halted. Moreover, countries will be discouraged to continue with their efforts to autonomously liberalize their economies. Therefore, the 'lock-in' effect of the Doha Round would be crucial to secure the progress in terms of tariffs' reduction achieved so far.
Signatory parties believe that the WTO has proven to be a successful mechanism/tool of global governance. While being fully committed to the principles of free trade, the parties truly consider that a failure of the DDA Round could have pernicious effects on the WTO, opening a debate about the WTO in itself, threatening thus the credibility and life of the multilateral trade system. Furthermore, a failure of the latter will threaten/weaken the other international organizations, thus putting the whole system at risk.
In this sense, voices that currently ask for more global governance in this context of financial crisis/instability should take as an example the WTO and the crucial role it has played during the last 60 years. Indeed, by liberalizing world trade policies, improving market access and promoting a stable, transparent and internationally-accepted system of rules and instruments and a trade-dispute body, this institution has greatly contributed to economic growth, development and employment worldwide, as well as consolidating the multilateral trading system.
The most important consequence of not achieving this deal is that there can be a tangible risk that countries raise tariffs or protect their economies in any imaginative way again, and eventually following domestic pressure. We may also see that progress in the liberalization of Services trade may also get halted. Moreover, countries will be discouraged to continue with their efforts to autonomously liberalize their economies. Therefore, the 'lock-in' effect of the Doha Round would be crucial to secure the progress in terms of tariffs' reduction achieved so far.
Signatory parties believe that the WTO has proven to be a successful mechanism/tool of global governance. While being fully committed to the principles of free trade, the parties truly consider that a failure of the DDA Round could have pernicious effects on the WTO, opening a debate about the WTO in itself, threatening thus the credibility and life of the multilateral trade system. Furthermore, a failure of the latter will threaten/weaken the other international organizations, thus putting the whole system at risk.
In this sense, voices that currently ask for more global governance in this context of financial crisis/instability should take as an example the WTO and the crucial role it has played during the last 60 years. Indeed, by liberalizing world trade policies, improving market access and promoting a stable, transparent and internationally-accepted system of rules and instruments and a trade-dispute body, this institution has greatly contributed to economic growth, development and employment worldwide, as well as consolidating the multilateral trading system.
FICCI
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