Brussels, 04/06/2008 (Agence Europe) - When he was in the European Parliament (EP) to address the international trade committee last Friday (see EUROPE 9672), Pascal Lamy, the head of the World Trade Organisation (WTO) gave an exclusive interview to the EP press services. He was asked about how the WTO might react to the surge in food prices, climate change and the depletion of natural resources.
Rising food prices. On this point, Lamy, a former European trade commissioner, said: “What the WTO may do is to be useful in getting a better fit between demand - which is stronger than before, especially grain consumption - and supply, especially the ability of some countries, notably developing countries, to increase production. The gap between the two is trade”. “But it is obviously necessary that rich countries understand that the subsidies they pay damage the production system in some Third World countries. They must accept additional discipline. This has been evident for a long time: this crisis puts it on the agenda at an important time in our negotiations,” he pointed out.
Relationship between trade, climate change and depletion of resources. When asked about how the WTO might contribute to a more balanced sharing of increasingly scarce resources, Lamy said: “The first way to do that is 'a bit more trade rather than a bit less'. If the Egyptians had to produce all the cereals they eat, which today is very expensive, there wouldn't be a drop of water in the Nile! So, trade, from time to time, is a way to use natural resources, where they are most readily available”. He went on: “In addition, there are lots of things we can do with tariffs - encouraging environmentally friendly goods through customs duties, further opening the environmental services market. There are plenty of Third World countries which now have the capacity to do that”. Speaking about post-Kyoto, he said that “we can go with an agreement that one day perhaps, I hope, will return to post-Kyoto and issues of climate change. These are not being negotiated at the WTO... But it is clear that the day there is an agreement that will succeed Kyoto - and it will surely be broader and probably more demanding than Kyoto - we will have to adjust. As it is, roughly, the same countries that negotiate the rules on climate change and trade rules, a priori that should not be major difficulties”.
For Lamy, an increase in trade did not necessarily mean increased pressure on natural resources. “We must be wary of evidence and look at all the calculations,” he argued, stating that, “There are cases where the price of energy is not at a good level from the viewpoint of climate change, where trade has a bad impact on climate change. And there are plenty of other cases where trade has a positive impact”. (O.L.)