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Cutting trade red tape could boost global economy by $1tn, says WTO Cutting trade red tape could boost global economy by $1tn, says WTO
(35 minutes later)
A deal to cut the red tape that clogs up international trade will provide a $1tn (£634bn) boost to the global economy if it can be agreed by the end of the year, the director general of the World Trade Organisation has said.A deal to cut the red tape that clogs up international trade will provide a $1tn (£634bn) boost to the global economy if it can be agreed by the end of the year, the director general of the World Trade Organisation has said.
Speaking in Davos on Friday, Pascal Lamy said there was a good chance that the most important part of the stalled Doha trade negotiations would be resolved when trade ministers met in Bali in December.Speaking in Davos on Friday, Pascal Lamy said there was a good chance that the most important part of the stalled Doha trade negotiations would be resolved when trade ministers met in Bali in December.
Lamy said there was no chance of an immediate conclusion to the whole round, a complex set of negotiations that includes 20 separate aspects of trade, including manufacturing tariffs, agriculture, services and the rules governing the import and export of goods and services. Talks have been underway since late 2001 and despite hopes that the re-election of Barack Obama as US president would smooth the way to a comprehensive deal, Lamy was downbeat about the prospects. Lamy said there was no chance of an immediate conclusion to the whole round, a complex set of negotiations that includes 20 separate aspects of trade, including manufacturing tariffs, agriculture, services and the rules governing the import and export of goods and services. Talks have been under way since late 2001 and, despite hopes that the re-election of Barack Obama as US president would smooth the way to a comprehensive deal, Lamy was downbeat about the prospects.
"There will be no agreement on Doha by the end of this year. We have known that for some time," he said."There will be no agreement on Doha by the end of this year. We have known that for some time," he said.
"What will happen is that a number of bits of the agenda will be concluded selectively, one by one, starting with trade facilitation. Removing barriers to trade will deliver half to two thirds of the benefits of the round. World trade is worth $22tn and the cost of moving trade is $2tn. Cutting red tape in half could stimulate the world economy by $1tn.""What will happen is that a number of bits of the agenda will be concluded selectively, one by one, starting with trade facilitation. Removing barriers to trade will deliver half to two thirds of the benefits of the round. World trade is worth $22tn and the cost of moving trade is $2tn. Cutting red tape in half could stimulate the world economy by $1tn."
Lamy expressed concerns that attempts by countries to manipulate their currencies could hinder trade and foster protectionism.Lamy expressed concerns that attempts by countries to manipulate their currencies could hinder trade and foster protectionism.
"I understand why the IMF is watching currency developments. If we were to go to a situation where currency policies switched to a 'beggar my neighbour' approach that would be a problem. There is a bit of that in the system. The Swiss have been manipulating their currency for the past two years.""I understand why the IMF is watching currency developments. If we were to go to a situation where currency policies switched to a 'beggar my neighbour' approach that would be a problem. There is a bit of that in the system. The Swiss have been manipulating their currency for the past two years."
In 2011 Switzerland took steps to insulate itself from the eurozone debt crisis, when its currency became a safe haven, by intervening to prevent the currency being worth more than €0.83 – equivalent to SFr1.20 to the euro.In 2011 Switzerland took steps to insulate itself from the eurozone debt crisis, when its currency became a safe haven, by intervening to prevent the currency being worth more than €0.83 – equivalent to SFr1.20 to the euro.
Lamy also warned that it would take time for the European Union and the US to strike their own transAtlantic free-trade deal, seen by some politicians, including David Cameron, as an alternative to a full-blown Doha agreement. Lamy also warned that it would take time for the European Union and the US to strike their own transatlantic free-trade deal, seen by some politicians, including David Cameron, as an alternative to a full-blown Doha agreement.
"It won't be easy. There are two handicaps: agriculture and regulatory discrepancies. Agriculture is a can of worms because both the EU and the US support agriculture in a big way but not in the same way. The US depends less on tariffs and more on subsidies. The EU depends more on tariffs and less on subsidies. Agriculture is a formidably noisy constituency.""It won't be easy. There are two handicaps: agriculture and regulatory discrepancies. Agriculture is a can of worms because both the EU and the US support agriculture in a big way but not in the same way. The US depends less on tariffs and more on subsidies. The EU depends more on tariffs and less on subsidies. Agriculture is a formidably noisy constituency."
Lamy said harmonising the two regulatory regimes would boost transAtlantic trade, "but it will take time because there are a myriad of bottlenecks". Lamy said harmonising the two regulatory regimes would boost transatlantic trade, "but it will take time because there are a myriad of bottlenecks".