Copyright 2005 The Financial Times Limited
Financial Times (London, England)

May 4, 2005 Wednesday
London Edition 1

SECTION: INTERNATIONAL ECONOMY; Pg. 9

LENGTH: 627 words

HEADLINE: The two rivals put their cases

BYLINE: By RAPHAEL MINDER

DATELINE: PARIS

BODY:


The 148 members of the World Trade Organisation are expected to select a new director general this month. In separate interviews with the FT, the two candidates, Pascal Lamy and Carlos Perez del Castillo, answered key questions:

If the next WTO ministerial meeting in Hong Kong in December fails, will this end the idea of trade liberalisation through multilateral rounds like Doha?

Pascal Lamy: Hong Kong should move us two-thirds or three-quarters of the way. Now if Hong Kong is a failure, it will no doubt postpone the end of the round. But before deciding whether that would be a disaster, let us also remember that the previous round lasted eight years and it had a smaller number of countries involved. ... At the end of the Uruguay Round, the conventional wisdom was that we should have no more rounds and that the future was for sectoral negotiations . . . but finally we went back to the idea of a round. My own sense is that you can only have successful negotiations if you can present negotiations as a win-win for all the partners. In that respect, dealing with negotiations sectorally is much more difficult. Carlos Perez del Castillo: I think it would be a disaster for multilateralism if we failed in that round and this is why I feel that at the end of the day wisdom will prevail. The alternative . . . is a very complicated and dangerous scenario in which I can see not only a proliferation of regional and bilateral agreements of all sorts, which would further erode the non-discriminatory principle, but I also see conflicts arising between regions and protectionism. What could you bring as director-general to the Doha Round?

Pascal Lamy: I think a new DG can bring the prospect that his personal credit can be used by the organisation in circumstances where they need a facilitator, broker and diagnostics provider who can help them go further. It is basically a question of personal credit, experience and capacity to mobilise the right actors at the right time.

What I got from the conversations I had in Geneva is also that the secretariat could be more user-friendly. That is not part of the core of the negotiations, but one of the facilitating factors which create an atmosphere around the negotiations which is more conducive to success. The DG is not a magician but he has an ambience-creating role that is important. Carlos Perez del Castillo: I think that what the WTO needs now above all is someone who knows the WTO from inside. In the last four years, I have served the interests of all members by chairing the top bodies of the WTO.

I have a developing country background . . . andI have been really involved in a lot of development issues. Could the WTO dispute settlement mechanism cope with the Boeing-Airbus dispute?

Lamy: The dispute settlement mechanism is at the disposal of member states and they are free to decide to use it. My sense is that, in the medium and long term, there is a risk of a discrepancy between the legislative activity and the judiciary activity of the WTO.

The judicial system of the WTO . . . works remarkably well, but I don't think it should be overloaded. Carlos Perez del Castillo: I hope that the dispute can be solved outside the framework of the WTO, and I think there are good reasons why both parties have been weighing whether to do so.

The moment it goes into the WTO, it is not going to be just a dispute between the two and it may also spill over into the (global) negotiations. On the other hand, the WTO system has been built to cope with this kind of dispute.

So would it have a disastrous effect on the negotiations? I don't think so but it will increase the conflicts among two major trading partners that we need to be on a common wavelength. Full transcript www.ft.com/ wtointerview

LOAD-DATE: May 3, 2005