efforts, we were unable to conclude the modalities in agriculture in the WTO, but the intensive process of discussion resulted in a richer understanding and a better appreciation of the sensitivities of various members/groups of members.” Mr. Nath further added that on many specific issues that seemed intractable in the past, considerable progress has been made and members must now build on that progress.

The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9% in volume terms in 2009, the biggest such contraction since the Second World War, WTO economists forecast today (25 March 2009). “Trade can be a potent tool in lifting the world from these economic doldrums. In London G20 leaders will have a unique opportunity to unite in moving from pledges to action and refrain from any further protectionist measure which will render global recovery efforts less effective,” said Director-General Pascal Lamy.
The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9% in volume terms in 2009, the biggest such contraction since the Second World War, WTO economists forecast today. The contraction in developed countries will be particularly severe with exports falling by 10% this year. In developing countries, which are far more dependent on trade for growth, exports will shrink by some 2%-3% in 2009, WTO economists say.
Economic contraction in most of the industrial world and steep export declines already posted in the early months of this year by most major economies — particularly those in Asia — makes for an unusually bleak 2009 trade assessment, said the WTO in its annual assessment of global trade. Signs of the sharp deterioration in trade were evident in the latter part of 2008 as demand sagged and production slowed. Although world trade grew by 2% in volume terms for the whole of 2008 it tapered off in the last six months and was well down on the 6% volume increase posted in 2007.
“For the last 30 years trade has been an ever increasing part of economic activity, with trade growth often outpacing gains in output. Production for many products is sourced around the world so there is a multiplier effect — as demand falls sharply overall, trade will fall even further. The depleted pool of funds available for trade finance has contributed to the significant decline in trade flows, in particular in developing countries,” said Director-General Pascal Lamy.
“As a consequence, many thousands of trade related jobs are being lost. Governments must avoid making this bad situation worse by reverting to protectionist measures which in reality protect no nation and threaten the loss of more jobs. We are carefully monitoring trade policy developments. The use of protectionist measures is on the rise. The risk is increasing of such measures choking off trade as an engine of recovery. We must be vigilant because we know that restricting imports only leads your trade partner to follow suit and hit your exports. Trade can be a potent tool in lifting the world from these economic doldrums. In London G20 leaders will have a unique opportunity to unite in moving from pledges to action and refrain from any further protectionist measure which will render global recovery efforts less effective,” Mr. Lamy said.

Financial Crisis Sparks Downturn
Following the dramatic worsening of the financial crisis since September of last year, real global output growth slowed to 1.7%, compared to 3.5% in 2007, and is likely to fall by between 1% and 2% in 2009. This is the first decline in total world production since the 1930s, and its impact is magnified in trade. But WTO economists warn that the extraordinary turbulence of world markets in recent months and the continued uncertainty about the near-term trajectory of the global economy makes gauging the preliminary 2008 trade estimates and 2009 projections unusually difficult.
A notable aspect of the current slowdown in world trade is its synchronized nature. Monthly exports and imports of major developed and developing economies have been falling in unison since September 2008. With the growing share of developing countries' trade in the global total, and increased geographical diversification of these flows, it was assumed by some commentators that a “decoupling” effect would have made developing countries less vulnerable to economic turmoil in developed countries. This has not turned out to be the case.
The WTO's preliminary estimate of 2% growth in world trade volume for 2008 is substantially lower than the forecast of 4.5% growth issued a year ago. However, last year's outlook did identify significant downside risks related to developments in financial markets. A large part of the explanation for the over-estimation was the unexpected and very sharp drop in global production in the fourth quarter of 2008.

Trade prospects for 2009
In projecting trade growth for 2009, we assume a normal pattern for a recession, where trade falls, remains weak for a time and then resumes its upward trajectory and begins to return to its previous trend. If this basic scenario holds, world merchandise trade is likely to fall some 9% in volume terms in 2009 (i.e, where price changes have been removed from the calculation), with developed economy exports falling by some
10% on average and developing country exports shrinking by 2—3%.
Trade prospects for 2009 are heavily conditioned by the financial crisis that began almost two years ago in the United States. The crisis intensified dramatically following the collapse of the Wall Street investment bank Lehman Brothers in September of last year, and the government-led rescue of a number of financial institutions in the United States and elsewhere. Turmoil in the financial sector and acute credit shortages spread inexorably to the real sector. Declining asset prices, faltering demand and falling production translated into dramatically reduced and in some cases negative production and trade growth in many countries. Trade has also been affected adversely by a sharp shrinkage in credit to finance imports and exports.
Although the crisis began in the United States, financial institutions and economies throughout the developed and developing world have been severely affected. The deteriorating economic situation has taken a toll on both consumer and business confidence, and produced a negative feedback between the financial sector and the rest of the economy that dominates the outlook for 2009. The months since last September have seen precipitous drops in global production and trade, first in the developed economies, then in developing ones as well. Indexes calculated by the Organization for Economic Cooperation and Development (OECD) of composite leading indicators for the major industrial economies have plunged to January 2009, indicating a high probability of a continuing decline in economic activity. Governments have tried a variety of policy measures to address the economic crisis, including bailouts for banks that are important for the economic and financial system, and, more recently, mortgage assistance for struggling home owners in the United States. All of this is in addition to monetary and fiscal policies that have been deployed since the start of the crisis. Conventional monetary policy may be reaching the limits of its effectiveness, with interest rates in the United States and elsewhere approaching zero. The timing of the recovery may now depend on how effective are proposed fiscal stimulus plans, which currently amount to more than 3% of world production.
Since the recession began to take hold in the fourth quarter of 2008 there has been little cause for optimism in the outlook for trade in 2009. The financial crisis has disrupted the normal functioning of the banking system and deprived firms and individuals of much-needed credit. Falling stock markets and housing prices have also administered negative shocks to wealth in the United States and elsewhere, making households unwilling to purchase durable goods such as automobiles while they attempt to rebuild their savings. Falling commodity prices, while a boon to consumers in importing countries, have also deprived oil-producing countries of export revenues.
Not even China, with its dynamic economy, can insulate itself from global downturn when most of its main trading partners are in recession. China's exports to its top six trading partners (treating the EU as a single partner) represented 70% of the country's total exports in 2007. All of these trading partners are currently experiencing economic contraction or slowdown and are likely to exhibit weak import demand for some time.
Available monthly data for most major traders show large drops in merchandise exports and imports through the first two months of 2009. An exception to this pattern of decline in trade flows is discernible for certain economies in Asia, where positive monthly import growth numbers were recorded for China (17 per cent) and also for Singapore, Chinese Taipei and Vietnam. While this is only a single month of data, and should therefore be interpreted cautiously, it could be evidence of slowing decline and perhaps a “bottoming out” of negative trade growth trends. Future trade growth will, of course, depend on what happens to demand elsewhere in the world economy.
Moreover, the question must be asked as to how far trade could conceivably fall in the months ahead. As an example, consider China's exports. In February these were down 26% compared with the same month in the previous year and 28% compared with January. If one were to extrapolate this downturn, China's exports would be approaching zero within ten months to a year. This is obviously a highly implausible scenario and emphasizes the reality that such steep declines as those we have witnessed recently will not persist.
The above estimates of trade growth are supported by the results of the WTO Secretariat's time series forecasting model which predicts for developed countries (more precisely, members of the Organization for Economic Cooperation and Development or OECD), a slow-down in imports of goods and services of some 8.5% (technically, “on a balance-of-payments basis”) (Chart 1).
Chart 1: Real GDP and trade growth of OECD countries, 2007-2008 % change on a year to year basis

We have evidence that food prices, even after declining from last year, are still high by historical standards. Combined with the present economic slowdown, we continue to face a crisis with respect to food security. Even in this new situation, the underlying principles and conclusions encompassed in the Comprehensive Framework of Action (CFA) and the Rome Declaration remain valid, and are even more urgent to emphasize.
With respect to trade policies, the CFA emphasizes inter-alia:

• keeping in mind the effects on poor consumers and farmers,
• reducing restrictions, including tariffs, and other distortions in the trade policy regime,
• improving trade facilitation,
• rapidly completing the Doha Round of trade negotiations to provide an enhanced set of agreed rules for a more transparent and fair international trading system, and
• implementing an “Aid for Trade” package to strengthen the capacity of developing countries.

The Declaration from the Rome meeting last year also emphasizes these initiatives. It also notes that new opportunities arise for developing countries through international trade. This is both due to larger market opportunities and through access to cheaper food that international trade provides. For poor countries, international trade is particularly important. Net food-importing countries, which include the most vulnerable, rely on imports for a large portion of their domestic requirements, ranging from about a quarter to even more than half of their domestic requirement. Trade allows supply to adjust to demand, and helps raise the availability of food in comparison to the situation when markets are restricted. Noteworthy in this context is also a recent assessment by von Braun of IFPRI that self sufficiency is not a solution to the food price crisis.
When we consider the types of trade policy responses of various countries to the current global food crisis, we can see that many more countries have relied on trade liberalization than on trade restriction. For instance, in a data set covering 104 countries for the period from 2006 to August 2008, IFPRI has shown that while only 20 countries used trade restrictions, more than double, i.e. 47 countries, relied on trade liberalization. Of these, 16 countries used both trade restrictions and trade liberalization policies. Thus, in some cases we had the same country responding with trade liberalization in order to allow cheaper food imports, but using export restrictions with respect to exports.
More recent information from 2008 and January 2009 also shows that the number of countries adopting trade liberalization policies were more than those resorting to trade restriction. Furthermore, a number of these restraints have been reduced over time as concerns from importing countries were registered and the food prices came down. Some countries have also put in place policies for trade facilitation, and several have taken steps to try and ease the availability of trade finance. It is interesting to note that in certain instances, export restraints on agriculture products have been reduced together with the package implemented to stimulate the economy.
Nonetheless, at present, there is growing pressure to adopt protectionist policies, thus reducing market opportunities. Recognising this, there are many who emphasize a need to be careful and to not resort to protectionist policies. These efforts to contain protectionist pressures reflect the memories of protectionist trade wars which contributed to the great depression in the 1930s, as well as the realization that prosperity in the world today is significantly derived from international trade. Furthermore, the adverse effects of protectionist policies and curbing international trade extend across several areas of global concerns, including development, environment, or food security.
Take for example environmental concerns, and in this context a recent Draft Report of UNEP on “A Global Green New Deal” (or GGND). This Report concludes that “trade protectionism, which may increase as a result of the deepening global recession, is an anathema to the GGND”, and that “the international community needs to reach successful conclusion of the Doha Round trade negotiations, especially on fishery subsidies, clean technology and services and reducing agricultural protectionism.”
Likewise, one of the targets of Goal 8 of the Millennium Development Goals is to “develop further an open, rule-based, predictable, non-discriminatory trading and financial system”. The WTO is such a trading system, and the Doha Round is an effort to develop this system further. This multilateral trading system provides a collective insurance policy against the disorder caused by unilateral actions, whether open or disguised. Its role is obviously crucial in the situation we face today.
However, some commentators have expressed the view that the WTO system is too restrictive for achieving domestic objectives, and that this system treats agriculture products like any other manufactured products.
The WTO Agreements specifically recognize various domestic policy objectives and provides the flexibility to address them in a disciplined and transparent manner. For agriculture, the WTO system has been developed taking account of the sensitivities particular to the agriculture sector. Thus, the WTO disciplines relating to agriculture are different from those relevant for non-agricultural products. That is why there is a separate Agreement on Agriculture, which provides relatively greater flexibility. Furthermore, for poor farmers, developing countries are allowed to give any domestic policy assistance that they wish to give.
This basic structure is maintained in the Doha Round too. The Doha Round also includes the possibility for developing countries to use a new and easier safeguard mechanism for agriculture, and provides additional flexibilities for public stockholding operations in developing countries. The Doha negotiations aim at reducing the inequities which arise due to differences in levels of development, thus creating a more level playing field for competition. This will help countries produce more efficiently and to increase the beneficial effects of the several agriculture investment and infrastructure-related initiatives that are mentioned
in the CFA.
Likewise, WTO disciplines do not prevent the adoption of policies normally mentioned to achieve objectives, such as promoting pro-poor agricultural growth, reducing market volatility, and expanding social protection and child nutrition. Even for agriculture tariffs, there is a significant flexibility, including for least-developed countries. In fact, all the domestic policy initiatives, such as seeds, fertilizers, focus on small farmers, investment, availability of funds etc., that have been mentioned in the sessions today for addressing food security are possible to be implemented under the WTO. The WTO Agreement is not a constraint on using such initiatives.

In the Doha Round agriculture negotiations, further progress was made even in the second half of last year on issues which were a stumbling block in the July Ministerial meeting. The negotiating group Chairman's paper shows that there are only a few key issues that are left to be addressed to conclude on modalities for agriculture.

On trade facilitation too, WTO members have made considerable progress. Today, we need continued political focus on the negotiations to conclude them and therefore the emphasis calling on their successful conclusion needs to be maintained.
Work on Aid for Trade has progressed at the WTO, together with partner agencies. A major meeting is being considered for this year. Thus, while relevant work is continuing, protectionist pressures need to be addressed, and the messages of CFA and the Rome Meeting need to be re-iterated to emphasize continued progress on them.

Director-General Pascal Lamy, in a message to the Arab Economic and Social Development Summit held in Kuwait on 19-20 January 2009, said “because international trade is so vital to your economies, the WTO must also be vital to you”. He underlined the importance of the WTO as an “insurance policy against protectionism”. This is what he said:
Ladies and gentlemen,
I regret to say that I could not be with you today at the Arab Economic and Social Development Summit in Kuwait. I nevertheless wanted to share my thoughts with you on the importance of international trade to the Arab region, and the importance of the Arab region to the World Trade Organization.
Today 12 Arab countries are members of the WTO, with several of them having been party to the WTO's predecessor accord — the General Agreement on Tariffs and Trade. These countries have played an important role in building the multilateral trading system as we know it today, and in shaping its goals.
Another six Arab countries are in the process of acceding to the WTO, and include Algeria, Libya, Lebanon, Syria, Yemen and Iraq. They are all in the process of negotiating their terms of entry; with some of these accession negotiations being at very different stages. The most recent Arab member of the WTO, Saudi Arabia, no doubt has a role to play in assisting other Arab economies in joining the WTO; a process which can only begin with a thorough understanding of the WTO rule-book.
The importance of international trade to the Arab region cannot be overestimated. The Arab economy that is most dependent on imports is the United Arab Emirates, whose imports of goods and services constitute 86 per cent of its GDP. It is followed by countries such as Jordan, Mauritania and Bahrain, whose import to GDP ratio is in the 70 per cent range. I would be remiss if I were not to mention that these imports have been vital to the region's food security.
The Arab world's export to GDP ratio also testifies to the deep international economic integration of the Arab region. Once again, the Arab economy that is most economically dependent on exports is the United Arab Emirates, whose exports of goods and services constitute 99 per cent of GDP. It is followed by Bahrain, Qatar, Kuwait, and Oman, whose export to GDP ratio is in the 65-90 per cent range.
These numbers speak for themselves and do not require much interpretation. The Arab region needs the outside world just as much as the outside world needs the Arab region. The numbers are equally stark for several of the six Arab economies that are in the process of acceding to the WTO. In Algeria and Libya, for instance, the export to GDP ratio is in the 50 per cent range, and import to GDP ratio around 30 per cent. There is no doubt, therefore, that these economies would benefit from orderly international trade, through the rules of the WTO.
Economic reform is under way in many quarters of the Arab world, and so is deeper intra-Arab economic integration, with several Arab economies gradually moving up in the scale of the world's most competitive economies. Some have even been considered among the top reformers; such as Egypt, with its recent efforts to reduce the cost of doing business in Egypt and in slashing red tape. All these efforts are to be congratulated and must continue to be pursued.
My message to you today is this: because international trade is so vital to your economies, the WTO must also be vital to you. A strong, coordinated and active Arab group in the WTO would no doubt help advance some of your economic priorities. The WTO Doha Round of trade negotiations, launched in 2001 in the capital city of Qatar, is still under way. It includes many areas of economic importance to the Arab region, such as energy services, transportation and distribution services, and negotiations on trade facilitation to do with the reduction of customs red tape, to mention but a few. I would ask that the Arab region prioritize these negotiations, and prioritize the formation of a strong Arab coalition on trade to vigorously pursue its interests through the multilateral platform that is the WTO.
Today as the economic crisis bites into our economies, and as protectionist pressures knock on our doors, we must recall the importance of the insurance policy against protectionism that the WTO offers through 60 years of global rule-making, and its dispute settlement system. Now is the time to strengthen the rules of international trade by concluding the Doha Development Round of negotiations.
I look forward to your cooperation in this endeavour, and hope to have the opportunity to visit your region in the coming period.

He said he looked forward to the G20 meeting in April “to provide further impetus to our work”. Report by the Chairman of the Trade Negotiations Committee
Thank you Mr Chairman.
Since my last report to the General Council in December, we have come back from the end-of-year break to increasingly sombre news about the state of the world economy. Today it is clear that trade has become one of the casualties of the economic crisis. We have already witnessed a sharp decrease in world trade. Our biggest challenge today, therefore, is to ensure that the trade is part of the solution as opposed to aggravating an already serious crisis which risks making the recession longer and deeper.
The world growth projections today are at 0 per cent, with developed countries posting a negative growth of -2 per cent and developing countries a positive one of around 5 per cent. The positive growth comes from emerging countries which are highly dependent on trade. Everyone needs to remember the lessons of history and keep this important engine of growth running.
The WTO's role in this crisis must go beyond its function as a safety net of rules, vital though this is. As I announced in December, we have started to act on a number of fronts to assess and where possible be part of the solution to the current crisis.
I issued my first report on trade-related developments as a result of, or in the context of, the financial crisis. We will have the opportunity to discuss it at the meeting scheduled to take place on 9 February. The information in the report should be regarded as work in progress. I will be providing members with further updates in the coming months to help you get a comprehensive and up-to-date view of the situation.
We are also working on trade finance. Last November I convened private banks, international financial institutions and regional development banks to assess the problem and look for solutions. The message that came from the WTO conference and the G-20 on trade finance boosted the mobilization of export credit agencies and regional development banks. Despite these efforts, however, the situation remains critical, with trade financing drying up, particularly in developing countries, in a situation of rapid deterioration of risk perception. This in turn risks accelerating the contraction of trade and output in the only part of the world (developing countries) that is expected to sustain positive growth in 2009. I have again convened the main actors in the area to a meeting
at the WTO on 18 March to continue to do our utmost
to mobilize all actors to ensure better access to
trade finance.
Thirdly, we have Aid for Trade, which we must sustain and reinforce, particularly now that the crisis is hitting hard many of the most vulnerable members. On 6 and 7 July we will be hosting the Second Global Aid for Trade Review. Between now and then we must prepare the ground to show how Aid for Trade is working in practice and to review the fulfilment of the commitments to additionality. I look forward to working with the Chair of the Committee on Trade and Development and the membership to prepare this meeting.
Turning specifically to the negotiations, let me remind you that, at our December meetings, we heard many members call for a speedy conclusion of the Doha Round.
Since then, we have continued to hear similar calls coming from all regions, and political and business leaders alike.
I believe the fundamental reasons why this Round is needed are now even more compelling and urgent than they were at the end of last year. Trade with its multiplier effect must be an integral part of the stimulus packages that are being adopted. A successful outcome of the Doha Development Round can therefore be part of the solution to the economic downturn. It will also send the political signal that in harsh and difficult times, governments are capable of working together to provide the kind of global answer which is so desperately needed.
Considering recent developments in government measures to cope with the crisis, I believe it is now clear that:

• The trade side of the reaction cannot be seen in isolation from the stimulus packages
• International cooperation and coherence is indispensable across the board. Stimulating internal demand has an impact on imports, and there is a danger that discrepancies in the size and the injection of public funds may generate pressures to reserve their benefits for domestic operators. Such a “go-it-alone” would no doubt make the situation worse. To paraphrase Mahatma Gandhi, who said “an eye for an eye makes the whole world blind”, today we could say that “if it is a job for a job, then we will have massive unemployment”.

Since the beginning of the year, we have resumed work in all areas of the negotiations, with the Chairs undertaking work according to the plans they set out to members at the December TNC. I would like to thank delegations for the commitment they are giving
to this work.
Several members have recently gone through political changes and others have elections coming up. This cannot be a reason to sit on our hands, although it does not help us look ahead with certainty at particular timings for this year. But, as many delegations noted in December, we still have a lot of work to do across the board to prepare for both our immediate goal of establishing modalities in Agriculture and NAMA and our longer-term one of successfully concluding the negotiations under the Single Undertaking. We must, as of right now, prepare everything we can, so that when the moment is right for political decisions, we are ready.
Last week, on the sidelines of the World Economic Forum in Davos, the Swiss Minister, Doris Leuthard, hosted an informal gathering of Trade Ministers. The aim was to examine the impact of the economic crisis on trade and to take stock of where we are in the negotiations and outlook for the year.
At the gathering, Ministers present recognized the dangers of sliding into isolationism and tit-for-tat measures, which have proven so devastating in the past. They also underlined the necessity to preserve and maintain the integrity and openness of a rule-based multilateral trading system, which is at the heart of economic growth, furthering jobs and prosperity. They continue to attach the highest priority to a successful conclusion of the Round and they recognized the major progress made in 2008 towards finalizing modalities, which they believe provides a sound basis for an early resolution of the remaining differences.
With this continuing commitment at ministerial level, I will of course continue to ensure that the Round is kept at the forefront of the issues facing leaders at the worldwide level in the coming weeks. We look also to the leaders of the G20 to provide further impetus to our work here when they meet in London in April.
Here in Geneva, I will continue to work with the Chairman of the General Council and the Negotiating Group Chairs to ensure that we take the negotiations forward, across the board, as rapidly as possible. We are working not only under time pressure, but also under the pressure of the need to make a positive difference to the global economy.
That concludes my report today, Mr. Chairman.
Thank you.

economic research agency in Canberra, on the last day of a three-day Analysts differ in their view of whether commodity prices will rise or fall, but either way a Doha Round deal in agriculture would help stabilize the world economy and supply food to where it is needed, WTO Director-General Pascal Lamy said on 4 March 2009. He was addressing the “Outlook 2009” conference of the Australian Bureau of Agricultural and Resource Economics (ABARE), a government economic research agency in Canberra, on the last day of a three-day visit to Australia.
Ladies and gentlemen, After having followed your work and read your studies with great interest for many years, it is a pleasure to finally be at ABARE! ABARE's work on complex agricultural policy issues, fisheries and forestry, minerals, energy and climate change have been particularly instructive to us all. It is think-tanks such as ABARE that allow the WTO's work to go forward; that help the WTO make sense of the complex landscape of issues that constitutes its day-to-day work.
The WTO, as you know, did not succeed in reaching a final agreement on modalities for agriculture and industry — two key pillars of the Doha Round — at the end of last year. Such an agreement would have paved the way for the complex, and quite tedious process, of turning guidelines into legally binding obligations — or “scheduling” as we call it in our jargon.
And, just as importantly, it would have paved the way for the completion of other areas of the Doha Round, such as the services negotiations, the reduction of harmful fisheries subsidies, or trade and the environment. These subjects would have no doubt gained steam had we been successful last year; but, to our great dismay, agreement proved elusive.
Australia played an extremely constructive role in the negotiation, throughout its various stages, in particular through the Cairns Group coalition. Australia, and the Cairns Group, saw and understood the value of the deal that was being proposed until the very end. But we did not manage to close the gap on issues such as the Special Agricultural Safeguard Mechanism and the market opening of specific industrial sectors.
Today, we find ourselves in the midst of a financial crisis and a global economic recession of unknown proportions. Some are already beginning to regret the opportunity they lost last year to conclude the Doha deal. Global output and trade plummeted in the final months of 2008, and global growth in 2009 is expected to fall further.
Of particular note is the World Bank's forecast of a drop in global export volumes of 2 per cent in 2009, the first decline since 1982. Developing countries — who are most in need of economic growth — will be particularly badly hit, with their export opportunities fading because of the recession in high-income countries, the shortage in export credits, and the rising cost of export insurance. This, coupled with reduced foreign direct investment, reduced remittances from migrant workers abroad, and further falls in commodity prices, is likely to be a serious strain on many of their economies.

As a veteran WTO negotiator has put it to me, rather than creating new trading opportunities, the WTO now finds itself struggling to preserve the status-quo. WTO members are concerned about beggar-thy-neighbour policies and this is why we have switched on the WTO “radar screen”, to track measures that countries are adopting in the context of the current crisis.

While the first indications are that there has been “limited evidence so far” of isolationist moves, some trade measures have indeed been taken, and are documented in the first report I produced for the membership. We must remain vigilant, nevertheless, in particular as the crisis starts to bite. A new radar picture will appear a fortnight from now.
But herein lies a complex issue, that few have bothered to think about, and which many had underestimated in valuing the Doha deal. Several new barriers to trade, in terms of increase in tariffs or in trade-distorting subsidies, can be perfectly legal in the WTO. Why? Because countries may not have been using, in the past, their tariff and subsidy entitlements to their fullest capacity. But, in the midst of the financial crisis, many are certainly contemplating doing so!
These unused entitlements, if used, could set the world economy and world trade back several years. And it is much of these unused entitlements that the Doha Round would have helped eliminate.
Let me clarify this picture to you further since, as I am sure you can appreciate, it is critical to properly assess the value of the Doha deal. Today, countries can more than double their agricultural tariffs from their current level, while remaining within the boundaries of their WTO commitments. The same can be done with industrial tariffs, again while remaining perfectly WTO-legal. Can you begin to imagine what that would mean for world trade if it were to materialize?
But, of course, as we were negotiating up until the end of last year, many sought a Doha accord that would deliver “substantially new trade flows”. I do not blame them, new flows are indeed desirable. But it was certainly unfortunate to have underestimated the value of preserving existing trade flows! Yes going forward — over and above what we have today — is good. But we must start by eliminating the possibility of going backwards.
A recently released study by the International Food Policy Research Institute (IFPRI) has tried to assess the “Cost of a Non-Doha”. In a scenario where the tariffs that are currently applied by major economies rise all the way up to their legal ceilings in the WTO, it finds that world trade could shrink by up to 8 per cent, reducing global welfare by up to US$ 350 billion. I leave those numbers for all of you to contemplate.
In the midst of the financial crisis and the economic recession that we are now experiencing, turmoil in the world's agricultural markets has persisted. But I need not demonstrate this turmoil to you, since no one knows better, or feels this turmoil more, than you here in Australia. I was struck by the fact that in 2007, agriculture's contribution to Australia's GDP fell by a full 10 per cent. And while the sector's contribution to GDP picked up again in 2008, it may have to see its rate of growth fall once again due to the current economic crisis, and swings in commodity prices.
But these, of course, are not the only factors involved. Drought, which you know about all too well, and forest fires have also taken their toll. A reminder for us all of how dependent we continue to be on climate, despite the latest technology at our disposal, and of the potential threats of climate change to our wellbeing. In fact, I take this opportunity to offer my condolences to all the people of Australia afflicted by the fires of this past month. My thoughts are with you.
Within the span of the last two years, the world has moved from a situation where ordinary citizens were protesting on the streets due to rising food prices to one where food prices have fallen, and agricultural producers are the ones protesting instead.

A debate now rages on whether the factors that have created the recent food crisis have disappeared. While the autumn 2008 report of the OECD/FAO on the world's agricultural outlook for 2017 argued that food prices would shortly resume their long-term price decline, this conclusion is debated by various research groups. Some of the latter argue that population growth, rising demand,
high energy costs, increasing pressure on farm land and water, and climate change may all cause prices to go the other way. Irrespective of these forecasts, I would argue that any element of stability that can be brought to this picture must be pursued. The Doha Round's agricultural package, which reduces tariffs, reduces harmful internal subsidies that prevent in particular the developing world from fairly competing, and which eliminates export subsidies altogether, is no doubt worth pursuing. Quite surprisingly, in the midst of the food crisis, we have heard calls for “food self-sufficiency”, with some portraying import-substitution as the answer to food security. What this forgets is that international trade can be exactly the sort of vehicle, or “conveyor belt” if you will, that would allow food to travel from parts of the world with a surplus to parts where there is a shortage. In so doing, it can bring down food prices — something which the world's poor would certainly thank you for. In the Doha Round's agricultural package, the monopoly power of State-Trading Enterprises is under discussion. Some would like to see these monopoly powers go, and consider them an export subsidy. I do not intend to meddle in Australia's domestic affairs, and note that some change was in any case made at the end of last year, but would simply offer the following comment. Changes to some of the practices of STEs, in my view, are a relatively small price to pay for an economy whose agricultural products account for about 16 per cent of its total exports, and which would benefit tremendously from the overall Doha deal. Let me now turn to the environmental chapter of the Doha Round negotiations.
I am convinced we must all invest in this chapter of the negotiations, not least because it would usher in a new beginning for the WTO. This is the first time ever in the history of Rounds of trade negotiations that environmental issues have been so explicitly placed on the agenda. Were these negotiations to fail, there would be little that the WTO could do in
the environmental sphere in future. Hence, the importance of making them succeed. So far, they cover three main issues: ensuring greater harmony between the rules of the WTO and those of Multilateral Environmental Agreements; opening trade in environmental goods and services; and reducing environmentally harmful fisheries subsidies that deplete our oceans. Ladies and gentlemen, we cannot afford to let the environment be yet another casualty of the financial crisis. And I would like to commend Australia on the green provisions of its stimulus package; in particular, I am told, the AD$ 3.8 billion that have been allocated for household insulation and the solar hot water programme. Were we to bring the Doha Round's environmental negotiations to shore, the WTO may be able to turn to much more complex issues like the interface between WTO rules and climate change. Australia is of course in the process of setting up its emissions trading scheme, as are several other countries such as Japan and New Zealand. Trade rules will need to be leveraged in the fight against climate change, no doubt, and the sooner the better. The trade agenda must respond to the Copenhagen agenda, and to the environmental aspirations of the very membership of the WTO. Climate change, and the irreversible havoc that it may wreak, cannot afford to wait. We need to finish the Doha Round now, so we can turn to the higher mountains that we must still climb. I count on Australia's leadership to deliver these messages to the upcoming G20 leaders summit in London. Thank you for your attention.

TRADE POLICY REVIEW: GUATEMALA
Gains from liberalization could be enlarged by further strengthening competition and the regulatory framework
Since its last review in 2002, Guatemala has continued to place trade liberalization at the core of its development strategy, taking measures such as the streamlining of customs procedures, lowering tariffs, and adopting new government procurement and intellectual property rights legislation; these measures have helped expand trade and investment, according to a WTO Secretariat report on the trade policies and practices of Guatemala. The report states that economic expansion needs to be sustained and increased in order to achieve improvements in living standards, which in turn requires keeping up the ongoing efforts designed to strengthen competition and the regulatory framework in sectors such as telecommunications, financial services and maritime transport. The WTO report also notes that Guatemala offers fiscal concessions which include export subsidies, and observes that it would be useful to define a concrete strategy to minimize the transition costs to a subsidy-free regime. The WTO report, along with a policy statement by the Government of Guatemala, will be the basis for the second TPR of Guatemala by the Trade Policy Review Body of the WTO on 4 and 6 February 2009.
TRADE POLICY REVIEW: BRAZIL
Promoting market competition would help sustain economic growth
Since its last review in 2004, Brazil has continued with the gradual modernization and streamlining of its trade regime, while also increasing average tariff protection. The economy has taken advantage of recent reforms and a favourable environment to grow at an annual average rate of 4.5% during 2004-2007, and 6.3% on the 12 months to September of last year, according to the WTO Secretariat report on the trade policies and practices of Brazil. The report notes that, despite these positive achievements, and in order to meet the new challenges presented by the current world economic slowdown, Brazil needs to press on with its efforts to give additional impetus to trade and investment, including lower effective tariff protection, reducing the
use of import prohibitions and providing greater predictability to the foreign investment and
trade regime. Solving the long standing problem of high domestic interest rates and taking additional steps to promote market competition and an efficient allocation of resources would help Brazil sustain economic growth and continue improving the living standards of its population. The WTO report, along with a policy statement by the Government of Brazil, will be the basis for the fifth TPR of Brazil by the Trade Policy Review Body of the WTO on 9 and 11 March 2009.
TRADE POLICY REVIEW: FIJI
Market opening and deregulatory measures would promote a more diversified & efficient economy Since its last review, Fiji has undertaken some trade-related reforms and has liberalized and rationalized its foreign investment regime, reforms that are seen as integral to Fiji's economic priorities of a developing, efficient and competitive open economy to promote export-led growth, according to a WTO Secretariat report on the trade policies and practices of Fiji. Growth has been erratic and generally sluggish, averaging less than 1% annually since 2003. There are doubts on the economic benefits of Fiji's expanded network of bilateral and regional agreements; some tax incentives have dubious economic merit; and significant trade and other impediments remain to the efficient allocation of resources, such as government intervention, state-ownership, public and private monopolies and a general lack of competition. The report notes than further market opening and deregulatory measures in key sectors would facilitate adjustment toward a more diversified and efficient economy. It also says that the speed at which the economy recovers will hinge in the interim Government's ability to meet economic challenges like restructuring of the economy to improve productivity and competitiveness, as well as on making urgent political reforms. The WTO report, along with a policy statement by the Government of Fiji, will be the basis for the second TPR of Fiji by the Trade Policy Review Body of the WTO TPR.
New WTO publication sheds light on global trade in services Opening Markets for Trade in Services highlights the key challenges and opportunities for the services sector in a globalized economy. This new book - co-published by the World Trade Organization and Cambridge University Press - focuses on the unilateral action taken by countries across the world as well as the bilateral and multilateral liberalization of trade in services. It explores the challenges, motivations and achievements of the growing number of preferential trade agreements (PTAs) between countries and of the global trade negotiations within the WTO.
The publication includes studies on a wide range of sectors, such as air transport, distribution, audiovisual services, postal services, energy, finance and telecommunications, and on a variety of themes, such as cross-border trade, government procurement and the movement of natural persons. Chapters covering each of these sectors/themes review market and regulatory developments, discuss key negotiating issues and assess the liberalization already achieved by PTAs and WTO negotiations. The book also looks ahead to future opportunities and challenges.
The book also includes case studies on countries as diverse as Australia, Chile, Colombia, Costa Rica, Dominican Republic, India, Singapore, South Africa, Thailand and Uruguay. These case studies aim to shed light on the elements that have shaped bilateral and multilateral negotiations on services. What are the reasons for negotiating bilateral agreements? Why do negotiations lead to such different results? What role is played by national interests?
Contributors to this volume include WTO staff, negotiators, academics and experts from other international organizations. A foreword has been provided by the WTO's Director-General, Pascal Lamy.

ACCESSIONS
Bosnia and Herzegovina reports significant progress in bilateral accession talks
The head of the Bosnia and Herzegovina's negotiating team, Mr. Hamdo Tinjak, reported to the Working Party on 19 March 2009 about “significant progress” in its market-access negotiations during the week with Canada, China, the European Union, Japan, Korea, Norway and the United States. He said its negotiations in goods with Norway were almost concluded, and that he believed agreement with other members could be reached in the coming months. Mr. Tinjak also reported progress in his country's legislative action plan for WTO accession, especially in the areas of sanitary and phytosanitary measures, and on intellectual property rights. Many members of the Working Party expressed support for the speedy accession of Bosnia and Herzegovina.
During the discussion on the draft report of the Working Party, many technical questions were submitted to Bosnia and Herzegovina, and concerns were expressed regarding certain aspects of the country's trade regime.
The Chairman, H.E. Dr. István Major, in his concluding remarks, said it had been a fruitful, positive meeting, and thanked the Bosnia and Herzegovina's delegation for a constructive, frank and open discussion. He urged members and Bosnia and Herzegovina to intensify their bilateral negotiations, adding that he expected some of these negotiations to be concluded before the next meeting. Bosnia and Herzegovina's Working Party was established on 15 July 1999. A Memorandum on the Foreign Trade Regime was submitted in October 2002. Bilateral market access negotiations are underway on the basis of revised offers in goods and services.
Chairpersons of WTO Bodies — 2009
WTO chairpersons for 2009 The WTO General Council on 3 February noted the consensus on the following slate of names of chairpersons for WTO Bodies.

AWARNESS ABOUT WTO
The Government disseminates information and spreads awareness about the World Trade Organisation (WTO) through consultations with the State Governments, administrative Ministries, apex Chambers of Commerce and Industry and other stakeholders. Information on WTO negotiations is uplinked on the website of the Department of Commerce at www.commerce.nic.in and is updated on a regular basis. The Centre for WTO Studies, a professional body created by the Department of Commerce acts as an institutional information centre on WTO negotiations. The Centre carries out various activites relating to awareness on WTO issues such as organising seminars and conferences; capacity building through training workshops; updation of information on their website and publication of a WTO newsletter.
At the Non Agriculture Market Access (NAMA) negotiations at the World Trade Organisation, India has been negotiating for safeguarding the interests of the industrial sectors including pharmaceuticals. In the ongoing Doha Round of trade negotiations, India along with its coalition partners has been negotiating for flexibilities that are both adequate and appropriate for protecting the interests of Indian industries.
PREFERENTIAL DUTY FREE MARKET ACCESS
The Duty Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs) announced on the occasion of the India Africa Forum Summit on 8 April, 2008 would have a positive impact on the LDCs. It provides enhanced market access for the products of export interest to LDCs thereby helping in their economic development. The Scheme provides duty free and preferential market access to all LDCs on 94% of India's total tariff lines. These tariff lines cover 92.5% of the global exports of all LDCs.
As per the World Trade Organisation's (WTOs) Trade Policy Revies report, China provided special preference tariffs to imports of some goods from 37 least developed countries (LDCs) with which it had certain tariff agreements. Brazil is still in the process of formulating a DFQF preferential market access scheme for LDCs. Several other countries both developed and developing, provided preferential market access to LDCs.
The details of the some of these schemes are as below;

ACP
African, Caribbean and Pacific countries. Group of countries with preferential trading relations with the EU under the former Lomé Treaty now called the Cotonou Agreement.
Amber Box
Domestic support for agriculture that is considered to distort trade and therefore subject to reduction commitments. Technically calculated as “Aggregate Measurement of Support” (AMS).
Appellate Body
An independent seven-person body that considers appeals in WTO disputes. When one or more parties to the dispute appeals, the Appellate Body reviews the findings in panel reports.
Box
In agriculture, a category of domestic support. Green box: supports considered not to distort trade and therefore permitted with no limits. Blue box: permitted supports linked to production, but subject to production limits, and therefore minimally trade-distorting. Amber box: supports considered to distort trade and therefore subject to reduction commitments.
Cairns Group
Group of agricultural exporting nations lobbying for agricultural trade liberalization. It was formed in 1986 in Cairns, Australia just before the beginning of the Uruguay Round. Current membership: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay.
Circumvention
Getting around commitments in the WTO such as commitments to limit agricultural export subsidies. Includes: avoiding quotas and other restrictions by altering the country of origin of a product; measures taken by exporters to evade anti-dumping or countervailing duties.
De minimis
Minimal amounts of domestic support that are allowed even though they distort trade — up to 5% of the value of production for developed countries, 10% for developing.
Domestic support
(Sometimes “internal support”.) In agriculture, any domestic subsidy or other measure which acts to maintain producer prices at levels above those prevailing in international trade; direct payments to producers, including deficiency payments, and input and marketing cost reduction measures available only for agricultural production.
Dumping
Occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost.
Food security
Concept which discourages opening the domestic market to foreign agricultural products on the principle that a country must be as self-sufficient as possible for its basic dietary needs.
Free trade area
Trade within the group is duty free but members set their own tariffs on imports from non-members (e.g. NAFTA).
GATT
General Agreement on Tariffs and Trade, which has been superseded as an international organization by the WTO. An updated General Agreement is now the WTO agreement governing trade in goods. GATT 1947: The official legal term for the old (pre-1994) version of the GATT. GATT 1994: The official legal term for new version of the General Agreement, incorporated into the WTO, and including GATT 1947.
Geographical indications
Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place.
Green box
Domestic support for agriculture that is allowed without limits because it does not distort trade, or at most causes minimal distortion.
GSP
Generalized System of Preferences — programmes by developed countries granting preferential tariffs to imports from developing countries.
Harmonized System
An international nomenclature developed by the World Customs Organization, which is arranged in six-digit codes allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes.
Intellectual property rights
Ownership of ideas, including literary and artistic works (protected by copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise (protected by trademarks) and other elements of industrial property.
Mailbox
In intellectual property, refers to the requirement of the TRIPS Agreement applying to WTO members which do not yet provide product patent protection for pharmaceuticals and for agricultural chemicals. Since 1 January 1995, when the WTO agreements entered into force, these countries have to establish a means by which applications of patents for these products can be filed. (An additional requirement says they must also put in place a system for granting “exclusive marketing rights” for the products whose patent applications have been filed.)
MFA
Multifibre Arrangement (1974-94) under which countries whose markets are disrupted by increased imports of textiles and clothing from another country were able to negotiate quota restrictions.
MFN
Most-favoured-nation treatment (GATT Article I, GATS Article II and TRIPS Article 4), the principle of not discriminating between one's trading partners.
Modes of delivery
How international trade in services is supplied and consumed. Mode 1: cross border supply; mode 2: consumption abroad; mode 3: foreign commercial presence; and mode 4: movement of natural persons.
National treatment
The principle of giving others the same treatment as one's own nationals. GATT Article 3 requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article 17 and TRIPS Article
3 also deal with national treatment for services and intellectual property protection.
Non-agricultural products
In the non-agricultural market access negotiations, products not covered by Annex 1 of the Agriculture Agreement. Fish and forestry products are therefore non-agricultural, along with industrial products in general.
Non-trade concerns
Similar to multi-functionality. The preamble of the Agriculture Agreement specifies food security and environmental protection as examples. Also cited by members are rural development and employment, and poverty alleviation
NTBs
Non-tariff barriers, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. Same as “non-tariff measures”.
Panel
In the WTO dispute settlement procedure, an independent body is established by the Dispute Settlement body, consisting of three experts, to examine and issue recommendations on a particular dispute in the light of WTO provisions.
Paris Convention
Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of industrial intellectual property, i.e. patents, utility models, industrial designs, etc.
QRs
Quantitative restrictions — specific limits on the quantity or value of goods that can be imported (or exported) during a specific time period.
Rules of origin
Laws, regulations and administrative procedures which determine a product's country of origin. A decision by a customs authority on origin can determine whether a shipment falls within a quota limitation, qualifies for a tariff preference or is affected by an
anti-dumping duty. These rules can vary from country to country.
S&D
(Sometimes “SDT”.) “Special and differential treatment” provisions for developing countries. Contained in several WTO agreements.
SACU
Southern African Customs Union comprising Botswana, Lesotho, Namibia, South Africa and Swaziland.
Safeguard measures
Action taken to protect a specific industry from an unexpected build-up of imports — generally governed by Article 19 of GATT. The Agriculture Agreement and Textiles and Clothing Agreement have different specific types of safeguards: “special safeguards” in agriculture, and “transitional safeguards” in textiles and clothing
Special safeguard
Temporary increase in import duty to deal with import surges or price falls, under provisions that are special to the Agriculture Agreement.
SPS
Sanitary and Phytosanitary measures or regulations — implemented by governments to protect human, animal and plant life and health, and to help ensure that food is safe for consumption.
Subsidy
There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports.
A domestic subsidy is a benefit not directly linked
to exports
Tariffs
Customs duties on merchandise imports. Levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kgs.). Tariffs give price advantage to similar locally-produced goods and raise revenues for the government.
Tariff binding
Commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties
Tariff escalation
Higher import duties on semi-processed products than on raw materials, and higher still on finished products. This practice protects domestic processing industries and discourages the development of processing activity in the countries where raw materials originate.
Tariff peaks
Relatively high tariffs, usually on “sensitive” products, amidst generally low tariff levels. For industrialized countries, tariffs of 15% and above are generally recognized as “tariff peaks”.
Tariff quota
When quantities inside a quota are charged
lower import duty rates, than those outside (which can be high).
TMB
The Textiles Monitoring Body, consisting of a chairman plus 10 members acting in a personal capacity. Until expiry of the ATC on 1 January 2005 it saw to the implementation of commitments under this agreement.
TPRB, TPRM
The Trade Policy Review Body is General Council operating under special procedures for meetings to review trade policies and practices of individual WTO members under the Trade Policy Review Mechanism.
Trade facilitation
Removing obstacles to the movement of goods across borders (e.g. simplification of customs procedures).
Transitional safeguard mechanism
In textiles and clothing, allows members to impose restrictions against individual exporting countries if the importing country can show that both overall imports of a product and imports from the individual countries are entering the country in such increased quantities as to cause — or threaten — serious damage to the relevant domestic industry.
UPOV
International Union for the Protection of New Varieties of Plants (Union internationale pour la protection des obtentions végétales)
Uruguay Round
Multilateral trade negotiations launched at Punta del Este, Uruguay in September 1986 and concluded in Geneva in December 1993. Signed by Ministers in Marrakesh, Morocco, in April 1994.
VRA, VER, OMA
Voluntary restraint arrangement, voluntary export restraint, orderly marketing arrangement. Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs or other import controls.
WCO
World Customs Organization, a multilateral body located in Brussels through which participating countries seek to simplify and rationalize customs procedures.
Zeroing
An investigating authority usually calculates the dumping margin by getting the average of the differences between the export prices and the home market prices of the product in question. When it chooses to disregard or put a value of zero on instances when the export price is higher than the home market price, the practice is called “zeroing”. Critics claim this practice artificially inflates dumping margins.