Former WTO head Moore condemns bilateral trade agreements

Apr 30, 2007, 1:03 GMT

Wellington - With the Doha Round of multi-lateral trade talks stalled, numerous bilateral agreements being negotiated between countries were condemned Monday as a 'dangerous phenomenon' by former World Trade Organization (WTO) head Mike Moore.

'They are not free-trade agreements - they are preferential trade agreements,' he told Radio New Zealand, 'and when you create a preference you create a privilege and a lever for the politicians.'

Moore, who was director-general of the 149-member WTO from 1999- 2002, said that the stalemate in the global round he helped launch in 2001 in Doha, Qatar, was 'very serious' and required political will to resolve.

He blamed the deadlock on vested interests in the European Union, the United States, Japan, Norway and Switzerland, bent on retaining subsidies for farmers and protecting them from developing-country competition.

Moore, a former New Zealand prime minister, said that protected interests seldom surrendered their privileges and perks without a fight. 'That's why it's so hard for politicians, who don't get thanks for taking away a subsidy from somebody,' he said.

The multi-lateral trading system supervised by the WTO must not be allowed to fail, 'because it's delivered too much to the world economy and to peace and security to allow it to wither,' Moore said.

He said that the system devised after World War II had not only been a driver for international stability and peace but had helped lift about 600 million people out of extreme poverty, increased global life expectancy by 20 years and cut infant mortality by two- thirds.

Moore said that the WTO was unique in the international political system for its binding mechanism for settling disputes by arbitration, and there was a net gain to every country in freeing up global trade.

Poor nations in Latin America and Africa stood to gain a lot by a successful conclusion to the Doha Round, which is meant to cut farm subsidies and reduce barriers to agricultural trade, while Americans and Europeans would benefit from the redirection of their massive subsidies, he said.

Moore said European consumers were paying 80 per cent more for their sugar than they should, while US companies were moving to Canada to get cheaper sugar from the Caribbean - 'so there's a win- win for everyone here.'

He described the increasing importance of China and India in the global economy as 'a new elephant in the room, which changes everything.'