Let me first commend the Director-General and the Secretariat on the second Report on the Financial and Economic Crisis and Trade-Related Developments. This report represents a big step forward in terms of both detail and analysis.
The Director-General’s report which we have before us today also informed the discussion at the recent G20 summit meeting. We share the Director-General’s positive assessment of the outcome of the G20 summit as regards trade finance and the reaffirmation of Aid for Trade commitments. More generally, we welcome the G20 on the statement in their communiqué on Resisting Protectionism and Promoting Global Trade and Investment.
We note that the WTO is called upon by the G20 to monitor and report publicly on the adherence to their commitments. This is a call that the WTO should heed.
As to the Director-General’s latest report we are pleased to see that “There is no indication of an imminent descent into high intensity protectionism, involving widespread resort to trade restriction and retaliation. The multilateral trade rules built over the past 60 years continue to provide a strong defence against that happening. “ There could be no stronger reason that the system is worth fighting for and that what sometimes is dismissed as mere ”systemic interests” are legitimate indeed.
A very interesting point is that “One factor helping to contain protectionist pressures so far in this recession has been greater public scrutiny of trade policies”. That shows that this exercise is important, it also strongly underlines the value of peer pressure as an important element in trade policy making.
However we also read that “... there has been significant slippage.” Not surprisingly this seems so far to have mainly affected traditional sectors such textiles, footwear, steel, chemicals and automobiles. These are sectors that in many economies are overdue for restructuring and the Director-General is right when he points to the risk “that measures taken "temporarily" to try to protect jobs and business profits now from the effects of the crisis will create a legacy of uncompetitive industries and sectoral over-capacity that will continue to generate protectionist pressures even after economic activity picks up again”.
Another not surprising, but nevertheless unfortunate, development is the reversal of the positive trend in trade remedies. The dramatic increase in anti-dumping cases in the this crisis environment is a good indication of what such measures too often really are: a simpler, quicker, more direct and discriminatory form of safeguards.
Overall, however, we detect a cautious optimism in the Director-General’s second report. We are hopeful that this optimism will be repeated in future versions of the report.