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WTO chief trying to avert economic crisis

By Jiang Wei (China Daily)
Updated: 2008-10-20 07:11

The World Trade Organization (WTO) will coordinate with member economies to avoid protectionism and help the global economy tide over the fast-expanding financial crisis, the global trade body's chief said Sunday.

f World Trade Organisation (WTO) director general French Pascal Lamy gestures during a press conference in Geneva, in this July 2008 file photo. The World Trade Organisation chief invited heads of development and commercial banks to a meeting in Geneva next month to discuss the impact of the economic crisis on trade finance. [Agencies]

"The primary role of the WTO at this moment is to serve as an insurance policy against protectionism; especially for developing countries, whose expansion relies very much on trade," Pascal Lamy, director-general of the WTO, told China Daily in an exclusive interview.

Admitting the financial crisis would inevitably hit international trading, he said global trade is being protected by commitments made by WTO members.

"We see the big difference between the financial system and the trade system worldwide, which is that in trade we have rules, we have commitments and we have regulations," he said.

He cited the Asian financial crisis in the late 1990s, during which no protectionist measure was enacted and Southeast Asian countries pulled themselves out of the mire mostly through international trade.

The WTO chief also urged countries to make sure the financial crisis does not hurt trade finance: Around 90 percent of the $14 trillion worth of trade is financed by trade credits. Trade finance is relatively unsophisticated, and deals are clearly and concretely collateralized with the cargoes.

The WTO created a taskforce last week to look into the effects of the financial crisis.

Lamy added the crisis' impact on the Doha Round of world trade negotiations "remains to be seen".

Trade ministers from over 30 major WTO members failed in July to narrow their differences on agriculture, trade and industrial market access, leading to a collapse of the talks.

Lamy said the impact of the financial crisis on the talks might be "minus" because people's minds are concentrated on financial areas rather than trade, but it might be "plus" because countries would have to make sure their insurance policy is good.