WTO chief trying to avert crisis

The World Trade Organization (WTO) will coordinate¹ 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 yesterday.

"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 inevitably² 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 enacted³ and Southeast Asian countries pulled themselves out of the mire⁴ 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 relatively⁵ unsophisticated, and deals are clearly and concretely collateralized with cargoes⁶.

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 negotiations⁷ "remains⁸ 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 collapse⁹ 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.