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Economic crisis far from over

By myjoyonline
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According to Pascal Lamy, Director-General of the World Trade Organisation, the global economic downturn is far from over, and that very few countries have dismantled the dangerous protectionist barriers which they imposed as a response to it.

In his remarks to WTO's 153 members, Lamy said that import penalties and other border restrictions are closing off markets and causing more difficulty in a time of depressed demand.

“There is no indication of governments generally unwinding or removing trade-restricting and distorting measures that they imposed early on in the crisis,” he said.

While he was saying there was no “outbreak of high-intensity protectionism” to date, Lamy also raised the possibility of an amplification of trade disputes, retaliatory restrictions and sanctions, if unfair barriers are kept in place.

The WTO is analyzing economic stimulus measures which was to support Banks, Insurers, Carmakers and other key sectors in developed markets, where the credit crisis began.

He said, “It has not been possible to tell whether the subsidies and bailouts have violated any international laws, which lead to the crowding out of competition.

This continues to be a particularly challenging part of the exercise because of the difficulties of collecting hard data in these areas. Without the data, it is almost impossible to asses their impact on trade flows.”

Lamy, who attended the G8 summit in Italy, where World Leaders promised to work to conclude a new Global Free Trade Pact in 2010, told WTO Members on Monday, that it was too early to count on any economic recovery. “I would caution against excessive optimism,” he said.

"Although financial markets are showing signs of stabilization, the crisis is far from over, particularly in many developing countries, where they are now starting to feel its full force on their trade and economic growth."

Trade diplomats are due to meet on Monday afternoon at the WTO's headquarters, which is on the shores of Lake Geneva, for the first Round of the Doha Session.

Negotiators are expected to set a packed meeting schedule for the preceding months, which is in line with the Italy agreement for the purpose of speeding up the talks, which have been going on since 2001, and also to arrange meetings between Trade Ministers.

The communiqué from the Group of Eight wealthy nations, plus China, India, Brazil, South Africa and Mexico raised the hopes that countries, who had previously squared off in Geneva would be willing to lose enough to make consensus possible.

Two signatories, India and the United States had caused the last major WTO policy to fail, when they locked horns about how poor-Country farmers would be treated in the Doha Agreement, which would open up Global food, goods and services markets. Both countries have had a change of Governments since then, but neither has spelled out any change in policies.

Lamy has revealed that a Global Trade deal would give the world economy an amount of $130 billion annually.WTO accords like the Uruguay Round and the Doha Round requires full consensus in all areas, in order for it to be clinched.

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