WTO director says more trade can help ease financial crisis
Pascal Lamy, director-general of the World Trade Organization, spoke Monday, Oct. 27, at Stanford.
BY ADAM GORLICK
The head of the World Trade Organization (WTO) said expanding import and export opportunities is essential to ease the global financial crisis, and warned that curbing free trade could increase economic instability.
"There are a few things we can do in this big tsunami which obviously involved a number of human forces," said Pascal Lamy, the organization's director general. "And trade is one among them."
While he said there hasn't been an international push to restrict trade by tacking more tariffs on imported goods and setting trade quotas, he acknowledged that "the risk is there."
But shrinking trade, he said, could lead to a worldwide recession.
"I think that's a scenario which we need to have in mind," he said, adding that strong trade agreements helped avoid a global recession following the 1997 Asian economic collapse.
"Keeping trade open is one of the major prescriptions of the present situation," he said. Lamy, who was hosted on campus Monday by the Stanford Center for International Development and the Stanford Institute for Economic Policy Research, said the current crisis sparked by America's mortgage meltdown was worsened by a lack of international financial oversight.
"My own take is that the West and others were not constrained into any sort of global regulation," he said. "The overall stance is that there was no agreement. There was no political will to regulate global finance."
He also stressed the need to complete the Doha Development Round of WTO-sponsored talks, which have stalled over issues including agriculture subsidies and trade tariffs. The talks opened seven years ago with the aim of increasing global trade and promoting economic development in poor countries.
Lamy said those talks may resume later this year or sometime next spring.
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