Examination of Witnesses (Questions 140-146)
Mr Paolo Garzotti, Mr Edouard Bourcieu and Mr Jean
Charles Van Eeckhaute
23 JUNE 2008
Q140 Lord Maclennan of Rogart: This
is on the multilateral trade agreement. Can you really say that
the progress which has been made by India, for example, which
was one of the countries you mentioned, which has liberalised
quite considerably this year, is due to a multilateral trade agreement?
What is the nexus between WTO and the movement of these countries?
So many of their movements seem to have been ex proprio motu.
Mr Garzotti: It very much depends on
which country you are looking at. If you are looking at China
surely the need and will of the Chinese Government to get into
the WTO was an important factor in the liberalisation of the Chinese
economy and the lowering of tariffs and liberalisation of the
services market. I would say very little on India for the simple
fact that India did not undergo the pressure of a WTO accession,
it was a founding member of the GATT. The GATT was the first agreement
that India signed as an independent country. The liberalisation
that India has experienced during the last ten years has been
mainly unilateral. I would say that generally liberalisation,
on which Edouard will have better data than I have, is mainly
due to unilateral movement in the countries deciding internally
to do so and then negotiating these margins of manoeuvre that
they created themselves in the WTO.
Q141 Lord Maclennan of Rogart: If
that is so, what can WTO trumpet as its achievement in this multilateral
field with developing countries?
Mr Garzotti: When you liberalise, and
you need to consider history, liberalisation is not a one-way
street. You can liberalise and, due to any change in the economic
situation, being forced politically or by pressure in your constituency
to work back. Surely with the WTO at this level of very high liberalisation
generally in the world, particularly a Doha deal, a ratchet, that
would be an important point of insurance so that the liberalisation
we have achieved until now, and these emerging economies have
achieved, is set and bound in the WTO. In my view, it is important
that with the difficulties with the oil price and so on you can
see calls for more protectionism in the world coming, not just
in emerging economies but in the United States and Europe as well
to make sure the level of liberalisation we have now is safeguarded
and to consider it as key and binding will be important. Even
if the new DDA deal did not necessarily break new ground, but
broke some new ground in terms of market access in these emerging
economies, even if there is not a dramatic improvement in market
access, binding the access to these markets as far as goods are
concerned, and even more for services because a lot of investment
decisions are related to having a consolidated and safe investment
environment which is very good for market access in services,
would be very positive for the global economy. The fact that we
are not breaking new ground and, to a certain extent, the fact
that India has lowered its tariff to more or less ten per cent
in the last ten years, they have done their homework and now have
to bind it in the WTO, that is fine, if the level of liberalisation
is acceptable we can live with that.
Q142 Lord Kerr of Kinlochard: I just
wonder if we have all made a tactical mistake with the Singapore
issues. The doctrine of a big Round is that everybody gets a prize
at the end and everybody is prepared to bear some pain at the
end. The developed world, OECD, took a lot of demands off the
table at Singapore. Was that an error?
Mr Garzotti: Here, again, I cannot say
it was an error or was not an error. It is true that if we see
what we got in exchange for dropping the Singapore issues in Cancun,
it is hard to see a direct gain in the negotiations. I think that
is factually right.
Q143 Lord Kerr of Kinlochard: I am
not a mercantilist, I do not believe in zero-sum games.
Mr Van Eeckhaute: We did not view the
Singapore issues as necessarily one area where one could follow
a mercantilist approach but more as a systemic area where everybody
would see the interest of adopting certain rules. .We saw this
happening in the Uruguay Round. It is very difficult to exchange,
for example, the lowering of a tariff with the removal of a barrier
against investments. We did not see the Singapore issues as something
for which a price had to be paid.
Q144 Lord Kerr of Kinlochard: I wonder
if we were wrong.
Mr Van Eeckhaute: The question is whether
you see the WTO as a place where you do everything on the basis
of an exchange rate or where you can also negotiate on the basis
of a well-understood self-interest.
Mr Garzotti: One of the problems with
the Singapore issues which I believe were good subjects to go
into with the WTO was that there was not a constituency, unfortunately.
There were not just developing members who were saying, "This
is too difficult, too demanding and a ghost of the MAI in the
OECD" and so on. I must confess that in Europe we would have
expected or wished to have more support from our constituencies
for those negotiating areas. It is a pity, but there were not
many people ready to take that on board. That was mainly the developing
countries who refused to negotiate on that and we dropped those
issues, we were the demander. The only Singapore issue that remains
on the agenda, trade facilitation, is the one where the collaboration
with developing countries is working better and probably the most
advanced and less problematic area of the negotiation. We found
a very interesting way of co-ordinating negotiations, new rules,
and special and differential treatment for developing countries
where new rules and the capacity of developing countries to implement
them are linked in a very inventive manner, in my view, that could
be a good lesson for rules-making in the future.
Q145 Chairman: I have got one last
quick question. The Commission is in the middle of negotiating
a lot of bilateral trade agreements. What are the EU's trade objectives
in the context of these bilateral agreements and could you comment
in particular on services?
Mr Garzotti: We have several negotiations
going on on bilateral trade agreements and not all of these negotiations
have the same objectives. I am thinking about negotiations that
we started on the basis of the Global Europe communication,
so with South Korea, the ASEAN group and India. Those are negotiations
in particularly India and Korea where we want to address the improvement
of competitiveness that we need. We are trying to access those
markets that are growing fast in the world where there are still
considerably high barriers to those markets and where we have
an interest. This is not the same as the bilateral negotiations
that we are pursuing, and some have been concluded already, with
Africa, Caribbean and Pacific countries which have a purely developmental
function. Other negotiations that have this ideal are those with
Central America, for example. Negotiations where we are more interested
in accessing these markets is the Gulf Corporation Council. On
services, as far as GATT services our objective is to try to gain
market access in these countries and bilateral deals can be easier
to get concessions in because the concessions will be done vis-a"-vis
the EU. There are some partners who may be more worried about
other Member States of the WTO and, therefore, will be more worried
about opening the markets in a multilateral way whereas they would
be more open to do so at a bilateral level. This has limits as
well. My personal view is that most of the difficulties that everybody
finds in multilateral negotiations are then found in bilateral
negotiations as well and, on top of that, you do not have the
same pressure you have in multilateral negotiations because the
prize is less interesting because you have access just to a regional
based market and not to the multilateral form. We do not want
to be dogmatic about it so we have been launching negotiations
and we hope on services that will deliver more for our economy,
but we maintain the multilateral avenue is the most important
and privileged one.
Q146 Chairman: I think that does
answer my question. It has been very good of you to come.
Mr Garzotti: Thank you for your questions.
Chairman: Thank you very much, it has been most
illuminating. We look forward to seeing your trade and development
colleagues.
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