Examination of Witness (Questions 275-279)
Mr Fredrik Erixon
24 JUNE 2008
Q275 Chairman: Thank
you very much for coming. Could I ask what role do you think the
WTO has in the 21st Century and what should be its objectives
and functions? Do you see the need for any change in the decision-making
structures and dispute settlement? How do you feel about all that?
Mr Erixon: One can discuss this matter
in two ways. The first one is to discuss perhaps what would be
the ideal developments when it comes to the future of the WTO,
perhaps not ideal in the sense of entirely unrealistic. Another
issue is what is politically feasible given current constraints,
current views of the membership and many other factors that need
to be taken account of. I tend perhaps to be a little bit more
realistic, I hope, when it comes to my outlook on at least the
medium-term future of the World Trade Organisation. I think that
the basic role of the WTO in, let us say, the next 10 to 15 years
will be to try to maintain and ensure the integrity of its basic
trade rules. I do not think that the World Trade Organisation
will be a "world trade" Organisation, time is over for
this organisation, it is too difficult in order to achieve liberalisation
on a global stage like that. But that does not mean the organisation
does not have a role, it has an extremely important role when
it comes to maintaining the rules, making sure that these rules
are not being eroded in any way, upholding the integrity of the
dispute settlement system and, in addition to that, organising
its analytical work in the sense that it can scrutinise the trade
policies of its membership in a much better way than it can today
and that it can engage in analysis and discussion with the broader
community on the developments we are seeing outside the multilateral
track of trade negotiations.
Q276 Chairman: Fundamentally that
would turn it into a research organisation with the management
function of dispute resolution?
Mr Erixon: Just to maintain and negotiate
trade rules, that is going to take up a significant part of the
organisation as well. I do not envisage any broad changes when
it comes to the staff or the structure of the organisation to
enable it to do more analysis, it already has all the capacity
it needs in order to do this research and to publish the research.
They are already doing this research, the only problem is that
often they cannot publish it and cannot take part in the broader
discussion in a meaningful way.
Q277 Chairman: Because they are engaged
in negotiations?
Mr Erixon: No, because the membership
has constrained them when it comes to what they can publish and
what sort of discussion they can take part in. To give you an
example. The trade policy review mechanism was something that
started as something to build a review mechanism within GATT at
that point, but it became the WTO, something that would look like
the Australian Tariff Board in the 1980s. It was supposed to be
a mechanism with much greater clout, it would make its own decisions
when it comes to what issues they can look into, what sort of
analysis they can do and give them more independence and freedom
in trying to commission their own studies and go ahead, let us
say, co-operating with outside institutes when it comes to giving
views on individual Member States' trade policies. That idea did
not fly and what came out was the very weak trade policy review
mechanism that we see today. If you look at bilateral regional
trade policies, for example, they already have a division dealing
with these sorts of affairs. They already collect all the information
that is necessary in order to make judgments and do analysis of
the quality of individual agreements and the likelihood of the
agreement leading to substantial effects in one way or the other.
They have databases on all this, but they are not public and they
cannot really take part in a public discussion about all of this.
Q278 Lord Kerr of Kinlochard: If
the Doha Round failed or ran into the sand, what would happen
to the dispute settlement mechanism of the WTO?
Mr Erixon: I think one of the immediate
effects would be that a number of new disputes would be submitted
to the WTO. We would lose an opportunity to diplomatically solve
some of the disputes that are there but would be tremendously
difficult to solve by legal means. That would put a lot of strain
on the system. I am particularly referring to Boeing-Airbus, which
is going to be a tremendously difficult case. We have another
recent development when it comes to complaints from the United
States and Japan against the European Union on tariff reclassifications.
It is a very, very big issue and hides a number of very sensitive
issues which deal with interpretation of the extent to which agreements
cover products that have developed in the sense that they are
different products today than they were before and, of course,
this is more a matter of principle that does not only apply to
specific goods or this specific agreement, it applies to all sorts
of goods and agreements. These problems can only be solved by
negotiations and by improving the agreements. I think it would
be very difficult to solve them by legal means.
Q279 Lord Kerr of Kinlochard: Perhaps
if the Round had failed because of increasing protection in the
United States then there is the real risk that if the dispute
settlement works and produces an outcome that is politically unacceptable
in the United States, the credibility of the whole machinery may
be lost—
Mr Erixon: Yes.
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