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Last Updated: Wednesday, 17 November, 2004, 17:41 GMT
Lamy bids farewell with call for trade reform
By Manuela Saragosa
BBC Europe business reporter in Brussels

The outgoing European Trade Commissioner Pascal Lamy has called for environmental and social organisations to play a greater role in governing the expansion of global trade.

European Trade Commissioner Pascal Lamy
Mr Lamy hopes the future will bring changes to the world trade system.
Speaking to the BBC ahead of his expected departure from office on Friday, Mr Lamy said responsibility for the governance of international trade should not be concentrated solely in the hands of the World Trade Organisation (WTO).

"I think other organisations like the World Health Organisation, the International Labour Organisation or environmental organisations worldwide should be stronger, so that we don't create an impression that because the WTO system is strong, trade rules trump environment, or health or basic social standards," Mr Lamy said.

The more that perception remains, the more difficult it would be for trade policy makers to campaign for open markets, he added.

"I think we have to be able to make the case that trade expansion, which is good overall, is not done to the detriment of these sorts of values which people care about," he said.

Trade disputes

On Friday, the new commission of President Jose Manuel Barroso is due to take over, bringing an end to Mr Lamy's five years in office.

During that time, he has often had to juggle those very values with the drive to free up world trade.

I don't think there is any reason for major changes in EU trade policy vis-a-vis the US or in US trade policy vis-a-vis Europe
Outgoing EU trade commissioner Pascal Lamy

For example, he has argued with the US about Europe's refusal to accept imports of genetically modified foods.

More recently, he made a fresh attempt to end the economic sanctions imposed on EU exports by the US and Canada in a long-running dispute over beef fed with hormones.

Farm support

Mr Lamy has also been severely criticised for not pushing for more radical reform of Europe's farm sector which leaves many developing countries unable to compete in the EU.

The matter has been one of the biggest stumbling blocks in the efforts to free up world trade.

"For environmental reasons, for landscape preservation, we need to support small farming," Mr Lamy said, insisting that there is a consensus for that.

"What we have started to do is to support less big farming and more small farming.

"Many developing countries, whose economies rely a lot on small farming, have some understanding for that."

Responsive rules

Putting the environment and health ahead of trade is not completely new to Mr Lamy.

US Trade Representative Robert Zoellick
Mr Zoellick is a personal friend of Mr Lamy

Earlier this year, he tabled the idea of "collective preferences", a way of getting a country's trade policies to reflect social or cultural values.

He proposed that WTO members should be allowed to ban imports from countries with "collective preferences" different from their own.

That, the argument went, would make WTO rules more responsive to social values and therefore avoid disputes arising.

But the idea has not proved popular.

It was not clear how those "collective preferences" were to be determined. Critics also said they could easily be used to mask protectionist policies.

Open trade

Clearly, though, Mr Lamy wants to see changes take place to the world trade system.

European Trade Commissioner Pascal Lamy
Mr Lamy: "Trade sanctions are not the most obvious way to open trade"

He described the WTO's dispute settlement procedure as "medieval".

"The fact that the trade settlement efficiency relies on trade sanctions can be questionable," he said. "Trade sanctions are not the most obvious way to open trade."

Sanctions have often been used in transatlantic trade disputes.

The United States and the European Union have argued over a wide range of issues including steel, export subsidies, bananas and the aerospace industry.

But Mr Lamy insisted trade relations between the two were "fine".

More than US$2bn (1.08bn; 1.54bn euros) worth of goods and services is exchanged daily between the two sides.

"We have here a huge healthy forest," Mr Lamy said. "Here and there we have problems with a few trees, but what counts for business, for jobs, for employment and for growth is the forest."

Trust

Many economists believe relations between the two could be worse, but have been prevented from being so because Mr Lamy and his US counterpart, Robert Zoellick, share the same goals and commitments to free trade.

Peter Mandelson, European Commissioner for Trade
Will Mr Mandelson manage to build strong transatlantic trade ties?
They are also personal friends.

The question is whether Mr Lamy's departure will make transatlantic trade ties more difficult.

The British politician Peter Mandelson is due to take over from Mr Lamy next week.

"The personal co-efficient exists," Mr Lamy said. "At the end of the day, it's a matter of trust.

"This trust relationship was there between Bob Zoellick and myself, but it's the political mandate which we have on both sides which counts the most.

"And if you look at that I don't think there is any reason for major changes in EU trade policy vis-a-vis the US or in US trade policy vis-a-vis Europe."


SEE ALSO:
Mandelson calls on EU to reform
08 Nov 04 |  Business
Lamy tidies before his departure
25 Oct 04 |  Business


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