The Trans-Atlantic Trade and Investment Partnership, or TTIP, continues to divide Europeans and a decision is not expected before 2016. Robert Azevêdo, director general of the World Trade Organization, said the advantages of free trade outweigh the problems. In an interview with German business weekly WirtschaftsWoche, he called for involvement of the WTO in negotiations, explained why transparency can be an obstacle and defended the Doha development round.
Recently, a quarter-million people demonstrated in Berlin against the Transatlantic Trade and Investment Partnership (TTIP). Are you concerned Germany views free trade with so much suspicion?
Mr. Azevêdo: Germans ought to be concerned that they are the ones who are so suspicious of free trade. Germany, in particular, benefits greatly from international trade. If the rest of the world closed its borders to German exports, it would greatly impair industry, employment and the entire level of prosperity. Try as I might, I can’t imagine a world in which Germany is not a great trading nation.
Can you relate at all to reservations about free trade?
In a truly open economy, the advantages of free trade always add up to being greater than the disadvantages.
The Doha negotiations for liberalizing world trade have dragged on since 2001. Do bilateral projects such as TTIP, or the recent agreement between the U.S. and Pacific countries, block progress at the WTO?
The problem is not that negotiations take place outside the WTO, but that they don’t also occur within the WTO. The usefulness of a common WTO agreement is much greater than if it is only individual, like-minded countries coming together.
In December, a round of ministerial level discussions will take place at the WTO for the first time in two years. Wouldn’t it be more honest to give the Doha Development Round a decent burial because of its lack of progress?
I believe there is a consensus that the issues of the Doha Round should remain on the table. WTO member states must engage in serious discussion about how these issues can be worked out. For example, everyone is disturbed by the distortions created by agricultural subsidies, but each party proposes a different solution. The red lines don’t overlap.
One criticism of the TTIP is a lack of transparency. Do you feel a similar pressure on the WTO to grant more public access to negotiations?
No. We try to be as transparent as possible, but individual governments decide how much they reveal their positions to their citizens. Sometimes transparency helps create more support among citizens, but during tough negotiations, transparency can be an obstacle.
The problem is that in complicated negotiations, one doesn't always actually want to attain what is being proposed.
What do you mean exactly?
If a head negotiator proceeds too transparently, they lose influence. The problem is that in complicated negotiations, one doesn’t always actually want to attain what is being proposed. If such an offer becomes public, it can lead to disappointment among citizens.
Can an institution such as the WTO survive in the long run when there are no major agreements for years?
We can point to some significant achievements. In 2013 on Bali, there was a huge deal to reduce customs bureaucracy. In December in Nairobi, we may well reach agreement in the areas of development and agriculture at the first WTO ministerial level conference in Africa. With the Information Technology Agreement (ITA), there is a fundamental consensus that customs duties should be eliminated for 200 electronics products. Additionally, we hope to make progress on environmental products such as wind turbines and solar panels – that would be a pioneering agreement. We would send a clear signal the WTO still works to prevent protectionism.
But there have been plenty of examples of protectionism in recent years. Porsche, for example, had to buy Argentinian wine in order to be allowed to export to that country.
In 2008, when the global financial crisis occurred, many expected protectionism would return in a major way. That didn’t happen because member states knew that such measures would be challenged at the WTO.
At the same time, world trade continues to stagnate. The WTO just reduced the forecast for 2015 by 2.8 percent.
Yes. We are emerging from the crisis very slowly. During the last two years, world trade has remained below our forecasts. Trade policy could play an important role in stimulating the economy. Trade can provide crucial support to growth.
This article originally appeared in WirtschaftsWoche. To contact the author: firstname.lastname@example.org.