WTO Director-general Warns on Global Trading

Mike Moore, director-general of the World Trade Organisation, on Friday warned that the proliferation of regional trade agreements posed a "systemic risk" to the global trading system which would be gravely aggravated by failure of ministers in Doha to launch broad-based trade negotiations.

In his annual overview of developments Mr Moore said the 170 regional trade agreements (RTAs) now in force already accounted for 43 per cent of world trade. By 2005 that number could rise to 250, raising RTAs' share of world trade to more than half.

The risk lay less with the trade effects of individual RTAs as in "the collective impact of a large number of RTAs, each with its own special mini-trade regime, on the functioning of the rules-based multilateral trading system".

Increasingly, RTAs were developing their own rules to cover gaps or deficiencies in WTO disciplines in areas such as investment and competition policy, intellectual property rights and standards. This a la carte approach was not only a recipe for confusion but could make negotiating future multilateral rules more difficult, Mr Moore said.

He warned of "regulatory gridlock" if WTO members failed to move forward on rule-making as well as trade liberalisation, further weakening the multilateral system. Developing countries - which have been the biggest opponents of extending WTO disciplines into new areas - would be the main losers from a shift away from multilateralism to regionalism, Mr Moore said.

Echoing US and European Union officials, the WTO chief said new trade negotiations were also needed to build confidence in the world economy and contribute to recovery and growth. World trade in goods is expected to increase by under 2 per cent this year compared with an impressive 12 per cent in 2000.

The report noted that despite eight trade liberalisation rounds over the past 50 years significant trade barriers remain to be dismantled, particularly in the areas of agriculture and textiles which are especially important to poorer nations.

Mr Moore also drew attention to the rising trend in the use of trade remedies such as anti-dumping, especially by developing countries which now account for over half all investigations.

Though the total of new investigations fell last year to 272 from a peak of 356 in 1999, the trend is upward, the report said.

The US is the biggest user of anti-dumping measures but is increasingly a target of measures by others - fourth since 1995 after the EU, China and South Korea. Though domestic lobbies in the US have pushed the US government to oppose talks on stricter anti-dumping rules urged by Japan and developing countries, major US exporters have said they would benefit from tighter disciplines.