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ECONOMICS > WTO at crossroads, US warns

WASHINGTON - Reuters

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WTO Director General Pascal Lamy. EPA photo

WTO Director General Pascal Lamy. EPA photo

A top U.S. trade official has warned that the World Trade Organization faced an uncertain future as a negotiating forum failed efforts to reach a world trade deal, and urged support for a proposed International Services Agreement.

“Quite frankly, the WTO as an institution is at a crossroads,” U.S. Ambassador to the WTO Michael Punke told a congressional committee. “Our view is the WTO can’t fix its problems without first acknowledging them.” Punke said the WTO took a positive step last December, when members finally agreed that world trade talks were at an impasse after a decade of fighting over how much various WTO members should cut farm subsidies and tariffs.

But even as that meeting was ending, a number of countries “were gnashing their teeth about a possible [multi-country] pact known as the International Services Agreement that somehow was going to bring down the system,” Punke said.

That debate has continued, with the United States, the European Union, Japan, South Korea, Canada, Mexico, Turkey and 13 other developed and developing countries moving toward the launch of services trade talks over the objections of big emerging economies like China, Brazil and India. The 20 WTO members now mulling the services talks will meet again in Geneva in early October and plan additional meetings in November and December, he said.

Punke said the proposed International Services Agreement would build on more than 100 bilateral and regional services agreements that have been negotiated in the past 18 years. U.S. services firms such as Citibank, UPS and Verizon strongly support the pact, which could tackle difficult issues such as government restrictions on the cross-border data flows over the Internet. The U.S. services sector accounts for nearly 80 percent of U.S. economic output, and includes everything from banking to express delivery to telecommunication.

September/22/2012

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