Regulatory intelligence for US exporters
NOTE: The following report appears in both International Trade Today and Export Compliance Daily.

WTO Director General Candidate Says Negotiating Needs to Return

One of the nominees for director general of the World Trade Organization, Hamid Mamdouh, told the Washington International Trade Association that the failings of the appellate body are because the WTO has abandoned negotiations. This is the same view held by the U.S., which has brought the issue to a head by killing the appellate body. Mamdouh, a senior counsel at King & Spalding, was speaking during a WITA webinar June 23.

Mamdouh said the current crisis is a result of “a negotiating function that underperformed” and “a dispute settlement system that went on steroids.” He said countries need “to be a bit unsentimental about defining the problems,” and said the WTO of the future “could look a bit different from this WTO.”

But, given the political imperatives of different countries, Mamdouh said negotiators in Geneva should not jump straight into trying to solve the problem of the appellate body, or the fact that so many large economies still receive special and differential treatment, or industrial subsidies. He said that countries should start with their common purpose -- which, presumably, is increasing trade.

“Do we need a WTO? Because if we don’t, then the conversation has nowhere to go,” he said. “This is about honoring the contract. And if the contract is not working, then we need to change the contract.” He said that having a WTO is not an objective, by itself. “Even trade is not an objective of itself,” he said.

Retired trade lawyer Terry Stewart asked Mamdouh about the idea of changing countries' bound rates, since countries like India have little incentive to lower their tariffs to get access to developed countries' markets, since those countries already have low tariffs. “We need to provide those countries with incentives. Maybe there are other things they would want, and we bring those to the table,” Mamdouh said. “Remember the Uruguay Round, it was agriculture and textiles in exchange for services and [Trade-Related Aspects of Intellectual Property Rights (TRIPS)].”

Mamdouh said the Doha Round failed because countries fixated on agriculture to the exclusion of other important issues. He said more of the world's economy is in services than in goods, and so countries should remember that when they're working on liberalization.