WTO action in response to the financial and economic crisis

1. WTO action in response to the financial and economic crisis Keynote by Juan A. MarchettiCounsellor, Trade in Services Division, WTO International Workshop"The International Economic and Financial Crisis: What Role for the WTO?"Leuven, Wednesday 3 March 2010

2. Outline • Overview of monitoring and surveillance at the WTO • Monitoring the trade effects of the financial and economic crisis • What next?

3. Overview of monitoring and surveillance at the WTO • Types of Monitoring and Surveillance • Passive • Providing data (e.g. publishing trade measures, notifications) • Collecting data (e.g., tariff data in the Integrated Database) • Active – Processing data and using it to measure or to analyze an issue or problem • Compliance with WTO obligations • Impact on trade and the trading system

4. Overview of monitoring and surveillance at the WTO • Legal basis • Article III(i) of the Marrakesh Agreement • Features • Transparency – No shortage of mandates • Notifications • For general transparency purposes – record rather poor and has deteriorated • For specific benefits – record is better but still not perfect (e.g. TRIMs) • Best records in TBT and SPS despite complexity and breadth of obligations – Why?

5. Overview of monitoring and surveillance at the WTO • Poor notification record • Is it due to deliberate evasiveness, bureaucratic inertia or lack of capacity? • Is it related to the seemingly unclear purpose of the exercise – How closely is the data related to an active consultation or negotiation?

6. Overview of monitoring and surveillance at the WTO • Notification process – How can it be improved? • Recent call by the GC Chair to improve the notification process in each Committee • General consultation process fallen into disuse – most of the energy goes to negotiation and dispute settlement • Members focus on their individual trade interests

7. Overview of monitoring and surveillance at the WTO • Trade Policy Review Mechanism • Already 20 years of age • Strong platform for improving transparency at domestic and multilateral levels • Secretariat-driven part of the process works well and continues to evolve • Weaknesses • Member-driven part works rather poorly • Review cycle is long for most Members • Limited focus (e.g. on services)

8. Monitoring the trade effects of the financial and economic crisis • DG-driven • Grew out of Secretariat task force on the crisis set up by the DG in October 2008 • Reporting every three months • TPR – Annual Overview of Developments in the International Trading Environment • Focus on the impact on the MTS • Annual report by DG on significant policy issues • Context • G20 commitment not to resort to protectionism • G153 commitment?

9. Monitoring the trade effects of the financial and economic crisis • Methodology • Collect trade policy data and request Members to verify it • Analyze impact of (protectionist) trade measures on trade and on the trading system • Avoid finger-pointing • Publish the results

10. Monitoring the trade effects of the financial and economic crisis • Achievements • Monitoring the trade effects of the financial and economic crisis • “Peer pressure” against protectionism • Only reporting based on a broad definition of “trade” (i.e. going beyond trade in goods) • Trade in financial services (thus, the focus on financial bailouts) • Movement of natural persons as supplier of services • Identify gaps in WTO rules

11. What next? • How to get WTO Members' support to continue this monitoring and surveillance exercise once the crisis is past? • Who is looking more broadly (i.e. beyond individual Members’ trade interests) at how the MTS is operating? • How “active” can active monitoring become? • Role and size of the Secretariat? • Any other idea?