WTO Chief Slams Nations Signing Bilateral Trade Deals

by Ulrika Lomas, Tax-News.com, Brussels

26 January 2004

As the WTO attempts to get negotiations for a global trade settlement back on track, the head of the Swiss-based organisation, Supachai Panitchpakdi has attacked the tendency of member nations to sign bilateral agreements “willy nilly,” arguing that the pacts could have a potentially destabilising effect on world trade.

At present there are almost 300 bilateral and multilateral agreements in place around the world, with a further 100 or so under negotiation, according to the Wall Street Journal. Opponents of these piecemeal agreements argue that their existence makes the WTO’s efforts for a global deal that much harder.

They also point out that it can potentially distort trade flows by diverting investment away from nations that are not part of bilateral or regional agreements.

"Nobody knows the real effect. (Politicians) just like to go and sign them," remarked Panitchpakdi, adding that he has seen a “bandwagon” effect taking place amongst nations anxious to sign individual agreements.

"We aren't against this, but we would like to see the process being an ordinary one, a disciplined one in which the world can make use of this as building blocks - not stumbling blocks - for multilateralism," he explained.

The WTO director general spoke as the Swiss President, Joseph Deiss, who serves in the dual capacity of economics minister, called on ministers of national governments to meet on the sidelines of a WTO forum last Friday, in a bid to get the stalled trade talks back on track.

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