Ad hoc meeting - The Financial Crisis and Trade


Date: 20/02/2009

Location: Brussels


The purpose of the meeting was to give, at the request of civil society, an overview of the impact of the financial crisis on trade and of its implications for EU trade policy.

LEAD PARTICIPANT: Mr Gaspar Frontini, Head of Unit, Chief Economist Unit, Directorate-General for Trade

Moderator: Ms Ramona Samson, Civil Society Dialogue Coordinator, Directorate-General for Trade

Agenda:

1.  Introduction by the Directorate-General for Trade

2.  Questions and answers

3.  Discussion

Link to official meeting agenda,

http://trade.ec.europa.eu/civilsoc/meetdetails.cfm?meet=11286

Link to official meeting notes (to become available around 1 March 2009),

http://trade.ec.europa.eu/doclib/cfm/doclib_section.cfm?sec=174&lev=2&order=date

Thomas Ruddy had not met Ms Ramona Samson, and had difficulty getting her to recognize his request to take the floor. Here are five questions he intended to ask Mr Frontini:

Personally I find the explanation of the financial crisis to be most pertinent which begins with the persistent trade imbalances between the US and China. These imbalances made themselves apparent in the balance of payments: What were the holders of current-account surpluses like the Chinese to do with their huge surplus other than to seek investment opportunities for their capital accounts? In this way they got involved in subprime mortgages and Credit Default Swaps.

As "The Economist" has warned in a recent cover story on protectionism, a Doha Deal like that which Pascal Lamy has tirelessly advocated would be an appropriate antidote. But would a Doha Deal be enough, researchers Mattoo and Subramanian ask in their recent article in "Foreign Affairs".[1]

Question 1:  In your PowerPoint (see official meeting notes) you referred to a "political process" in the G-20. Can you imagine how the G-20 might become more courageous than a WTO Ministerial Meeting and go beyond the Doha Agenda?

Question 2:  You referred to rescue packages as subsidies. Can you imagine the WTO taking on the job of subsidy coordination, which would—if institutionalized as in the EU — effectively revive the Singapore Issue "Competition"?

Question 3:  Keynes advocated the setting of incentives to remedy imbalances in trade accounts as part of the IMF's job. There was no GATT or WTO in Keynes' day. Could that job today be better coordinated with or at the WTO?

Question 4:  You referred to a need for additional financial regulation. Should a "Bretton Woods II" affect only the WB/IMF or the WTO too?

Question 5:  In Bali Pascal Lamy proposed linking trade policy with climate policy. In Copenhagen in December 2009 the next COP/MOP will meet to decide on an arrangement to replace the Kyoto Protocol. What is the EC doing with regard to the UNEP call for a Global Green Deal? Could not a new climate treaty serve as a massive investment programme to boost employment?

Surf back up to http://www.wsis.ethz.ch/seri.htm SERI member page Thomas Ruddy