Citing India and other emerging economies as success stories in attracting investments and achieving rapid industrialisation through liberal policies, WTO Chief Pascal Lamy has asked major economic powers to use the Doha Round to boost confidence of world business.
"At a time when clouds are darkening over the world economy, the Doha Round is the one global initiative that may boost confidence of world businesses, workers and consumers," Lamy said in his lecture on Global Economic Governance.
He said the open policies have considerably changed the face of emerging economies, which need capital for growth and development programmes.
"China, India, Mexico, Korea, Thailand, Indonesia, Argentina, South Africa and Chile... have done extremely well in a range of manufacturing sectors. Trade is one important factor for their rapid industrialisation," Lamy said in the lecture posted on the WTO website.
The Indian economy has grown by an average of 8.5 per cent for the past four years on the back of double digit growth in industrial production and a sharp rise in international trade, which is likely to touch 400 billion dollars this fiscal. He said the developing countries need capital, which they can attract as foreign investment, borrow or import through international trade.
"The safest, cheapest and most sustainable way is to import it," the WTO chief said.
Lamy said countries like India, China and Mexico have used the WTO as an anchor for their integration in the international division of labour.
However, many of these countries also need to tackle supply-side bottlenecks, which limit their ability to effectively respond to international demand, Lamy said. "Lack of efficient logistics, poor public infrastructure and inefficient customs procedures hinder their competitiveness."
Insufficient capacity to match public or private sanitary or phyto-sanitary standards or safety requirements can often limit export potential. Lamy has made several efforts with the help of key WTO members like India, Brazil, EU and the US to take the world trade talks out of troubled waters of farm subsidy and industrial tariff.
He said since 1950, world trade has grown more than 20 fold and has expanded three times faster than the world output growth. International trade has been a great stabiliser for many countries, contributing to economic expansion even at times of slackening domestic demand.
Alluding to the loss of jobs in the developed countries, the WTO chief said there was general agreement among economists that it was not trade but productivity enhancements, arising from technology improvements, that were primarily responsible for the loss of manufacturing jobs. The opening of services markets to foreign providers has facilitated the movement of ideas and persons enabling students to gain an education abroad, while making travel safer and more affordable.
"Medical diagnoses can now be made online by competent doctors in developing countries. For consumers, this new range of options has been of tremendous benefits," he said. However, the downside is that it has raised concerns among blue and white-collar workers in developed countries who worry that technology has exposed entire new sectors of the economy to world competition, Lamy said.
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