Pascal Lamy, former Director-General of the WTO and President emeritus of the Jacques Delors Institute was the Keynote speaker at a conference organized on February 13, 2016 at the Istanbul Chamber of Industry.
Lamy started his speech by focusing on where the obstacles to trade lie. Five percent of trade costs are made up by tariffs, as measured by the average tariff rate. Ten percent of costs come from crossing borders, which the trade facilitation agreement is addressing. Another 20% of trade costs come from coping with the regulatory and standards systems. Aid for Trade should address these costs which are largely the “costs of compliance” for exporters in meeting with regulations and standards. He went on discussing what was aimed today in the new world of trade.
“The Transatlantic Trade and Investment Partnership (TTIP) is very different from traditional trade agreements. It aims to merge legislation and not simply harmonise customs duties. It is therefore much more complex.” He acknowledged in his speech that it would take a long time to accomplish the goals set in the TTIP once accepted. He pointed out that one should not forget that it took the European Union (EU) thirty years to reach 80% of its liberalization objectives for goods and 40% for services.
He continued by stating that .The new world trade order is about “precaution not protection”. In the old world of trade, policies were centered on protecting producers while today the obstacle to trade has moved toward protecting consumers. We see new standards and regulations aiming at protecting consumers’ health, their safety, workers’ rights, the environment and animal welfare. We talk today of providing consumers with various forms of protection. We talk about measures on maximum pesticide residues (MPRs), measures, standards that cannot be moved and which will allow all those abiding to these standards to enter the developped economies’ markets
Lamy stated that 80% of the negotiations on the TTIP deal with harmonisation of consumer protection standards, while only 20% focus on such typical trade issues as tariffs and market access.TTIP seeks to go beyond traditional trade deals by creating a genuine transatlantic single market. If successful, TTIP would cover more than 40% of global GDP and account for large shares of world trade and foreign direct investment.
But the road ahead is still paved with hurdles. Political leaders’ failure to explain the aims of the TTIP, the lack of transparency in the talks have allowed anti-TTIP movements to grow. He advised leaders to spell out the intent of the ambitious plan to create the world’s largest free-trade zone, covering a market of 850 million consumers. He agreed that several issues appear to be more difficult to resolve because of cultural differences between the US and Europe, such as genetically modified organisms in food and other products, and the protection of private data. He finally stated that one should not expect anything final before spring 2019.
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