Trade Is The Key to Unlock Development

"Overall, the WTO system of disciplines has worked. The. insurance policy against protectionism has worked," Lamy said.
But when asked about manipulated exchange rates, the WTO chief delegated that responsibility to the International Monetary Fund while questioning the real effects of such a policy on trade. "The fundamental reality is whether currency movements impact trade flows. The answer to that is not clear," Lamy noted.

The director general was, however, clearer about the impact of decreased trade finance during the crisis. "Finance for trade dried up at the beginning of the process because of lack of liquidity. this was addressed by the [injection of] liquidity that the London G20 summit last year provided, " Lamy said. He also praised the role of other international financial institutions in ensuring sufficient liquidity and supported their calls for larger contributions from their member-states. "We've been helped a lot by the regional development banks like World Bank and the IFC [International Finance Corporation].  This is why I and the WTO support the increase of their capital base, because they have done their job during the crisis," Lamy added.

As for promoting economic development, the director-general lauded the so-called Geneva consensus, which argues against economic liberalization as a panacea. Development will follow trade if appropriate domestic policies are in place. He also called for public finance and regional development banks to take the place of bond markets, at least temporarily.

Lamy believes the Doha Round of global trade negotiations could yet conclude successfully if there "is a sense that negotiators are entering the end game." The formation of the G20 makes that development more likely, he added, since the group's establishment could facilitate approval for any trade agreement in the legislatures of its member-states.