Next WTO chief sees decline in world trade

By Our Special Correspondent.

HYDERABAD, JAN. 10. Mr. Supachai Panitchpakdi, Deputy Prime Minister of Thailand, who will take over as Director-General of the World Trade Organisation in two months, has said that the outlook for world trade next year is bleak due to the slowdown of the U.S. economy, upswing in oil prices and the problems in the Japanese economy.

Addressing a press conference, Mr. Panitchpakdi, who was here to attend the Partnership Summit, organised by the Government of Andhra Pradesh and the Confederation of Indian Industry, said the mandate of the WTO was ``to further world trade, not development''. He was still searching for a venue for the next meeting of the WTO, and preferred to hold it in a developing country. The meeting should have a fixed agenda and no open-ended discussion to prevent recurrence of incidents that took place in the earlier round in Seattle.

Mr. Panitchpakdi said the slowdown in the U.S. economy would be deeper than expected, with less than two per cent growth. Some institutions were talking of a recession. This will have an impact on the economies of Taiwan, Korea and the Philippines which have strong trade ties with the U.S., though the impact on India may be marginal.

Asked whether, during his tenure, he would change the direction of the WTO in the light of the criticism of its functioning by leaders like the U.S. President, Mr. Bill Clinton, to economists in developing countries, Mr. Panitchpakdi said Mr. Clinton's criticism related to issues like child labour and human rights which were not really trade-related issues. But he agreed with the U.S. President's criticism that the discussions in the WTO should be transparent.

He said that oil prices were quite unrealistic, with the upswing being of the order of $ 10 per barrel. We also have to take note of the uncertain political climate in Japan where the growth in its economy will be kept to the minimum.

``We prefer to have a ministerial meeting, and if nothing is available, probably we may have to go to Geneva. If we want to have a global image for the WTO, probably some location in one of the developing countries might have been preferable. It would have helped us to redirect the contents of the new round of the WTO,'' he said.

He said that he would like the developing countries improve their prospects by ``capacity building'', with legal assistance provided to them.

Asked what conditions India would have to fulfill to join the ASEAN, Mr. Panitchpakdi said that India could have a regular meeting of its Finance and Foreign Ministers with those of Thailand and Myanmar, as the three countries form a corridor, and institutionalise the meeting to begin with. He noted that there were no banking relations between Thailand and India, and even banking correspondents do not exist to deal with financial institutions between the two countries.

Mr. Panitchpakdi will meet the present incumbent in the WTO, Mr. Mike Moore, here tomorrow before returning to Thailand.

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