Time:2014/2/26 

On February 20, 2014, former World Trade Organization (WTO) Director-General Mr. Pascal Lamy visited the School of International Studies (SIS), Peking University, and met with faculty members and students from the school. The meeting was hosted by the Dean of the IISS and SIS faculty member, Prof. Wang Jisi, and was attended by Prof. Wang Yong, Prof. Zhang Haibin, Associate Prof. Yu Wanli, Associate Prof. Chen Shaofeng and Associate Prof. Wang Dong. 

Mr. Lamy first introduced his new book The Geneva Consensus: Making Trade Work for All, which illustrates the diversity and globality in managing the world system from the aspects of world trade and global governance. According to Mr. Lamy, the most crucial factor of the international system today, which inherited the nation-state system in 1648, is still sovereignty. All governments primarily serve the national interest of their own countries. Building up the international system through treaties and international organizations only started in the 1860s. Nation-states are still the main actors of international affairs, and they remain more effective and central than international organizations. 

Mr. Lamy says world trade, compared with immigration, finance and other global phenomena, is the most powerful, complete and complicated one. The WTO produces yearly reports that are much more extensive than those of global organizations in other fields. Existing alongside a single-power-driven international system, the WTO has been supported in regards to its supranational and regulative rules by the strength of the United States in trade. It is also more powerful than common international organizations in arbitrating disputes and motivating individual countries, which makes it meaningful to study either the WTO institutions or disputes in its progress. 

Underlining the importance of consensus, Mr. Lamy does not regard the global governance of world trade system as perfect. He believes much of the effectiveness in many aspects of global trade governance is due to lessons learnt from the past; for example, when prevailing trade protectionism after the depression in 1930s led countries into a fierce world war. He also believes that that open-trade is closer to practical national interests than other topics like immigration or human rights dispute, thus more crucial to global governance.

Mr. Lamy also points out that the major purpose of global trade governance has shifted from open trade. Simply put, while imports, exports and tariffs can all take place in a minute within the current global network, what really matters is the gaps and transitions between different sections. Barriers like boundaries and tariffs are gradually becoming less significant and may even disappear completely in 30 years. They could be replaced by new barriers resulting from technical obstacles and security problems, which will be far more difficult to overcome due to their variety and fluidity in forms. These new barriers, set up by governments to protect their domestic customers from risks, fundamentally change the focus of the game in three aspects: 1. the bargaining is not necessarily pivoted around the WTO; 2. from a viewpoint of political economy, the position of manufacturers is favored over customers; 3.the driving force of treaties such as the Trans-Pacific Partnership (TPP) is weakening, and treaties like the Transatlantic Trade and Investment Partnership (TTIP) are going to prevail.

Mr. Lamy concludes that further exploration of multilateral coordinating institutions is needed, while, the WTO needs to find its way to survive and adapt to the new situation. Future challenges lie in balancing and coordinating the number of participants, which will direct the global negotiation in the trade system to a brand new stage distinct from the past one. 

In the Q&A session, Mr. Lamy answered questions from faculty members on the understanding of the term “global governance,” the relationship between China and the WTO, the interior structure of international organizations, and the influence of the United States. He holds that all countries that have joined the global trade system have partly made concessions in their sovereignty, a case in common with the institution of the European Union. Great powers make such concessions because it serves their national interests better. Joining the WTO is a big step for China since it has to make many efforts to adapt to the WTO and the existing order. However, the grand economic achievements of China in the present day would be unimaginable without its joining the WTO. The U.S. has enjoyed a leadership in the international system for about 140 years strictly speaking, which is the result of ideology and historical opportunity, and will continue to be in the predictable future, due to its ability to transform its advantage as a system leader into interest. With a rather effective interior structure of the WTO, the real obstacles of negotiation in each round are basically the interior bargaining of each member state. Meanwhile, people are not supposed to be confined within the old international trade system, which is measured by the volume of imports and exports only, but to make efforts to establish new sets of standards of trade evaluation.