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Financial crisis no cause for protectionism, WTO says

The financial crisis should not undermine efforts to open up the global economy, the head of the World Trade Organization (WTO) said Sept. 24.

WTO director-general Pascal Lamy said the lesson from the Great Depression that followed the 1929 Wall Street crash was that protectionism made things worse for economies.

“The current hurricane that has hit the financial markets must not distract the international community from pursuing greater economic integration and openness,” Lamy told a public forum at the WTO.

“In a financial crisis and at a time of economic distress, in particular at a time of soaring food prices, what impoverished consumers desperately need is to see their purchasing power enhanced and not reduced,” he said.

The WTO chief said it was important to complete the Doha round of multilateral trade talks, which began in 2001 and whose stated aim is to open up the world economy and help developing countries export more.

Lamy said diplomats were trying to get an outline deal on farming and industrial tariffs and subsidies, after ministers failed to reach a breakthrough in July. The newest aim was to agree on those two main pillars by the end of the year, he said.

Lamy did not say – as he did the previous week – that he was ready to bring ministers back to Geneva in the coming weeks to resume a high-level push for an agreement.

Such a meeting would require headway in talks between officials from seven major economies, who have met over the last two weeks to discuss the issue which led to deadlock at the July meeting – a measure to help poor-country farmers cope with import surges.

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