Trade helped developing countries cut poverty - Lamy

GENEVA Wed Sep 15, 2010 2:29pm BST

GENEVA (Reuters) - The global trading system has helped developing countries fight poverty by preventing the rise of protectionism in the financial crisis, the head of the World Trade Organisation said Wednesday.

WTO Director-General Pascal Lamy said it was striking that emerging economies were now the most vociferous in calling for conclusion of the Doha round to open up world trade, as they stand to benefit further from a rewriting of global trade rules.

Lamy was speaking a week before the United Nations reviews progress on slashing world poverty through a system of targets known as the Millennium Development Goals.

"So far the multilateral trade system has weathered the crisis reasonably well, developing countries have been protected from... a big wave of protectionism," he told a WTO forum.

Lamy said the disciplines of the trading system umpired by the WTO, encouraging its 153 members to keep their borders open, was allowing trade to expand by 10 percent this year after contracting 12 percent in 2009 in the economic crisis.

"This is a major contribution to helping developing countries cope with this crisis," he said.

CHANGING PATTERNS

A big change in global trade patterns is that in the last decade developing countries have been trading more intensively with each other. This South-South trade now accounts for 50 percent of many poor states' commerce, increasingly replacing old trade links with former colonial powers, he said.

At the same time the rise of global supply chains means that developing countries no longer need to aim to specialise in entire industrial sectors but can be competitive even by manufacturing individual components.

"There are new opportunities. Overall the system has been moving in the right direction," Lamy said.

The Doha talks have been stalled for two years, mainly over differences between rich powers like the United States and European Union and emerging economies such as China and India over the extent to which poorer countries should open up their markets.

Negotiators say a deal will only be possible in 2011 at the earliest.

Former Botswana President Festus Mogae said a Doha deal was essential for middle-income countries in Africa to protect their fragile economies from protectionism and unfair trade practices.

"The forces that determine world trade are old-fashioned self-interest," he told the forum. "The weak have no voice."

(Editing by Sonya Hepinstall)