A SUMMIT of world leaders is needed to push trade issues on to the political agenda, Peter Sutherland, former World Trade Organisation director-general, says in a report commissioned by the organisation.

In a sharp appraisal of a body that has been drawn increasingly into conflict, the report, The Future of the WTO, calls for more involvement by political leaders, better dialogue with the public and the creation of a core group of 30 nations to speed the trade negotiating process.

Mr Sutherland gave warning yesterday that “institutions can fail too through neglect” and the report states that the WTO’s monopoly of trade negotiation is under threat from the spread of preferential trade agreements — special deals that big trading powers, such as the EU and the US, dole out in political favours to friendly nations.

The WTO’s Consultative Board, led by Mr Sutherland, was established two years ago in response to widespread criticism of the organisation. The violent disputes that erupted on the streets of Seattle in 1999 at the ill-fated WTO ministerial meeting and the collapse of negotiations in Cancún in 2003 prompted Supachai Panitchpakdi, the current director-general, to commission a review of the organisation’s structure.

Once a dull organisation controlled by wealthy nations for the purpose of agreeing customs duties, the WTO has found itself at the centre of vigorous debate over “globalisation”.

The power of wealthy trading nations has come under attack as developing countries demand reforms in trade in agriculture, a sector heavily protected in the US, Europe and Japan.

However, efforts to achieve agreement have been stymied by the need for consensus among every member state. Critics, notably Pascal Lamy, who is campaigning for election as Mr Panitchpakdi’s successor, described the WTO’s negotiating process as “medieval”.

Yesterday’s report identified the need to speed the negotiating process and prevent nations from using their veto arbitrarily.

The report proposes that the WTO increase the frequency of its ministerial conferences from the current biennial to an annual event. In addition, it calls for the creation of a consultative body of no more than 30 nations that would provide political leadership. While the consultative body would not have binding decision-making powers it would set the agenda, having the authority of the major trading powers and membership from regional and political blocs.

Meanwhile, the use of vetoes would be made more difficult, requiring that a state that blocks a measure that has otherwise broad support would have to declare its objection in writing with reasons, explaining the vital national interest that is threatened.

The WTO’s search for consensus is undermined, however, by the spread of preferential trade agreements. Mr Sutherland rejects them as “merely a reward for governments pursuing non-trade related objectives”.

The US and the EU have used such agreements to garner political favour and reward countries that lend support in other forums, such as the United Nations Security Council. Instead, Mr Sutherland concludes, there should be a “commitment by members of the WTO to establish a date by which all their tariffs will move to zero.”

REAL VILLAIN OF THE PIECE

The most telling comment in The Future of the WTO is a passing remark: “The WTO is not part of the United Nations, nor should it be so.” A succession of failed conferences and meetings from Seattle in 1999 to Cancún in 2003 have raised the spectre of the UN to frighten those diplomats in Western capitals who fear the WTO may be derailed by politics. Free-trade supporters heap blame on NGOs, the unelected lobbyists from environmental and development organisations who campaign on single issues and have occasionally blocked decisions, notably persuading St Lucia, the Caribbean island, to oppose a settlement of the dispute over banana quotas.

However, the report identifies the real villain as political indifference by governments that tend to relegate trade talks to the back of the queue of pressing issues. The report notes that the WTO is under no obligation to engage with groups seeking to undermine it.

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