Former WTO Director-General Lamy in dialogue with CCG President Wang Huiyao

On 13 December 2023, Vice-President of the Paris Peace Forum, former Director-General of WTO Mr. Pascal Lamy delivered speech at the Center for China and Globalization (CCG) and entered into a dialoguewith CCG president Dr. Wang Huiyao. Mr. Pascal Lamy and Dr. Wang Huiyao brought their unique perspectives on the challenges facing the global trading system and their impacts on the world in 2024 and beyond. At the meeting, Sun Yongfu, CCG Senior Fellow, former MOFCOM Director-General of European Affairs, JI Wenhua, Professor at School of Law, University of Internaional Business and Economics (UIBE), Li Siqi, Associate Professor at China Institute for WTO Studies, UIBE, also delivered comments as special guests.

Economic globalization has faced strong headwinds in the recent year.

Today’s global trading system, as exemplified by the World Trade Organization, has come under assault from many directions and for many reasons. The 13th WTO ministerial conference is fast approaching in February 2024 with a packed agenda, including proposals to revitalize the multilateral institution. The year 2024, the consequential US presidential election will likely further compound the question over

WTO’s viability. As world leaders are talking about reforming the WTO, questions such as what are the prospects for change.

How will the multilateral body move forward its modernization agenda at a time when trade policy tensions are on the rise and fragmentation along geopolitical fault lines is finding its way into trading bloc? What role will China play in revitalizing multilateral trade, need to be explored. This dialogue takes place against this backdrop.

In the opening speech, CCG president Wang Huiyao firstly warmly welcomed the guests and introduced the life and tenure of Mr Pascal Lamy.

In the guest speaker session, Mr Lamy described the role that the EU and China would play in revitalising multilateral trade. He said that globalisation has continued and not been interrupted. Currently globalisation is encountering many challenges and the process of re-globalisation is very unpeaceful. Whereas globalisation in the past had been driven mainly by big powers, globalisation in the future will most likely be driven by all, and each country will have to make a difference to resolve differences of opinion and produce results by finding common ground. He argued that, despite the difficult environment, it was important not to lose confidence in future investments, and that China and the EU could contribute to many global issues, such as climate change, by working together in a coordinated and cohesive manner to create more solid conditions.

In the dialogue session, CCG president Wang Huiyao discussed issues with Mr. Lamy including climate change, global digital governance, and China’s power in WTO reform. President Dr. Wang pointed out that China’s accession to the WTO to promote economic globalisation has been fruitful and encountered many headwinds. We need to strengthen the multilateral system, and issues like climate change, digitalisation and AI are both challenges and opportunities. In the face of urgent matters, it is crucial for countries to reach a consensus on governance standards through communication and compromise. The WTO is expected to promote consensus in these new areas. China, the United States, Europe and other countries need to strengthen consultations, and the EU can play a more active role.

In his statement, Lamy pointed out that the protection of the planet was urgent, and that the issues of climate change and biodiversity were top priorities and a general consensus had been reached. In terms of global digital governance and the management of AI, he argued that sovereign states and governments need to regulate the risks that AI can pose, while society at large needs to be convinced that a scientific approach should be used in the management of AI, and that it needs to be turned into a public good that serves the public. On the issue of WTO reform, he emphasised the need for legally binding institutions to ensure that resolutions are taken seriously, from which the WTO derives its credibility.

Sun Yongfu, CCG Senior Fellow, former MOFCOM Director-General of European Affairs, Ji Wenhua, Professor at School of Law, University of Internaional Business and Economics (UIBE), Li Siqi, Associate Professor at China Institute for WTO Studies. UIBE, also delivered comments as special guests.

Sun Yongfu asked Mr Lamy what he thought about the year-on-year decline in bilateral trade between China and Europe in the first three quarters of 2023, and what his outlook was for the future of China-EU trade.

Lamy said that there are three reasons for this situation: first was the weakness of mutual investment between China and Europe; second was the failure of the European Chamber of Commerce in China to resolve many of its claims and the decline in its assessment of the ease of investing in China; and third was the European Parliament’s view that China is overreacting to the freezing of the China-EU Investment Agreement, and that European companies are choosing to relocate or pull back as a result, which will take time to dissolve.

Professor Ji Wenhua asked Mr Lamy what role the EU could play in the reform of the dispute settlement mechanism in order to create synergies for reform.

In his reply, Lamy emphasised that dispute settlement solutions need to be binding, that negotiations without binding force would be a dead letter, and that one of the key issues is to get the US to accept what it has not previously accepted. In this regard, the EU could serve as an intermediate node in the implementation of the resolution.

Responding to another question from Professor Li Siqi, Lamy pointed out that in WTO negotiations, it is difficult to solve problems if both sides make concessions from the other side as a condition for their own concessions. On the issue of trade barriers, he believes that it is crucial to form a consensus among big countries.

During the media Q&A session, in response to the question about China’s clean energy technologies and the economic highlights of 2023, Lamy argued that China’s electric vehicles are heavily subsidised, while domestic demand is below capacity, so they have to be exported to target markets such as Europe, the US and Japan. However, he admitted that Europe can only absorb part of the capacity and it is difficult to do so completely.

Other guesta also included William Klein, Consulting Partner at FGS Global and former Minister Counsellor for Political Affairs at the US Embassy in Beijing, Adam Pickford, Counsellor for Economic and Trade Policy at the British Embassy.

On the day of the conference, Mr Pascal Lamy and his assistants also met and exchanged views with Chen Deming, Honorary Chairman of CCG and former Minister of Commerce, Yi Xiaozhun, former Vice Minister of Commerceformer Deputy Director-General of WTO, as well as other leaders of the Ministry of Commerce and other relevant departments.

From 2005 to 2013, Pascal Lamy served two consecutive terms as Director General of the World Trade Organization (WTO). Previously, he was Trade Commissioner (1999-2004), Director General of Crédit Lyonnais (1994-1999), Director of Cabinet of European Commission President Jacques Delors and his G7 Sherpa (1985-1994), Deputy Director of Cabinet of the French Prime Minister (1983-1985) and of the French Minister of Economy and Finance (1981-1983).

His moat recent publications include publication “Strange new world” (Odile Jacob 2020) and “Où va le monde?” (Odile Jacob 2018).