Pascal Lamy Advocates World Government at Delhi Mini Meet

- Arun Goyal –
Editor and Special Correspondent, World Trade Scanner

The WTO mini ministerial was held in India for the first time on 4 September in a bid to apply pressure to make the Indian Government commit itself to open its market. As of now, the scene is set to make a beginning in this direction. The new Commerce Minister Anand Sharma has replaced Mr. Kamal Nath who was known for his hawk like stance. Anand Sharma is very close to the Prime Minister Manmohan Singh who is personally in favour of opening out the economy and bringing the Doha Round to close at the earliest.

The WTO Director General Pascal Lamy is not too hopeful of India changing its stance. He has seen the country up close during his terms as Trade Commissioner of the European Union and also as Director General of WTO. Many times India has upset the cart and many done deals were undone by the rigid Indian stances. He was not taken in by hopes and aspiration generated with India hosting the mini ministerial.

Pascal Lamy, however, does not let opportunities go past him. He used the Delhi mini ministerial to air his views on a world government. Speaking at the National Chamber of Commerce (FICCI), meeting on 2 September, he outlined the framework of the new set up to regulate the world economy in the light of the financial crisis sweeping the world. A world regulatory authority is required for financial market. Lamy says, “if the animal quarantine laws are globalised, surely financial rules should also be in an international frame”.

The hugely successful G-20 which is a grouping of the significant actors in the world economy drawn from the Developed and Developing segments will provide leadership to the world. Specialised organisations like WTO will be the executive which will frame and implement rules while the United Nations will function as the World Parliament, the “talking shop” where one country counts for one vote.

The financial crisis engulfing the world provides the necessary pressure for the world to act together. The stand off between the Muslim world and the rest is creating the political crisis so necessary to bend the nationalist forces to the international plane. The success of the G-20 in bringing together significant actors on the world stage to introduce much needed liquidity in the world has shown the way to the likes of Pascal Lamy who are now advocating a world government to run the global economy in a “proper” way.

India has always feared loss of sovereignty with the coming of WTO. The DSB (Dispute Settlement Body) at the WTO rides over the General Council which is based on the “one country-one vote” and consensus principle. The effectiveness of WTO is based on the DSB which has brought many a country, including the mighty US, to the knees.