PETER SUTHERLAND, the Irish chairman of oil giant BP, has called the collapse of global trade talks "tragic" and has warned of serious consequences for the world economy, writes Jamie Smyth.
He has also warned that the failure of negotiators in Geneva to get a basis for a World Trade Organisation (WTO) deal will have implications for multilateralism.
"If states cannot even work together on something as obvious as world trade, then how can we effectively address other issues that require a multilateral response such as climate change?" Mr Sutherland asked.
Mr Sutherland was head of the General Agreement on Tariffs and Trade, which later became the WTO, when the last global deal was agreed in 1994.
He told The Irish Timesyesterday he was deeply disappointed by the collapse of the talks, which he believed would inevitably damage the credibility of the WTO and the rules-based system that it had created to help to foster world trade.
"There is no doubt that this breakdown will have serious consequences for the economy and particularly for the integration of developing economies into the global economy," he said.
A breakdown in the talks would foster protectionism and could prompt big trading blocs to seek a range of bilateral trade deals.
"This is not in the interests of Ireland or the wider world."
The WTO now estimates that reductions in tariffs and the elimination of other trade-distorting measures through this deal has helped to raise world income by between $109-$510 billion (€69.9 billion-€327.3 billion).
In the early 1990s, he said, "the conclusion of the Uruguay round and the founding of the WTO produced the framework for globalisation as we know it now. It created a system of multilateral rules that was vital for the integration of China and other developing countries into the global economy."
Mr Sutherland argued that the kind of economy that would have been created by bilateral deals would be very different.
Ireland, he said, would have benefited more than most EU states if a deal was agreed despite the opposition of farmers that fear cuts in protection for farm products.
"We are more dependent on trade flows than any other OECD country. Ireland and Belgium are the two most globalised economies in the EU in terms of total percentage of gross domestic product that is generated by trade."
