Sept. 25, 2009

G-20 Call for Financial Reregulation Clashes With Push to Complete WTO Doha Round - Which Mandates New Deregulation

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch Division

That numerous countries don't support the World Trade Organization (WTO) Doha Round's agenda of further financial services deregulation and expansion of the existing WTO model given the damage that is already done is not going to be overcome by world leaders once again urging a rapid conclusion to the talks. Instead of pushing for further WTO expansion, G-20 leaders should agree to an agenda that reverses the existing WTO limits on financial regulation and that rolls back the way that existing WTO rules leach into non-trade domestic areas that undermine important public interest policies. 

The G-20 leaders have announced a very perplexing plan of action that calls for reregulation of the financial sector to try to avoid the next economic crisis while simultaneously calling for completion of the WTO Doha Round, which would require additional financial deregulation, including new WTO limits on accounting standards through a text the disgraced Arthur Andersen firm had a hand in formulating.

Perversely, the Europeans at the G-20 have been the strongest proponents of a new global floor of financial regulation while simultaneously being the strongest proponents pushing for a G-20 agreement on a new deadline for completion of the WTO Doha Round, which European negotiators have packed with new financial deregulation requirements.

The G-20 leaders cannot have it both ways: They cannot follow through on desperately needed reregulation of the financial sector while also pushing for completion of the WTO Doha Round, which requires additional financial deregulation.