WTO head Pascal Lamy warns of looming protectionism without world trade agreement

Tensions in the global currency markets threaten to spill over into protectionism unless progress is made on concluding the long-running Doha round of trade liberalisation talks, the head of the World Trade Organisation said today. Ahead of a meeting of trade ministers in Davos this weekend, Pascal Lamy, the WTO's director-general, said he was looking for the big players in the talks to show a willingness to "give and take". Lamy believes that protectionism has so far been "the dog that hasn't barked" during the turbulence of the past three years, but warned: "If the currency system becomes too volatile then we will probably have trade problems." He added: "I expect the existing tensions to remain. There is an obvious spillover on the currency market of monetary policy easing that the crisis has triggered." Behind the scenes in Davos, Lamy was trying to find common ground between Washington and Beijing in an attempt to push forward with the complex negotiations, which were launched almost 10 years ago in November 2001. The WTO believes that without agreement between the US and China there can be no successful end to the Doha talks, which cover agriculture, manufactured goods and services, as well as the rules governing trade. A political push from the meeting of the G20 in Seoul last November gave Lamy hope that the round could finally be wrapped up this year but he said today that there were still obstacles in the way. "We should not be over-optimistic. A lot of nuts remain to be cracked," he said. Trade ministers from 25-30 countries will meet in Davos on Saturday, with both David Cameron and the German chancellor expected to call for action when they attend the World Economic Forum tomorrow.