Trade system starting to work: Lamy

A 250 billion financial package to revive a global trading system crippled by the credit crisis is starting to bear fruit,especially in Asia,the head of the World Trade Organisation WTO said on Saturday. Oil is returning to the various mechanisms of world trade, WTO Director-General Pascal Lamy told Reuters in an interview in South Africa.

My sense but its a qualitative feeling at this stage is that notably in regions like Asia,because countries like China stepped in very vigorously,things are picking up, he said. Despite this cautious optimism,Lamy said the Geneva-based body was maintaining its forecast of a 10 per cent contraction in global trade this year as a result of world recession and the freeze-up in trade credit precipitated by financial crisis.

Lamy also said WTO members acknowledged South Africa8217;s argument for special treatment in the current Doha round of trade talks because of relatively deep cuts in industrial tariffs made under apartheid,which ended 15 years ago. During white minority rule,South Africa was treated in trade terms as a developed country,rather than the developing status it now enjoys.

South Africa had to take,at the time,tariff reductions commitments that were more stringent than other developing countries, Lamy said.

This is recognised. South Africa will,at the end of the negotiations benefit from specific flexibilities. Thats now recognised. How much of that is still to be negotiated, he said.