KEY POINTS:
The collapse of world trade talks in Geneva is disappointing, and does not augur well for the world's ability to meet the challenge of a climate change treaty to succeed the Kyoto Protocol, OECD secretary-general Angel Gurria says.
The Doha trade round has slipped back into a coma
after the failure of a marathon negotiating session in Geneva to conclude a deal.
But the talks made progress on several fronts and Gurria, who is visiting New Zealand, said he agreed with Trade Minister Phil Goff about the importance of ensuring offers already made were not withdrawn.
Gurria had been optimistic a deal could be done to end the Doha round, which has been under way for seven years. "It's very sad," he said.
The round was intended mostly to benefit developing countries, and deliver some "well-deserved" market access for countries such as New Zealand which had liberalised their trade already.
"Now the fear is that protectionism will show its ugly face."
But compared with the Doha trade talks, the economic stakes and the financial, technological and legal complexities of the sort of climate change treaty the world needed were far greater.
"And they can't do Doha. This was the low-hanging fruit," he said. "We should be getting more multilateral in our approach, not less so."
An effective climate change treaty would require enormous political will and an understanding on who paid for what, not just in technology but in terms of avoided growth.
Gurria, who has served as foreign minister then finance minister of Mexico, became secretary-general two years ago of the Organisation for Economic Co-operation and Development, a grouping of 30 countries which account for about two-thirds of world GDP.
The OECD had thought that the world economy would be recovering from its downturn by the second half of this year and go into 2009 with good momentum.
"That's not going to happen" Gurria said. "It has moved back a year Unfortunately it is probably going to take until 2010 to get back to cruising speed."
With confidence at a low ebb in credit markets, even banks which were not themselves vulnerable were finding that funding had become very expensive and that in turn retarded growth.
Annual inflation across the OECD jumped to 4.4 per cent last month, an eight-year high, driven by rising oil and food prices.