By Charles Pretzlik
Published: December 14 2007 02:00 | Last updated: December 14 2007 02:00
Peter Sutherland, 61, is described by some as the father of globalisation. He ran the General Agreement on Tariffs and Trade and became the head of its successor body, the World Trade Organisation. Now chairman of BP and Goldman Sachs International, the investment bank’s non-US business, he has a remarkable vantage point from which to survey world affairs.
In a video interview on FT.com, Mr Sutherland talks about the current market turmoil, his fears for the Doha round of trade talks and signs of protectionism. He also discusses the successes and challenges of his decade at the top of BP, the priorities for Tony Hayward, BP’s new chief executive, and his own plans after he steps down from BP in 2009. Among other activities, he hopes to develop his interest in European integration. Edited highlights are given below.
Just how long can the market turmoil continue?
It’s likely to continue – perhaps in a gradually abating sense – for quite some time into the new year.
Can growth in the emerging markets mitigate the effects of any US slowdown?
It can certainly mitigate and it is mitigating, and growth prospects remain reasonably firm in India and in China over the coming period. But to say that those markets will not be affected by a difficult situation in the US would be wrong.
Is rising protectionism a geopolitical threat at the moment? One example is Hillary Clinton’s remark that the Doha Round was of limited benefit.
I was deeply worried by that intervention. The Doha Round is very, very important; it is also in deep difficulty at the moment. It seems to be forgotten that the WTO and the discipline that the WTO has brought into trade negotiations and into the integration of China in the global trading system has been crucially important in providing rules and a road map for the liberalisation of economies globally and providing assurance of the globalisation process. This has given us years of sustained growth and has been very important in the development of the Brics.
Do you think the WTO could have done things differently to prevent the Doha Round drifting?
Yes. It has been very unfortunate that, as usual, agriculture, a diminishing and relatively tiny part of the global trade fabric, has dominated the debate and was put up front. I would have preferred to have seen a much faster process in terms of services liberalisation because I think services liberalisation could have developed earlier a constituency of support for the completion of the Doha Round, which would have been formidable.
What can anybody do to kick-start the process?
It’s very difficult. Some people would say that Pascal Lamy, the director-general, should put a proposition on the table and in principle I’m not opposed to that as an idea. The difficulty is that if you are simply putting something on the table that you know is going to be universally rejected, where do you go? And have you not damaged the WTO even more by doing so?
How do you think the Irish government will handle next year’s referendum on the EU treaty?
I am confident that it will be passed. I think Ireland had a shock over the Nice Treaty, and when they voted again it was overwhelmingly passed.
When will you step down from BP?
The annual general meeting in 2009 is the anticipated date.
And if finding a successor works faster than people anticipated, would you go earlier?
I’ve always been willing to do whatever is desirable for the company but I think everybody is determined that the procedure that I have already mentioned is the appropriate one and that there should be some overlap also once the person is identified.
What will you do next?
I have no plans. What I will not do next is take a substantial involvement in the corporate sector. I’ve retained a very significant interest in various aspects of public affairs. Over the past year or two I’ve spent a little bit of time, obviously limited, but as special representative of the secretary-general of the UN on migration and development, which I’ve enjoyed. I’m about to become chairman of the London School of Economics, which I will also enjoy. But I will continue to pay particular attention to the European debate.
What do you think has been the most challenging thing to deal with at BP?
The last year or two has been very challenging but first of all one should not forget the enormous achievements, which I claim no credit for. It was all handled, bearing in mind the extent of the issues we had to deal with, as well as it could have been. But I am sorry the circumstances were such that we had to face that, and I’m sorry also for those who were involved, particularly for John [former chief executive Lord Browne].
Did the two of you disagree over whether some deal with Shell would be sensible or at least worth exploring?
The decision about whether or not there was a deal was never moved to a final position at all. I don’t think it’s worth speculating about the consideration of a whole range of different alternatives which we would have had at various stages. I think that that has taken on a life of its own as a discussion.
Long or short?
Oil? Long Nuclear energy? Long Equities in the next 12 months? Neutral Chances of Lord Browne getting a FTSE 100 directorship in 2008? Very long, if he wants it Likelihood of conflict with Iran? Short Belgium as a united country? Long The Doha round? Short Mervyn King? Long Yes vote in the Irish referendum on the EU treaty? Long Philanthropy in an economic slowdown? Long
Copyright The Financial Times Limited 2007