Global Policy Forum

By Hardev Kaur

The "reality check" begins at the World Trade Organisation's (WTO) headquarters in Geneva today. It aims to out-line elements of "convergence and divergence across a variety of potential negotiating areas" in preparation for the fourth ministerial meeting in Doha, Qatar.

Even as the final countdown begins "the gaps among positions on key issues remain", says Stuart Harbinson, WTO's general council chairman. And this, while attempting to create a momentum for the launch of a new round of multilateral trade negotiations. According to reports, despite the "open-ended informal meetings" in Geneva members are yet to reach agreement on the majority of issues.

These include Trade Related Intellectual Property Rights; Technical Co-operation and Capacity Building; Competition Policy; Elements of the Work Programme (subsidies); small economies, trade and debt, Least Developed Countries (LDCs) and special and differential treatment. Discussions on agriculture, investment, competition, dispute settlement review and subsidies are said to have shifted little from traditional positions.

Even as the differences remain, reservations and concerns of developing countries are given little attention. The developed countries continue to push their own agenda and views and what they think should be done at Doha - launch a new comprehensive round of negotiations on world trade. US Trade Representative Robert Zoellick is reported to have said that the chances of launching a new round of world trade talks at the Qatari capital have been strengthened.

This is because the US and the European Union (EU) are pushing for it. But what about other countries and members of the 142 multilateral organisation - the WTO? What about the views and concerns of developing countries? Is it because they do not matter as they are too small, poor and do not have the economic muscle and political might? As often happens the bigger and more powerful nations bully the poor countries into submission. The developing countries are made to accept decisions made "for them and on their behalf" without taking their views and concerns into account or even listening to them. The world trade talks and the new round should include everyone and not just the US, EU and other members of the "rich man's club".

Mike Moore, director-general of the WTO, who has been championing the rallying cry of the developed world for a new round, was "too busy" to attend the meeting of 49 LDCs in Zanzibar, Tanzania, recently and therefore did not hear directly from them. These countries, and many like them, that represent 10.5 per cent of the world population and have less than 1 per cent of world trade are lectured on the importance of opening up their markets to world trade and that "trade is the key engine for growth". Yet the products of these very poor countries are subjected to tariffs, non-tariff barriers and a host of other protectionist walls in the developed world.

Developing countries have reduced the barriers to trade faster than the developed countries. According to the United Nations Development Programme (UNDP), India had reduced its tariffs from an average of 82 per cent in 1992 to 30 per cent in 1997 and China had lowered its tariffs from 43 per cent in 1993 to 18 per cent in 1997. In contrast, the Multifiber Arrangement (MFA) which allowed developed countries to impose quotas on clothing and textile imports from developing countries, introduced in the late 1950s, had continued for a long time.

According to Unctad secretary general Rubens Ricupero, "by the time the MFA is dismantled it will already have lasted 50 years, a long time for a 'temporary' concession which was to allow US producers to adjust to textile imports from abroad. "A World Bank study estimates that barriers to manufacturing exports make up about 70 per cent of total export barriers faced by developing countries and that three-quarters of the gains from further manufacturing liberalisation would go to developing countries. Then again agriculture is heavily subsidised in developed economies, an estimated US$1 billion (US$1 = RM3. 80) a day in subsidies is provided by rich countries to their farmers. Other barriers keep out the produce of developing countries from markets in the developed world.

A University of Michigan study shows that cutting barriers to trade in agriculture and manufactured goods will boost world economy by some US$613 billion. And most of these barriers are in developed countries. And yet the rich countries continue to pressure the poor to open their borders immediately to Western goods and services. Their mantras on the benefits of open and free trade are almost deafening.

Harbinson and Moore are said to have circulated a report to delegates which sets out their evaluation of the current situation in the overall preparatory process. There is still lack of consensus.

African trade negotiators concluded that most African countries are not in a position to agree to launch negotiations at the WTO on new issues including investment, competition policy, trade facilitation, environment and electronic commerce. Their reasons, among others, are that these issues are not within the WTO's competence for developing multilateral rules. In addition, the new issues will add more obligations and overload the WTO agenda.

Other developing countries are also cautious on the push for a "comprehensive round". Malaysia's ambassador to the WTO, M. Suppermaniam, reminded his fellow negotiators that there is a lot of "unfinished business" and there is a need to attend to issues such as implementation and mandated negotiations and re-views from developing countries. These in themselves are major undertakings that many developing countries are unable to cope with.

But the US, EU and Australia argued in Hanoi last week "that if developing countries want market access then the way to do it is to launch the round so that they can negotiate market access issues". In a veiled threat, the developed countries indicated that they will press ahead with trade agreements among themselves, to the possible detriment of developing countries, if no multilateral regime can be adopted and if a new round of world trade negotiations is not launched in Doha come November.

This was confirmed by Asean secretary-general Rodolfo Severino who said: "There was fear expressed that if the round was not launched, there would be further incentives for bilateral deals among the rich countries". But this is already happening as evidenced from the increase in Free Trade Agreements (FTAs) in recent years.

To date there are 240 regional trading arrangements - 172 are in force and 68 under negotiations. A total of 80 came into being after the creation of WTO in 1995. Many developing countries, including Malaysia, are not against the launch of a new round. But it is important that the unfinished business is dealt with first and views and concerns of poor countries taken into account in moving forward.

Developed countries argue that a new round of multilateral trade negotiations would lock progress and advance the cause of free market access for products originating from LDCs. But as it turns out the developing countries have yet to come to terms with some decisions and outcomes of the Uruguay Round and are yet to realise its promised benefits. The developed world must understand and appreciate that no new round can start, and more importantly no new round can conclude, without having the interests of developing countries and the LDCs addressed and resolved.

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