The International Herald Tribune | By Thomas Crampton | October 24, 2003
The failure of trade talks in Cancun, Mexico, last month has prompted headline-grabbing politicians to jeopardize free trade by moving toward rival regional trade groupings, the head of the World Trade Organization said in an interview from Geneva on Thursday.
Moves toward regionalized trade deals similar to those taken this week by Asia-Pacific leaders in Bangkok may threaten the development of multilateral free trade on a global basis, said the official, Supachai Panitchpakdi, director general of the trade organization.
At the conclusion of their annual meeting this week in Bangkok, some leaders at the Asia-Pacific Economic Cooperation forum suggested increasing the pace of trade liberalization within the group. "I certainly do not object to exercises that reduce trade barriers," Supachai said by telephone. "But leaders are often just scoring political rather than economic points."
Japan and South Korea, for example, agreed at the meeting to begin talks this year to cut tariffs between themselves.
APEC's mission, increasing cooperation, would be undermined unless such activities fell within the negotiations framework of the World Trade Organization, Supachai said.
"They were talking about trying to speed up the free trade agreement, which on its own will become regionalism," he said. "If they live up to what they said in Bangkok about supporting the primacy of multilateralism, then the trend would not be toward regionalism."
A move toward regional groupings would bring many dangers and do little to facilitate free trade, he said.
Some free-trade plans do not take into account what has already been accomplished by the WTO or act to impede imports from nonmembers, he said.
"Sometimes all they have is an agreement to start talking about a few things," Supachai said.
He said multiple negotiations would affect private companies, hurt countries ill-equipped to deal with sophisticated multiple regional negotiations and give support to those opposing free trade.
"Some products may have 10 or 20 preferential tariff rates, depending on the countries, the groupings or the rules of origins," he said. "This will be a highly confusing state of affairs that I don't think the private sectors would enjoy."
Small countries with limited human resources to examine and negotiate trade deals would face tremendous disadvantages when managing multiple regional negotiations, Supachai said.
"They should beware that resources spent in many directions might not be worth it," he said.
For the future of global free trade, regionalization may make winning political support for lowering trade barriers even more difficult, he added.
"With such announcements, there are rather confused signals sent out," Supachai said. "Multilateral negotiations might be marginalized if the round doesn't go on as supposed to be."
Supachai said it was wrong to blame the Cancun failure for creating more regionalized trade talks. "I think its a bit unfair to say that because of the Cancun setback this flurry of activities is taking place in Asia and elsewhere," he said.
"Even if we came out of Cancun agreeing on agriculture these people would still embark on bilateral and regional free trade agreements."The International Herald Tribune:
