Bangkok Post, Thailand | By Boonsong Kositchotethana | February 5, 2004
The head of World Trade Organisation slammed the mushrooming regional trade agreements (RTAs) as discriminatory and not conducive to attempts to forge a global trade liberalisation accord.
RTAs are also commonly referred to as free trade agreements or FTAs.
"RTA is really creating some kind of discriminatory treatments. I'm not satisfied with it," said Supachai Panitchpakdi, director-general of the WTO.
With over 300 separate bilateral trade arrangements already established between countries and groups of states and some 60 additional in the making, he conceded that it is very difficult to go against the trend of creating more regional trade treaties.
Dr Supachai questioned the merits of surging RTAs, which revived heated debates on the effect of regionalism on multilateral trade negotiations which are under WTO's mission.
"Nobody really knows whether they (countries involved in forming RTAs), are going in the right direction because we don't have the mechanism to track them down," he told journalists from Asean member countries.
Checking is an uphill task, said Dr Supachai, as those countries involved in RTAs do not want their RTAs to be scrutinised and monitored and everybody says they are in compliance with article 24 of the General Agreement on Tariffs and Trade though there are clauses which are not negotiated here at WTO at the moment.
Essentially, the article says groups of countries can form free trade areas provided they do not increase barriers on imports from outside the groups.
Politicians nowadays like to go off to sign RTA deals. "Then they go back back to say anything (they like) because there is no witness," he said.
Some countries have turned to RTAs as an excuse to the collapse of WTO's ministerial conference in Cancun, Mexico, in September.
The vast majority of WTO's 146 members including Thailand are engaged in one or more regional trade agreements. The surge in RTAs has continued unabated since the early 1990s.
The WTO chief urged countries to spend as much time and efforts to forge multilateral trade agreements as they dedicate to making RTAs.
Supporters of RTAs see them as stepping stones to full global free trade, by increasing the level of competition and allowing local industries time to adjust.
RTAs can also be valuable arenas for tackling volatile trade issues such as agricultural subsidies and trade in services. Political pressures and regional diplomacy can resolve issues that cause deadlocks in multilateral negotiations.
Luis Fernando Furlan, Brazil's Trade Minister, told a panel at the World Economic Forum in Davos recently that individual trade accords should be promoted as they lay the ground work for a global agreement.
Opponents of RTAs describe them as a complex web of competing trade interests that hinder any multilateral agreement. Especially as RTAs create preference systems that transcend regional boundaries, political and economic tensions will lead to hostility and increased retaliation.
Opponents are also concerned that some countries that benefit from regional trade agreements will be reluctant to expose themselves to the potentially grave risks of opening their markets completely if they expect relatively insignificant returns, according to a Harvard University study.
Meanwhile, Dr Supachai said recently talks with ministers of WTO members showed greater "gravity" towards getting the negotiations back on track and completing the treaty by the end of this year, though it is likely to miss the deadline.Bangkok Post, Thailand:
