By: KATE MILLAR Agence France Presse
GENEVA, The multilateral trading system is under pressure as the drift towards regional trade agreements picks up speed, adding weight to calls for a new round of global trade liberalisation negotiations.
Regional economic accords existed long before the World Trade Organisation (WTO) was created in 1995, but their number has doubled to about 200 since then, prompting fears they could undermine the WTO objective of removing trade barriers.
"You can't build a house with different shapes of blocks," warned Yoshiji Nogami, Japan's deputy foreign minister said in January. But Japan has just become one of the latest countries to team up in a new bilateral free trade deal, announcing with Singapore 10 days ago they had completed talks on launching the accord.
The pact is the first bilateral agreement that Japan, the world's second largest economy, has entered into, having previously favoured multilateral agreements in bodies such as the WTO.
The WTO's General Agreement on Tariffs and Trade (GATT), which covers trade in goods, permits regional trading arrangements to be set up under strict criteria but has set up a special committee to check that the accords are consistent with WTO rules.
The WTO itself maintains that regional trade agreements complement the multilateral system but critics argue that the trend towards regional pacts only benefits the world's strongest economic players.
"Everyone wants to do a free trade deal with Japan or with the United States. For the most marginal of our members, who's knocking on their door? Only us," WTO Director General Mike Moore commented in Tokyo in January.
The Geneva-based world trade body suffered a major set-back after its member governments failed to bridge differences and agree on the launch of a new trade round in the US city of Seattle in 1999.
Moore has warned that a repeat performance at next month's ministerial meeting in Doha, Qatar could spark new protectionist measures or prompt countries to seek regional trade agreeements in a global economic slowdown.
Stressing the multilateral system was still the "best solution," he has warned that "regionalism will advance if the oxygen is sucked out of Geneva."
Fears of greater regionalism were reinforced by the arrival of US President George W. Bush's administration, which has made the realization by 2005 of the Free Trade Area of the Americas (FTAA) a main goal.
Nonetheless, the United States is a leading proponent of a new trade round and like most countries involved in regional agreements -- customs unions or free trade areas -- strongly backs the multilateral system.
"There is no longer a logic of opposition between regional and multilateral accords," commented one trade expert.
"People are saying 'you need both and they must cohabit'," the expert said.
Experts point out that for poorer countries, regional accords offer the opportunity to target their goals more specifically and more quickly by granting them preferential treatment over another country.
As a least developed country, Bangladesh can benefit in a preferential agreement with the European Union for its textiles, for instance, putting it at an advantage over India or Pakistan. This kind of advantage may not be available under a WTO multilateral agreement.
There is also the question of political influence, they said, explaining that if for example Brazil favoured a new round it was partly because it did not want to be dominated by the Americans in FTAA.
"They want a counterweight," an expert said.
The need to clarify the relationship between the WTO and regional trade agreements is expected to come under the spotlight at the discussions in Doha where the issue is on the draft agenda:
