BANGKOK POST | November 7, 2001
The World Trade Organisation is gearing up for its fourth ministerial conference, to be held in Doha, Qatar, this weekend. Speculation about whether the meeting should proceed given the current security situation in the Middle East was put to rest when WTO director-general Mike Moore decided after a visit to Doha that the conference should go ahead.
There is good sense in this. The launch of a new round of multilateral trade negotiations, which is the outcome envisaged for the Doha meeting, can provide much-needed reassurance to business and the global community at a time of great uncertainty.
All 142 WTO members should recognise the value of a successful round. Economists have attributed a net global welfare benefit of $750 billion (33.5 trillion baht) to the last round of multilateral trade negotiations, the Uruguay round, which ended in 1994. According to a new World Bank report, abolishing all remaining trade barriers could boost global income by $2.8 trillion (125 trillion baht) and lift 320 million people out of poverty by 2015. The report said the biggest potential gains for developing countries were from trade in services. That could increase their income by $900 billion (40.2 trillion baht) - more than four times the $190 billion (8.5 trillion baht) that could be generated by liberalising merchandise trade.
To ensure a successful outcome to the Doha conference, governments will need to avoid some of the pitfalls that were encountered at the Seattle WTO ministerial meeting two years ago. An absence of genuine commitment on the part of the major economies and the refusal of developing countries who make up two-thirds of the membership of WTO to join in any consensus unless their trade concerns were addressed meaningfully by developed countries were among the factors that undermined the efforts to start a new round of global trade talks.
Anti-globalisation protests were another element that determined the failure at Seattle. Member countries have done little to open up the WTO to the participation of non-government organisations. Better communication is important to increase understanding, but the transparency complaints and protests are likely to continue until members take some meaningful decisions on the issue of civil society participation. It is to be hoped that enough has been done by WTO members to involve their national stakeholders in the formulation of national positions so that such protests can be avoided in the future.
There needs to be a firm commitment from major WTO players - the United States, European Union and Japan - to attend and take constructive approaches to the meeting. Just being there at a time like this sends an unmistakable signal to WTO members and their business communities that the major economies are serious about supporting and improving the international trading system, and that notwithstanding the shock to the global economy delivered by the Sept 11 terrorist attacks, the world community is still in business.
Giving the process leadership is the next task that falls to these major economies. Arguing among themselves and offering other participants a take-it-or-leave-it outcome one or two hours before the meeting is to end is not a satisfactory way to ensure that all participants have been part of the final deal. For the Doha meeting, the majors must demonstrate a willingness to work together and to be prepared to compromise on some of their national objectives.
The stumbling block to trade for most WTO members has been in the agricultural sector. This mainstay of economic growth, especially for developing countries at all levels of economic development, has suffered from targetted protectionist policies, particularly in the European Union, Japan and the United States.
For Thailand and other members of the Cairns Group of agricultural fair traders, serious commitment towards the elimination of export and domestic subsidies on agricultural commodities is the priority for a new round of trade negotiations. There are signs of willingness on the part of the EU and the United States to make some improvements and even to consider the prospect of longer term strategies for the elimination of subsidies.
At the same time, many developing countries are not well equipped to manage their trade policies and are really not ready to take on new commitments on new trade issues such as labour, investment and competition. They have argued that for developing countries the "balance of advantages" that was supposed to have resulted from the previous round of multilateral trade negotiations (the Uruguay round) has not been achieved.
Developing economies see the burden of implementing complex domestic regimes, such as in the area of intellectual property rights, in exchange for what they see as very limited improvements in access to developed country markets for agricultural products and textiles/clothing as a very unbalanced outcome for them. They don't want to make the same mistake again. Hence a very cautious approach when yet more complex issues with uncertain implications for their limited trade policy bureaucracies and stretched legal and judicial infrastructures are thrust upon them.
But it would be a mistake and self-defeating for developing countries to sit on their hands at Doha and refuse to move forward on a new round simply because the previous round did not live up to all their expectations. If the global trade liberalisation agenda fails it will be the developing countries that suffer most.
Nonetheless, if we and other developing countries are not able to establish a basis for negotiations that enables us to identify the prospects for a balance of advantages in our favour, Thailand has other options.
Regional free trade arrangements through the Asean Free Trade Area (Afta) are partly complete and the promise of negotiations between Afta and China give us just one set of attractive alternatives. There are other regional processes being explored.
Bilaterally, the cabinet has already decided we should be working with countries like Korea, Chile, Australia and New Zealand. Pursuing bilateral approaches give us a simple but effective process for securing a balance of advantages with our major trading partners. It may not yield as high a result in terms of overall market access as multilateral negotiations, but it is a good start and could well produce faster results even if a new round of global trade negotiations is launched at Doha, since such a round could take three to four years to conclude.
The key thing is that Thailand, which owes up to 60% of its gross domestic product to exports, must remain proactive, imaginative and nimble in exploring all options for liberalising and expanding its trading environment and for "bulking up" the punch it can pack as an economic and trading entity. That is the only way for Thailand to emerge durably from the effects of the 1997 crisis.
For countries to reap the expected benefits from a new round of global trade liberalisation, co-ordinated actions must be taken to promote trade reforms in developing countries. Gains for developing countries will derive mainly from the dismantling of their own import barriers, which would enhance their efficiency and competitiveness.
At the same time, the World Bank report points out that rich countries need to cut farm subsidies and texitiles import barriers, restrict the use of anti-dumping measures and possibly relax curbs on the temporary movement of workers across frontiers in order for the full benefits of global trade liberalisation to flow throughout the international economy.
At the World Economic Forum summit held in Hong Kong recently, one of the speakers urged countries to all do more of the cha-cha-cha. In a crisis situation, we need to change, to take chances and to meet challenges. Doha can provide the background music. As delegates prepare to assemble, they also need to prepare a proper reply to a question the late Yul Brynner might have asked: "Shall we dance?".
- Kobsak Chutikul is a member of parliament and a deputy leader of the Chart Thai party.
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