A noble purpose, but

Will the new urge to save the world from a global recession bring more pliant developed and developing countries to the table of multilateral trade talks? Niveen Wahish seeks an answer
Speculation has finally come to an end regarding the venue of the WTO ministerial conference. It is set to take place as originally scheduled in Doha, Qatar, on 9-13 November.
Just before that decision was made, there were doubts that the conference might be moved to a different location for security reasons connected with the US strike on Afghanistan.
In fact, the final communiqué of the Asia Pacific Economic Cooperation forum (APEC), according to Reuters, had omitted mentioning the venue of the planned conference.
Singapore had offered to host the conference if the organisers had opted against going to Qatar.
With the choice of the conference venue no longer in question, the organisers are once again focused on initiating a new round of global trade talks.
The parties pushing for a new round, namely developed countries and the organisers, will be keeping their fingers crossed. They fear they might fail in getting a new round started as they did at the Seattle ministerial conference.
But until the starting date is set everyone is trying to remain positive. WTO Director General Mike Moore said late last month he fully intends to secure agreement among the 142 member governments to launch a new round. "We need a round today more than ever to boost confidence in the global economy, in the multilateral trading system and in international cooperation," he said.
During the past few months, EU Trade Commissioner Pascal Lamy has toured the world to build a consensus for a new round. Developing countries believe that before initiating new commitments, developed countries need first to fulfil the obligations they took upon themselves during the Uruguay Round in relation to the developing countries.
Developing countries, who have been repeatedly assured by Lamy that their interests will be at the forefront of any decision-making, will probably opt for a new round provided the implementation of previous commitments is guaranteed. The point these countries are making is apparently seeping through to developed nations.
According to a WTO press release, Moore and General Council Chairman Stuart Harbinson drew up two draft negotiating documents as a basis for reaching a consensus on a future work programme for the 142 WTO member governments.
The two documents, Moore said, which set the framework for negotiations among member governments, have improved the chances of agreement among ministers once the conference is held.
The draft ministerial declaration proposes expanded negotiations and additional work in some areas of WTO activity, while the implementation text recommends measures to better meet the concerns of developing countries.
A recent statement by US Trade Representative Robert Zoellick maintains that "the proposal for implementation demonstrates that WTO members take seriously the concerns of those in the developing world."
"The development dimensions of trade are correctly at the centre of our considerations as they should be," Moore assured.
Geza Feketekuty, president of the International Commercial Diplomacy Project Inc, thinks all countries, both developed and developing, will be more flexible and will settle for a modest agenda at the conference. "Everyone will realise that failure at Doha could prolong a global economic recession by adversely affecting investor confidence. Foreign investment has already dropped significantly due to the increased uncertainty and risk," he said.
As Moore put it, "We need to ensure that when ministers assemble in Doha we have just a few areas of substantial difference between them."
While some believe that by entering into a comprehensive round developing countries can make trade-offs in their favour, others think the results of the first round have not yet been digested and a new one would only bring additional burdens in the form of new commitments.
Abdel-Fatah El-Gebaly, economist with the Al-Ahram Centre for Strategic Studies, believes that developing countries need to actively participate in negotiations. "Instead of taking something as a given, attend and do something about it," he advised.
According to Lutfy Abdel-Hamid, commercial counsellor at the Egyptian Ministry of Economy and Foreign Trade, "the trustworthiness of the organisation is at stake."
He pointed out that while developed countries are demanding that the developing world fulfil its obligations under the Uruguay Round, they themselves have not met their commitments.
Exports from developing to developed countries have been hampered by non- tariff restrictions such as rules of origin, environmental standards and dumping claims.
Textile exports from developing countries still fall under import quotas that are supposed to be eliminated by 2005. According to Abdel-Hamid, developed countries have begun liberalising areas where there is little value-added for developing countries, while postponing those of importance to developing countries to the last stages.
With such issues unresolved, developing countries believe the provisions of the Uruguay Round need revisiting. Developed countries, on the other hand, are against the idea of re- negotiation. They believe adjustments could be dealt with in the framework of a new round.
The agenda of a new round is very broad, according to Abdel-Hamid. First there is the built-in agenda, which includes the liberalisation of agriculture and services. The new round should aim at lifting tariff and non-tariff obstacles to agriculture, as well as export subsidies. "As much as this is important to food exporters, the interests of net food importers should not be overlooked and they should be granted technical and financial assistance," he said.
Abdel-Hamid said developed countries should open up their markets to labour from developing countries and avoid placing domestic restrictions that could stand in the way of the sector's liberalisation.
The recent attacks on the US may hamper the free movement of foreign labour into developing countries.
"It is too early to tell how the 11 September event will affect the politics surrounding this issue," Feketekuty said, adding that while there has been a great deal of tightening of border security controls, there have been no moves yet to restrict visas for foreign workers.
Prior to 11 September, there was increasing support from key US companies -- who wanted better access for their managers and professionals to service foreign investments -- for an agreement on labour mobility. "With the falling demand for foreign investment, they may no longer press the issue," he said.
Besides the built-in agenda, developed countries want to take tariff cuts on industrial goods to new levels. During the Uruguay Round, each country committed itself to specific tariff cuts on each product. Developed countries, however, want tariffs to be cut uniformly across the board by all members on any one item in the new round.
Abdel-Hamid believes that such an agreement would not be favourable for Egypt and suggests that Egypt give itself time to study the matter. "Even if Egypt does not sign, it will end up enjoying the same benefits," he pointed out.
Four other issues on the agenda are investment policy, competition policy, transparency in government procurements and trade facilitation -- all suggested during the Singapore ministerial meeting in 1996. "Developing countries believe most of these issues need to be further studied before any commitments are made. Their acceptance will depend on what issues could be traded against them," said Abdel-Hamid. Moreover, he believes it is important that these matters are linked with development.
A number of new concerns are also to be proposed in a new round. These include trade and environment, e- commerce and labour standards.
Developing countries fear that environmental standards, such as eco- labelling, will keep their products from entering the markets of developed countries. "The trade-related impact is tough and developing countries cannot cope with either the technology or the financing to meet these requirements," said Abdel-Hamid.
As for the labour standards, developing countries believe this would be another obstacle to their exports and that labour issues should only be tackled within the International Labour Organisation. "This is an issue that developing countries will not bargain over," Abdel-Hamid stressed.
With so many issues at hand, it remains to be seen how things will turn out, especially with the advent of China to the WTO. Abdel-Hamid is hopeful that China's accession may add a negotiating weight to developing countries. However, he pointed out that China has become highly industrialised and might have the same interests as developed countries in wanting to open up markets for its products. On the other hand, on issues such as the environment and labour standards, "China could make a difference for developing countries."
Feketekuty, on the contrary, does not think China will have a large impact on the WTO. "China has already been participating in meetings for more than 10 years and they had a full right to intervene in meetings, even if they could not formally affect decisions," he said.
He explained that since the WTO works by consensus, China would be merely one more voice.
Recommend this page
© Copyright Al-Ahram Weekly. All rights reserved
Send a letter to the Editor