Globalization's Also-Rans Ought to Be Scrambling on Board
Philip Bowring International Herald Tribune
Wednesday, May 2, 2001
GENEVA Speak up, developing countries. Stop dwelling on past inequities and recognize where your future interest lies. The World Trade Organization badly needs political backing if its November ministerial meeting in Doha, Qatar, is not to end in a Seattle-style flop, without the riots.
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That means getting an agenda for a new round of negotiations on liberalization agreed upon by the end of July. That in turn means capitals giving their ambassadors in Geneva authority to stop wrangling over obscure points and cut deals. Or perhaps Director-General Mike Moore and his successor Supachai Panitchpakdi should not wait for a consensus but hammer out what they see as a workable agenda and persuade states to sign up.
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For sure, nothing can happen without the European Union and the United States. Both are in theory in favor of a new round but have concerns, about labor rights and competition policy in particular, that go beyond what is acceptable to others in a body where decisions are reached by consensus through horse-trading.
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A consensus now among major developing countries about the need to press ahead would improve the chances of the round taking place and put them in a stronger position to influence the outcome.
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Developed countries are dragging their feet partly because they see no domestic political advantage. The anti-globalization protests in the West may not have mass support but they have made governments defensive. The developing world needs to dissociate itself as far as possible from anti-WTO activists in rich countries, the protectionists who masquerade as supporters of the poor under the guise of defending labor rights and the environment.
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Developing countries' wariness of the WTO is understandable. Many are still bogged down trying to figure out, let alone carry out, some of the Uruguay Round commitments. They continue to resent the shocking distortions of farm trade, to be harassed by developed countries' anti-dumping measures, to resent the persistence of protectionism on textiles, in which they are strong, while being forced to open up service industries in which they are weak. They rightly blame over-rapid liberalization for financial sector instability. They resent the lack of input that they have had into past rounds.
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But they still have more to gain than to lose. They, not the demographically challenged old rich, are the future of world trade growth.
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The WTO is not an organization that can stand still. Either it progresses or it retreats. Moving now is important because conditions will probably become less favorable.
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If the United States goes into recession, trade tensions will increase. Next year elections are due in many rich countries that will delay decision-making. China should finally be a WTO member, and its huge presence will make consensus more difficult.
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Now is a good time because agricultural disasters have made it easier for Europe to accept the need for radical policy reform. Meanwhile, European business, as represented by the European Roundtable of Industrialists, recently told a meeting of the Evian Group, a high-powered trade policy forum, that it favored a new round even if the agenda is not as comprehensive as Brussels has demanded.
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Some of the more influential developing states ought to have particular reason to want a new round without waiting for issues left from Uruguay to be resolved. One reason is the forward march of regional pacts, which may have a trade liberalizing effect but will be dangerous if the WTO agenda cannot keep up.
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That would be particularly damaging to some influential players. India belongs to no significant regional grouping. Brazil, given the importance of its trade with Europe and South America compared with that with North America, should be more interested in global arrangements.
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East Asian countries may hanker after an Asian regional bloc, but, given Japan's negative stance and China's dependence on the U.S. market, it is unlikely to emerge. Asians anyway need global markets where their competitiveness can shine.
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It should not be beyond the wit of WTO delegates to construct a realistic agenda. Labor and environment could get a mention - but subservient to the respective UN bodies which deal with them. Complex new issues like competition policy could be left to major developed countries to discuss among themselves.
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Freer trade in goods is irrelevant to many developing countries which lack the means to participate. But for the majority who do, China most conspicuously, it is time to take a more forceful and flexible approach to see that the West does not let the WTO process stall.

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