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Al-Ahram Weekly 19 - 25 August 1999 Issue No. 443 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 19 - 25 August 1999 Issue No. 443
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports Time Out Chronicles Cartoons Letters Wary of Seattle
By Niveen WahishA new round of World Trade Organisation (WTO) talks is scheduled to be launched in about three months in Seattle. It is now five years since the signing of the Marrakech agreement which concluded the seven-year-long Uruguay Round of multilateral trade negotiations. The aim of the new talks, dubbed the millennium round, is to take the results obtained at Uruguay a step further.
"When we adopted the conclusions of the Uruguay Round in 1994, we knew that we would have a new round," said Ambassador Magda Shahin, deputy under-secretary of foreign affairs for international economic relations. However, some countries did not expect it to take place so soon.
Developing countries in particular believe the new round is premature, especially since some of them have not yet fulfilled the obligations to which they committed themselves in the Uruguay Round. Moreover, they are largely dissatisfied with the results of Uruguay. The less developed states believe that developed countries have not stood by their promises to open up their markets to exports from developing nations.
"Developing countries have come out of the Uruguay Round exhausted," said Shahin, largely because the results placed too many obligations on them. Developing countries not only committed themselves to liberalising their trade in goods, but were also exposed to a whole range of new issues such as the protection of Intellectual Property Rights (IPR) and liberalisation of services, agriculture and investment.
Nevertheless, timely or not, a new round will be held. "Developed countries are pushing for the new round of negotiations," said Shahin.
In fact, Sir Leon Brittan, vice-president of the European Commission, was in Cairo early this summer to convince Egyptian officials of the importance of the new round of global trade talks. At that time, he said the only way for developing countries to put right whatever they are dissatisfied with that emanated from the Uruguay Round is by participating in the new round.
But the Seattle round will not only provide an opportunity to file complaints. A series of issues carried over from Uruguay will need to be addressed as well as a number of new proposals. The agreements reached in the Uruguay Round on IPR, agriculture and service issues were only a start and they stipulate that these sectors must be further liberalised, Shahin pointed out. "These are the bases of the new round, the built-in agenda," she added. Other issues almost certain to be raised are competition policies, regulations on Foreign Direct Investment (FDI), Electronic commerce and labour and environmental standards. Another big issue which developed countries will try to push is further elimination of tariff and non-tariff barriers by developing nations.
Even though there is a long list of issues to be discussed, Shahin is confident that Egypt and other developing countries will not be duped into signing anything of which they are not convinced. "Now we are more mature," said Shahin. She said that many of the weaknesses of the Uruguay Round were due to the fact that developing countries did not have much previous negotiating experience. As a result, developed countries had the upper hand. "They knew what they wanted, they knew how to phrase it and get real commitments from developing countries," she said. Today when developed countries are blamed for not fulfilling their commitments to the developing states, "they always claim that they implemented the agreement according to the book," Shahin said. "Of course, they were the ones to write the book."
Developing countries have learned their lesson. They now know which demands they will be putting forward and which proposals, such as further tariff reductions, they will fiercely resist, according to Shahin. "We believe that we have decreased our tariffs considerably in the framework of the Uruguay Round, and we are not ready to be pressured into decreasing them further according to a set deadline without taking our time," she said. This is in line with the Egyptian government's espousal of a gradual approach in implementing its structural adjustment programme.
Not only are further tariff reductions shunned by Egypt and developing countries, but they will be demanding more time to build up the capacity of their industries in order to be on an equal footing with developed nations. "Now even when they open their markets, we cannot compete," she exclaimed.
Another issue which developing countries feel must be readdressed concerns the protectionist measures developed countries have introduced. These innovations include environmental and labour standards as well as anti-dumping measures that have been used to block exports from developing countries. Shahin believes that developed countries need to take into consideration the economic conditions of developing countries before imposing anti-dumping duties on their goods or blocking the entry of their exports because of non-compliance with environmental or labour standards. She suggested that more technical assistance is needed to help developing countries adjust to these new requirements.
Still another issue for which a solution must be found is the negative effect of the liberalisation of agriculture on net-food importing countries because agricultural prices will increase. "Developed countries have to find a way of easing this burden on such countries," said Shahin. Practical measures to alleviate the burden of higher food import costs on developing countries must be included in any new agreement -- an element that was absent from the Marrakech agreement.
Egypt has set up a national committee to prepare for the Seattle round, but it has not forgotten the private sector. In fact, Shahin stressed that the private sector has to recognise the importance of the WTO rules for its businesses. "Whatever we negotiate as government representatives, finds its way to businessmen," she said. In this regard, she insisted that the private sector take an active role in shaping the upcoming negotiations by informing the government of its demands and the extent to which it may be willing to make concessions.
Shafiq Gabr, chairman of Artoc Group, is one businessman who is positive about the upcoming talks. Surprisingly, he thinks that the new round is very timely. Gabr said that the world today is moving at a much faster pace than ever before. An example of this, he said, is that in the past it took an average of 20 to 25 years to develop a product from concept to commercialisation. Now the time required averages 18 months.
"It is critical to have periodic discussions regarding trade issues" in order to keep up with any unpredictable changes such as the international financial crisis in Southeast Asia which started in 1997, Gabr said. Such critical issues need to be discussed in multilateral trade talks, he added.
However, while he approves of the timing of the Seattle meeting, Gabr stressed that the interests of developing countries should be given equal consideration with those of developed countries.
Although he is an open-minded businessman who approves of further tariff reductions because he said they would benefit the consumer, Gabr remains adamant that the outcome of the millennium round needs to be "a win-win formula" in which both developing and developed countries gain something or at least benefit from "trade-offs".
He called for elimination of tariff and non-tariff barriers which would provide greater accessibility to developed markets, not only for industrial goods but also for processed agricultural goods and textiles, sectors in which developing countries hold a competitive advantage.
And since developed countries are calling for free movement of capital, they should also allow free movement of labour across their borders, Gabr said.
Regarding the environmental standards called for by developed countries, he said that these states were the biggest polluters of the environment. "So for them to put this component in the formula now is a zero-sum situation."
"Unless there are economic benefits to developing countries equal to those enjoyed by developed countries, then the whole [WTO] process is not going to survive," Gabr concluded.
