 |
Al-Ahram Weekly 9 - 15 December 1999 Issue No. 459 
|
||
Published in Cairo by AL-AHRAM established in 1875 |
| ||
|
Al-Ahram Weekly 9 - 15 December 1999 Issue No. 459
|
||
| Published in Cairo by AL-AHRAM established in 1875 |
| ||
Egypt Region International Economy Opinion Culture Debate Features Profile Living Travel Sports People Time Out Chronicles Cartoons Letters Conflicting agendas
By Ibrahim Nafie
The World Trade Organisation (WTO) ministerial meetings dramatised the fissures that exist over free trade. As the world's economic giants asserted their respective interests, developing nations clamoured on the sidelines, painfully aware of the belated nature of their attempts to ensure that future economic relations took account of their own fundamental concerns. Simultaneously, as massive protests unfolded during the meetings, the public became aware of the complex web of issues wrapped around the seemingly innocuous term free trade.
The deregulation of trade in agriculture, the elimination of tariffs on manufactured goods, especially textiles and clothing, and anti-dumping regulations were among many vital issues on the WTO agenda.
Controversy over the deregulation of trade in agriculture dates from the GATT agreement signed at the conclusion of the Uruguay Round. The GATT package pertaining to agricultural trade introduced significant reductions in subsidies on domestic agricultural products and in tariffs on agricultural imports. This partial deregulation of agricultural trade, though, was virtually ignored by industrialised nations which continued to erect barriers against the agricultural exports of developing nations, and even other developed nations, while subsidising their own agricultural exports. According to Oxfam International, industrialised nations subsidise their agricultural exports to the tune of $350 billion per year, thereby ensuring their hegemony in international markets.
The deregulation of agricultural trade saw the US and Australia pitted against Europe and Japan. The US and Australia are seeking an end to all forms of agricultural protectionism. The EU and Japan believe that this sector of the economy should be accorded special treatment, given its social and environmental implications.
Although the EU Commissioner for Agricultural Affairs declared that the EU was prepared to reach a comprehensive agreement over agriculture, he insisted that such an agreement must link freedom of investment and competition to the preservation of various farming patterns and food security. This linkage indicates that the EU, a staunch advocate of the deregulation of trade in industrial manufacture has no desire to see the same standards applied to its heavily protected agricultural industries.
The battle of wills over the deregulation of trade in agriculture resulted in numerous displays of pique. The French, in particular, charged that the US championed free-trade only when it suited its priorities, pointing to a recent American ban on French wines and cheeses on the grounds that they did not conform to US standards. Many developing nations, on the other hand, support the US stance on free trade, in spite of its inconsistencies.
Since the implementation of GATT in 1995 there has been no progress in eliminating trade barriers in the textile and clothing industries. Even though the GATT agreement instituted a gradual phase out of the quota system and a gradual reduction in textile and clothing import tariffs, many industrialised nations still maintain import barriers. Although Egypt naturally has its own apprehensions regarding the deregulation of the textile and clothing trade, we should also be wary of our inclination to rely on the industrialised nations' continued reluctance to fully deregulate this sector. That deregulation is coming, whether we like it or not, should spur us to rejuvenate this sector with an eye to enhancing the quality of its products. Low labour costs in what is a labour intensive industry will certainly work to our advantage in international markets.
Anti-dumping measures have been the focus of considerable acrimony among the industrial powers. Japan has accused the US of excessive and selective use of such measures to protect its own industries. In response to the Japanese demand that the US revise its anti-dumping regulations, the US under-secretary of trade accused the Japanese of undermining the spirit underlying the entire round of talks. The US was reluctant to put anti-dumping on the Seattle agenda for fear of alienating the powerful US manufacturing and businessmen's federations and labour unions. Regardless of these reservations, tighter definitions of anti-dumping regulations should have been included in the talks. That all nations take recourse to measures to protect their markets from dumping makes clear standards of application and abuse all the more imperative.
One item the US did press to include in the WTO agenda was to seek ways to incorporate labour standards into WTO agreements. US proposals in this regard were rejected by developing nations whose relatively low labour costs enhance the competitivity of their products in international markets. It is little wonder, therefore, that developing nations see the US attempt to link deregulation with labour rights as a guise to protect its own industries and that they welcomed the statement distributed by UNCTAD during the WTO conference urging developing countries to lobby against incorporating labour standards into the next WTO round.
The most impressive feature of the WTO conference took place away from the negotiating tables. Public mobilisation surrounding the conference, staged by environmental groups, labour organisations and a host of NGOs in the US and Europe, was of such a scale that the US secretary of state released a statement assuring that the protesters' demands would be taken into account. While many of their demands do not necessarily reflect the concerns of the developing nations, they serve to underscore that the governments of industrialised nations, in their single minded assertion of the imperative of free trade, have ignored principles of fairness and balanced national and international economic development. For the developing world, and Egypt above all, this reality should spur us to enhancing our performance in defending our economic and commercial interests. But by no means can this entail a return to protectionist measures that eliminated incentives, distorted the manufacturing base and led to local consumers paying through the nose.
