Crushing imbalance
Montasser Fathy Ahmed* lashes out against a world trading system that favours developed economies, and looks beyond the failed trade talks
Stubbornness by the WTO's powerful developed country members sunk the Cancun ministerial conference. No progress was made in these multilateral trade negotiations. Though the preparatory meetings held in Geneva witnessed sharp polarisation in the negotiating positions of developed and developing country members, developed country members, holding the reins of the multilateral trading system, did nothing to avoid reaching such a disappointing result.
Blinded by their arrogance and shortsightedness, developed country members failed to realise that developing countries believed with conviction that they had nothing to lose from the collapse of the Cancun negotiations. In fact, the failure of the ministerial conference can be attributed to the fact that developing country members felt they were invited to Cancun only to willfully participate in the new round of negotiations, regardless of the extent that their interests were factored into these negotiations. Developed country members went to Cancun confident that they would easily persuade developing country members to rubber-stamp the items on the developed countries' agendas.
Developments before and during Cancun underscore an acute and sophisticated crisis faced by the world trading system. Overriding the long-term depression in some countries and economic slow down in others, developed country members insisted on imposing more and more market access commitments on developing country members. At this stage, increasing the levels of liberalisation and expanding market access -- accompanied by the question of this goal's attainability through steeper tariff cuts -- are certainly core concerns for developed country members.
In the same context of seeking market access, we notice the pressure applied by developed countries on developing countries to commence negotiation on the "Singapore issues".
The goals of the "Singapore issues" -- transparency in government procurement, competition, trade facilitation, and trade and investment -- suggest that concluding specific commitments along these lines will enable, at least in the medium and long terms, a greater number of economic groups to totally control both markets and policy-making processes in developing countries.
It should be kept in mind here that developed countries have all the necessary tools to affect and control markets and policies in poor countries, especially in the import and export field and in the nexus of agreements governing foreign investments, the operation of transnational corporations, international funding and economic assistance provided to developing countries.
On the other side, we find that developing countries which have largely modified their rules and policies to bring their own trade regimes into conformity with the provisions of the various WTO agreements, have started to realise that the multilateral trading system is a chimera.
While developing country members have bought into the world trading system, they have realised after a full decade that they have offered much and received very little in return.
Thus, it has now become very clear that the key to the crisis of the world trading system involves exercising pressure on developing countries to open their markets and liberate their trade in return for empty promises as well as meaningless and deceptive declarations in WTO legal texts or from ministers.
This opinion is not mere allegation. It is based on and supported by objective reports and research that confirms that developing country members seldom benefit from the special and deferential provisions provided for in WTO agreements and the Marrakech Ministerial Decisions.
Again, follow-up to what happened in Cancun reveals that developed country members, especially those from the European Union and the United States, still refuse to eliminate the distorting agriculture subsidies and will not offer poorer countries actual market access. In addition, developed country members insisted that tariff barriers on industrial products should be reduced or even eliminated at a uniform rate, irrespective of differences in industrial capabilities between developed and developing countries.
How would a plan for the future look? Doubtless, this answer is critical both nationally and internationally.
At the international level, the multilateral trading system cannot continue in the future without genuine reform. In my view, the core feature of such proposed reform takes into consideration the interests of developing country members by enabling them to attain actual access to markets in developed countries. In brief, the multilateral trading system needs to be changed to be beneficial for all parties concerned.
At the national level, all efforts should be made to develop quality control. This would promote the competitive advantage of Egyptian products in such a way as to enable our producers and exporters to easily penetrate foreign markets.
Egypt could seek fresh market access through bilateral or even regional arrangements. Consideration should be given to provide new markets with quality commodities and services at competitive prices. In this regard, quick and decisive steps should be taken and new policies should be implemented to facilitate and attract foreign investments, to promote the quality of our educational output and to eliminate all financial and administrative obstacles hindering the production and export sector.
Without a radical increase in both production and exports, Egypt will fail to find its niche in foreign markets, especially in the current context of frantic competition among countries.
* The writer is International Trade Law Senior Researcher in the Central Department for the WTO at the Ministry of Foreign Trade. The views expressed in the article are the author's and do not necessarily reflect those of the ministry.
