Time to take stock
The upcoming WTO meeting in Cancun must take a step back and look at the present distortions in world trade, writes Montasser Fathy Ahmed*
According to the agreement establishing the World Trade Organisation (WTO), the Ministerial Conference is designated as the supreme WTO body and has decision-making powers on all matters relating to any of the multilateral WTO agreements. On the basis of this capacity, top-ranking government officials will meet in the fifth ministerial conference to be held from 10 to 14 September 2003 in Cancun, Mexico. In light of concerns raised by the WTO's General Council, the conference in Cancun will discuss different issues relating to global trade movement, particularly the outcome of negotiations launched by the previous ministerial meeting in Doha in 2001.
While the conference of November 2001 had been held in the aftermath of the 11 September attacks, which had indirect economic repercussions harming countries around the world, the coming meeting in Cancun is to be held in the wake of the Anglo-American invasion of Iraq, which has led to increased uncertainty over the future of the Middle East. Many worry that the Anglo-American occupation is only the first step in the systematic elimination of regimes unfriendly to the United States. It goes without saying that further attacks, and even just the anticipation of such turmoil, will have a powerful effect on international trade.
Seeking to make up for the failures of the rowdy 1999 WTO conference in Seattle, in Doha ministers decided to launch a new round of negotiations covering a wide range of issues, particularly those known as "Singapore Issues": transparency in government purchases, trade and investment, competition and trade facilitation. The ministerial conference in Cancun will act as a mid- term review, a chance for governments to assess progress in such negotiations and make a realistic assessment of achievements and make decisions on some issues, particularly "Singapore Issues".
Although the work programme of Cancun is not as lengthy as the agenda of Doha in November 2001, the conference in Cancun will in itself constitute a symbolic milestone in the evolution of the multilateral trading system, but must tackle the following weighty issues:
1- In the light of its current conditions or status, we can declare that the world trading system has suffered from a chronic imbalance or rather an inherent contradiction. Developing country members within GATT have joined this multilateral trading system in the hope that their membership would enable them to avoid discrimination, to enhance their marketing chances in key export sectors and to acquire rights to defend their interests in that multilateral framework. However, nearly one decade after the establishment of the WTO, export sectors of special interest to developing countries (agriculture and textiles) remained highly protected and closed by developed countries. In spite of that situation, developing countries are being pressured to accept more and more commitments to liberalise, in addition to the Uruguay Round commitments, whether in the context of current negotiations, or on the expected negotiating tracks after Cancun conference. Thus, the current imbalance in the world trading system reveals that the system is facing a very deep and acute crisis and that the future of the system as a whole depends on the way in which this contradiction is treated.
2- The world trading system has demonstrated so far that it is not unequivocally in the interest of all country members, or at least has demonstrated that it does not do all country members justice. Developed countries exert pressure and offer small rewards for developing countries to bear the pain of rapid adjustment as an unavoidable side effect of joining the world trading system, and these developing countries have fulfiled their burdensome commitments with regard to opening their markets. However, up till now such countries have yet to reap the benefits from deferential obedient, where all what have been done has no effect on the GDP in developing countries. On the other hand, we found that developed countries, in spite of yielding to domestic political pressure and dodging their commitments under the WTO's requirements, they have enjoyed the fruits of the liberalising of world trade.
3- While, as mandated by ministers in Doha in 2001, negotiations were conducted on many tracks with the aim of improving and amending some of the WTO agreements, such as the Agriculture Agreement, Subsidy and Anti-dumping Agreement and the TRIPS Agreement, observers have noted that the most of those negotiating tracks either wholly failed or achieved insubstantial progress.
4- As a negotiating power, particularly in the context of the multilateral trading system, developing countries could be described as a fragmented party. This arises from the fact that the issues of concern to developing countries differ widely from one country to another, due to variety in the rates of development achieved and the numerous struggles and challenges present. There is no doubt that being a fragmented party, developing countries do not have the ability to draw common negotiating positions. In spite of the fact that the integration of developing countries into the trading system is not necessarily beneficial to the poorer countries themselves, the developing countries are unable to unite in resisting pressure from the industrialised world to carry out more unilateral, unbalanced liberalisation.
Hence, there are some factors that constitute challenges and obstacles currently facing the multilateral trading system and that could undermine the system itself in the future unless they are properly addressed. On the other hand, it could be said that the opportunities which the system would provide to its different parties will depend on the way within which both developing and developed countries will behave in the immediate future. Whether during or after Cancun, developing countries need to be more courageous in turning the tables and applying pressure on the developed countries to fulfill their unkept promises for liberalisation. For their part, developed countries need to allow developing countries to obtain more access to their markets to expand their genuine, mutually beneficial participation in the trading system.
* The writer is International Trade Law senior researcher in the Central Department for WTO, Ministry of Foreign Trade.
Al-Ahram Weekly Online : 21 - 27 August 2003 (Issue No. 652)
Located at: http://weekly.ahram.org.eg/2003/652/ec4.htm