HONG KONG: If global trade talks in Hong Kong collapse, analysts fear the world risks being plunged into an era of escalating protectionism with huge consequences for commerce, the economy and the poor.
At stake is the Doha agreement on tariff and subsidy reductions which would open the world’s richest markets to the poorest, particularly in agriculture, and in turn alleviate poverty and the ever growing wealth gap.
In a worst case scenario, failure at the WTO’s Sixth Ministerial Conference in Hong Kong between December 13 and 18 would result in the Doha round failing to meet its implementation deadline set for the end of 2006.
British Prime Minister Tony Blair has warned failure at the World Trade Organisation summit would hurt both Western and developing economies alike, particularly in Africa, which he has made a key theme.
Asian Development Bank president Haruhiko Kuroda says failure will seriously impact on economic growth in Asia, and WTO chief Pascal Lamy says an impasse will damage the WTO’s credibility and make it hard to start fresh negotiations.
None of them want to see a replay of the last ministerial meeting in the resort of Cancun, Mexico in 2003.
That conference adjourned in acrimony with the WTO’s poorest members claiming they were being short-changed by developed nations who demanded access to their markets for goods and services but offered little in return.
Mindful of a possible repeat, world leaders have recently sought to play down the chances of a major push towards a Doha conclusion in Hong Kong.
Instead, the criteria for success is now being measured through brokering a trade deal to help developing nations.
If such a deal was possible it would require compromise and moderation from all 148 WTO members, with some agreement to allow developing countries access for their agricultural products to the world’s richest nations – the US, Europe and Japan.
It would also help offset dependency on aid, which has been touted as a possible substitute for poorer nations if they are denied access to the rich markets in the West. It is an approach which has not found favour.
“We don’t want charity,” Barrat Jagdeo, president of the struggling South American country of Guyana, lamented recently after a round of trade talks among Commonwealth countries.
Few expect the US or EU, particularly, to grant any major concessions. Washington and Brussels can also count on Tokyo and Seoul to scuttle any such deal due to the cultural and political clout of their farmers at home.
“A complete breakdown of the WTO Hong Kong Ministerial – no agreement whatsoever – will spur members to cut their own bilateral or small group deals,” said David O’Rear, chief economist for the Hong Kong General Chamber of Commerce.
Those deals are already in the pipeline with WTO members preparing a fall-back line in case of a Hong Kong failure, shoring up their own free trade agreements (FTAs) and regional trade deals.
This attitude was highlighted at a recent Asian trade meet where one senior diplomat cited the increasing frustrations of former WTO chief Supachai Panitchpakdi, who had often complained about the slow pace of reform.
“Panitchpakdi always maintained if countries and regional blocks put as much effort into reforming the World Trade Organisation as they did with Free Trade Agreements (FTAs) then Doha would have been a success,” he said.
Lamy took over the WTO helm from Panitchpakdi in September last year and watched on as members relentlessly pursued their own trade agendas.
South Asia, Southeast Asia, the Pacific Rim, the Americas, Europe, the Islamic world, sub-Saharan Africa, Commonwealth and Francophone countries have all struck there own regional and independent national trade agreements.
In short, WTO members are already primed for the worst case outcome in Hong Kong although not everybody is totally pessimistic.
“There is likely to be some agreement, however thin, but the trend toward regionalisation and away from global multi-lateralism is going to be very hard to reverse,” O’Rear said. – AFP
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