Lack Of Flexibility By Developed Nations Holding Back Progress Within WTO, Says Official

Lack Of Flexibility By Developed Nations Holding Back Progress Within WTO, 
Says Official 
 
11 August, 2003  
 
Lack of flexibility by developed nations is holding back progress on 
agreements that would help developing countries benefit from a liberal 
multilateral trade regime, Associated Press (08/08) notes an official from 
the WTO said Friday. 
Shisir Priyadarshi, a counselor at the WTO secretariat in Geneva, said 
negotiations since the Doha meeting have not made headway because "the 
developed countries are not ready to accept any change in the existing text 
(of the WTO agreement)." "Linkages between progress in different areas and 
differences in priorities of developing countries have also contributed to 
the delay," he said.

The Hindu (India, 08/10) notes that the Indian government has initiated the 
process of consultations with trade unions in the run-up to the 5th 
Ministerial Conference of the WTO at Cancun. During his interaction with the 
representatives of the various trade unions, the Commerce Minister, Arun 
Jaitley, assured the unions that the views expressed by them would weigh very 
substantially with the Government in formulating its negotiating positions. 
He also made it clear that national interest would be of paramount importance 
for India in all key areas of negotiations.

Meanwhile, the Belfast News Letter (08/09) reports that the EU’s Common 
Agricultural Policy had been unfairly blamed for problems in developing 
countries, Irish Farmers' Association president, John Dillon, has claimed. 
"The reality is that the EU offer on agriculture in the WTO negotiations goes 
a very long way to meet the interests of the developing countries," he said. 
Dillon said that the alternative to the EU strategy was the 'globalization' 
strategy of the Cairns group of countries and the US to some extent, which 
would be extremely negative for both the developing countries and the EU.

"The EU is by far the largest importer of agricultural products from 
developing countries. It has offered full and free access to all imports from 
the 49 least developed countries of the world under the 'Everything but Arms' 
deal, and is proposing that all other developed countries do likewise," 
Dillon said. Further, a report in the National Journal notes that the CAP is 
the most expensive farm program in the world. In 2002, the EU gave its 
farmers $101 billion in direct aid, according to the Organization for 
Economic Cooperation and Development, the Paris-based think tank for 
industrial nations. By comparison, the United States provided its farmers 
with $40 billion in farm support.

On the other hand, Interfax (08/08) notes that if Ukraine fails to pay its 
debt to Kyrgyzstan, totaling about $27 million, Kyrgyzstan will object to its 
admission to the WTO, Andrei Iordan, an advisor to the Kyrgyz prime minister, 
told Interfax on Friday.

AFP (08/10) reports that some 100,000 people attended an "anti-globalization 
Woodstock" in southern France overnight Saturday, with controversial 
eco-warrior Jose Bove leading the mass opposition to crucial WTO talks in 
Mexico next month.

Meanwhile, US Trade Representative Robert Zoellick writes in an op-ed in La 
Tribune (France, 08/11) that the US is fully committed to completing the Doha 
Development Agenda by the agreed deadline of 2005. America's goal in the farm 
negotiations is to harmonize subsidies and tariffs while slashing them to 
much lower levels, on a path toward elimination. [Also,] the American 
proposal for manufactured goods would free the world of tariffs on these 
products by 2015. With zero tariffs, the manufacturing sectors of developing 
countries could compete fairly.

Zoellick further writes that the US will work with [its] FTA partners—through 
USAID and with the multilateral development banks—to link liberalization to 
sectoral reforms. For example, we have been discussing with Morocco how to 
support its shift, backed by the World Bank, from the production of cereals 
to fruits and vegetables for export, he writes. For Southern Africa and 
Central America, our FTAs can encourage regional integration, the reduction 
of local barriers to regional competitiveness, the development of a larger 
market for investment, and greater political cooperation. Many other 
countries are working with us on market and trade reforms simply to prepare 
for an FTA.

Nobel prize laureate Joseph E. Stiglitz writes in an op-ed in Les Echos 
(France, 08/11) that one could expect developing countries to be eagerly 
awaiting the Cancún meeting to begin, since they should be confident that it 
will lead to a fairer international trade system. Instead, many of them fear 
that past mistakes will be made again: secret negotiations, pressure and 
bullying from dominant economic powers such as the US and the EU, as well as 
lobbying from private interest groups. The whole affair might then be reduced 
to an offensive by developed countries to foster their own interests. 
Stiglitz further writes that inherently unbalanced processes cannot but 
produce unbalanced results. Ironically, the WTO, within which every country 
holds one vote, could look more democratic than the IMF, whose decisions may 
be potentially vetoed by the US. Yet, past experience shows that nothing can 
actually wear down the leadership exerted by developed countries.

Rick Lazio, president of the Financial Services Forum, writes in the New York 
Times (08/09) that free trade of agricultural products isn't the only way to 
help poor countries—easing their restrictions on foreign financial services 
can also help them find a way out of poverty. The World Bank has compelling 
evidence that competition in financial services creates stronger domestic 
capital markets in developing nations—more efficient capital allocation and 
more access to banks, securities firms and insurance providers for businesses 
and individuals are sure ways to speed economic growth.

Meanwhile, New York Times (08/11) writes in an editorial that the EU's 
extravagant contortions to remain in the sugar business may be the hardest of 
all its farm policies to defend, much like the US’ irrational protection of 
its cotton growers. Europeans should not allow their farm lobbies to hijack 
the union's policymaking and obstruct a new trade deal that could bring hope 
to poor countries living in despair and strengthen the credibility of a 
global trading system that has helped Europe prosper. Lifting farm subsidies 
will surely be a gradual process, but Europe must start reining them in and 
stop dumping its surplus harvests below cost on world markets. Kicking the 
sugar habit would be a good place to start.
 


SOURCE: World Bank Press Review