The 6th WTO Ministerial Conference is being held in Hong Kong this week while the first East Asian Summit began in the Malaysian capital of Kuala Lumpur yesterday. Indirectly, these two meetings provide clues to the direction that future development trends of the global economic and trade system will take, and this is something that we should pay close attention to.
The WTO conference is basically a mid-term report on the Doha Development Agreement (DDA). In November 2001, the 4th WTO Ministerial Conference held in the Qatari capital of Doha reached an agreement to complete a round of multilateral trade talks by this New Year's Eve.
The 5th WTO Ministerial Conference held in Cancun, Mexico, in 2003, ended in massive defeat. Not only did the conference fail to provide the political support required for further talks in accordance with the schedule agreed to at the original talks, but disagreements between member countries regarding core issues and protests by non-governmental organizations caused the meeting to end in failure.
The Hong Kong conference has been forced to deal with the fallout from the delayed DDA. Having learnt from their previous experience, participants are taking a very cautious approach and are trying to build a concession framework and to reach a fundamental consensus on issues included in the July Package agreed on Aug. 1 this year. This package deals with contentious issues such as agriculture, the service industry, the entry of non-agricultural product markets, trade rules, and privileged and differential treatment.
Since then, WTO member states have been involved in intense negotiations, but although a concession framework has been established, they have not been able to agree on concession method and extent. To avoid a repeat of the Cancun conference, everyone is treading carefully at the Hong Kong conference.
Having said that, however, groups of WTO member states are banding together in a development that has complicated matters. Deep contradictions exist between developed and developing countries, and even the US and EU have ulterior motives and are plotting against each other.
The first East Asian Summit (EAS) is being attended by 16 states -- the ASEAN member states plus China, Japan, South Korea, Indonesia, New Zealand and Australia -- ?and this meeting cannot be compared to the 149 WTO member states and their "economic United Nations."
The EAS symbolizes the first step toward East Asian regional integration. The transformation from purely conceptual "East Asian Community" or "East Asian Free Trade Area" to taking real action is undoubtedly a great shock to the international community, since the region represents more than half the global population and a GDP of more than US$8 trillion, far more than the EU or the American Free Trade Area that the US is currently working hard to promote.
Compared to the hesitancy of the WTO, the EAS has begun by proposing a progressive and highly stimulating vision. This comparison in fact reveals an increasingly obvious fact: the decreasing influence of the US.
It cannot be denied that the US was the leader of the "free world" during the General Agreement on Tariffs and Trade (GATT) period, the precursor to the WTO, and it is only natural that it was the leader and arbiter of international economic order. The US was immensely pleased with the collapse of communism and its leader, the Soviet Union, and Washington believed that the capitalist free market system had become the only option. In 1995, GATT was successfully transformed into the WTO and became the monitoring body of the free market and the leader of globalization.
After the founding of the WTO, attempts were made to set up an ambitious millennium meeting at the turn of the century. Unexpectedly, anti-globalization activists from around the world converged on Seattle for the 3rd WTO Ministerial Meeting there in 1999, and the millennium meeting ended amid protests and bloodshed. The Doha Development Agreement passed in Doha in Qatar in 2001 also encountered problems in Cancun in 2003.
Over the past five years, both regional trade agreements (RTA) and free-trade agreements (FTA) have become popular. These kinds of multilateral or bilateral trade agreements have led to the appearance of several new groupings of countries and this has led to a completely new world view compared to the old uni-polar world led by the US.
The first EAS is a good example of this process. The ASEAN member states have deliberately excluded the US, and the wave of de-Americanization and anti-Americanism that has passed through both Latin America and the Middle East seems to be headed for Asia.
Taiwan should pay attention to these developments. Taiwan has been trying to sign FTAs with several countries over the past few years, but the results have been extremely limited. Apart from FTAs inked with diplomatic allies Panama and Guatemala, all other attempts have come to naught, and discussions with the US and Japan seem to be even more difficult.
Taiwan is an Asian state, but the risk is that Taiwan will become even more isolated in the unifying Asian world that will follow once the EAS has established the direction of RTAs.
We can no longer blindly follow the US, but should be sensitive to realignments in every region throughout the world.
Lai Shin-yuan is a Taiwan Solidarity Union legislator.
Translated by Perry Svensson
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