Axworthy urged Taiwan to focus on its adjustment to WTO rules and its strategic role in WTO trade talks by identifying the areas where the country enjoys comparative advantage such as services, by acting with like-minded countries, and by taking advantage of the call for transparency of the trading system. He also believes the Ottawa Treaty has considerable relevance to Taiwan's offshore islands where the defense ministry's "national security" consideration made them far from being land-mine free, as well as his view on the world after Sept. 11 attacks.
Taipei Times: The middle powers' coalition leading up to the Ottawa Treaty in 1997 made one think of the Cairns Group under the multilateral trading body. What should Taiwan, as a small or middle power, bear in mind when it is to identify its strategic position following its WTO accession?
Lloyd Axworthy: Once you are inside the arena, it becomes a matter of very important strategic choices: who you are allied with; what kind of issues you think are in your interests; and what kind of innovations. I don't think people have quite fully identified with the impacts of the Doha round. You can know the priority issues themselves, but there is also an increasing demand now for a higher level of accountability and transparency of the WTO. To me, those are all advantages for small and medium-sized countries.
The more that you open it up, then you don't get the kind of thing where very large economic powers can dictate, overturn or be indifferent to the rules. The more transparent the rule of the game, the better it is. But the lesson is you can't do it by yourself. You need to be working with like-minded countries, so there is a high level of diplomacy. This is not just a technical question. And one also has to be engaged very actively with your own industries, your own unions, and even your own NGOs (non-governmental organizations).
In my own country there are several NGO groups that have become very actively involved in Geneva in determining how you set up precautionary principles in relation to the environment so that it can't be used as a trade barrier and in recognizing the impact that trade could have on environmental issues.
So I mean it's a fascinating but also a very creative time. Taiwan is coming in at a time when we see quite a substantial dramatic shift in a lot of the conventional economic rules -- I think all the better, frankly.
TT: You've argued it's better for Taiwan as a new WTO member to focus on the multilateral trading system before putting efforts in forging free trade agreements (FTAs) with others. But arguably, one of the obstacles to the multilateral trade talks is the extensive numbers of countries involved, thus forcing countries such as Singapore to go ahead with its FTAs. What is your view on that?
Axworthy: I don't think the economics behind FTAs is very good, because they are too small. To me, there are two big advantages in a broad multilateral system.
One is there is an enormous amount of flexibility. You are not limited to the partners you have to trade with, and you don't divert trade as a result.
Secondly, there is the politics of it. A trade regime is like any other international agreement, and you have to be able to provide counterbalance and force in order to make your interest served... So there is a very active diplomatic and political side in trade agreements, especially along with all those new issues. Obviously Taiwan has a comparative advantage in the area of information technology, and it has a huge take in the whole negotiations on services.
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