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Asia awaits gains from WTO reforms

Asia is warily counting expected region-wide gains from big decisions by the WTO to launch a round of global trade reform negotiations and to admit China and Taiwan as members.

A Reuters survey of government and trade opinions across Asia shows payoffs are expected by poverty-mired developing countries through to rich industrial giants led by Japan.

"The entry of China and Taiwan into the WTO means two large markets will be open to foreign competition. It is basically positive for the Asian economy overall," said Akio Shibata, chief economist at Japanese trading house Marubeni Corp's research institute.

The growing consensus is that WTO's Doha decisions two weeks ago provide enough meat for gains by all countries of the region.

For most developing countries, inclusion of farm trade in a reform round for the first time since the groundbreaking 1994 Uruguay Round offers enough prospective export gains to outweigh threats to domestic industries from freer trade, analysts say.

For developed countries, such as Japan, there are also gains. Like Korea, the second most industrialized Asian country, Japan is digging in to save its politically loaded rice sector from the extra imports which farm trade reform might bring.

But Japan's greater need is the industrial energy which a controlled opening of China to foreign investment would provide. It might have to compromise on rice, Shibata said.

Australia, whose A$30 billion (US$15.6 billion) a year worth of unsubsidized exports of grains, sugar and other farm produce battle state-assisted exports around the world, is geographical Asia's most clear-cut winner from Doha.

"I've been involved in this business for over 20 years and this is the most significant win that we've had," Graham Blight, trade representative for Australia's National Farmers Federation (NFF), said in Canberra. "After 20 years we've won."

Gains are also seen by developing Asian economies, from Indonesia to India.

"Our products [will be able to] compete with imported products, which have been cheaper because of subsidies," Indonesia's Trade and Industry Minister Rini Soewandi said.

For Indonesia, palm oil, a basis for margarine and cooking oils around the world, is an important example of expected gains.

China's imports under WTO entry conditions will rise to 2.4 million tonnes in 2002 from 1.5 million tonnes this year.

"It's a great opportunity for us to catch a growing Chinese market," Derom Bangun, chairman of the Indonesian Palm Oil Producers Association, whose members provide 25 percent of China's imports, said in Jakarta.

Malaysia, the world's largest producer which exported 1.02 million tonnes to China this year, sees similar gains.

Increased exports to China are seen extending virtually across the farm good range, from grains to sugar to soybeans.

But the growing consensus among Asian traders, most of them experienced sceptics about dealings with China, is that China will import only what it wants, regardless of WTO agreements.

"I personally do not think the Chinese government will allow so much TRQs [tariff rate quotas] to be used. It is a matter of national security," a Beijing trader said.

The TRQ system to be adopted by China in its WTO accession agreement involves big, specified increases in imports of agricultural goods, together with lower duties.

But China's reading of the market, together with its commercial and political needs, will prevail, Asian and Australian traders say.

Chinese officials themselves leave little doubt.

"The government is trying to maintain stable grains output to have better control over imports after WTO," Bu Yibao, analyst at China's State Cereals Information Centre, said.

Asian farm good exporters see a second barb in the tail of China's WTO entry, that stiff competition between exporters for the China market will trigger a painful efficiency drive in much of the Asian farm sector.
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