Tue, Dec 20, 2005 page9

• HK meeting shows the changing face of world trade

  • DPA
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  The WTO's latest deal announced on Sunday is only a small step forward in the drive to tear down global trade barriers -- but it offers big insights into the rapidly changing world of international trade.

  WTO ministers agreed after six days of grueling negotiations to eliminate costly farm export subsidies by 2013 and to offer special measures to help poorer nations, including African cotton producers.

  Despite the headway made in Hong Kong, however, tough negotiations on a final WTO agreement still lie ahead, with ministers expected to meet in Geneva in March to make further progress in liberalizing cross-border flows of goods and services.

  Although its outcome may be modest, the Hong Kong meeting sent a clear signal of radical change in the politics of trade.

  One key message is that while the US and the EU continue to dominate global politics, their economic clout is under challenge from a host of emerging new business powerhouses, including Brazil, India and China.

  Once dominated exclusively by the economic and business interests of the US and the EU -- with Japan and Canada watching mostly from the sidelines -- the WTO now has 149 members making conflicting demands on shaping global trade policy.

  Still in charge

  Clearly, Americans and Europeans are still the undisputed lead players in the WTO. The focus in Hong Kong remained very much on European farm aid policies and US subsidies to domestic cotton producers which critics view as damaging to the interests of other nations.

  Heated verbal exchanges between EU Trade Commissioner Peter Mandelson and US Trade Representative Rob Portman marked the first few days of the meeting as both sides sought to score points against the other.

  But the six-day trade saga played out in Hong Kong also spotlighted the growing power of a group of increasingly confident and assertive representatives from developing nations.

  In contrast to past meetings, least developed states also successfully used the meeting to make their voices heard above the clamor caused by the two economic giants and the new economic kids on the block.

  In addition, Hong Kong showed the extent to which the WTO is now a magnet for an array of non-governmental organizations, ranging from the powerful and well-respected aid agencies like Oxfam to hundreds of smaller groupings, seeking to fashion world policies on trade.

  Change in the air

  The inter-action among these different players spotlighted a sea change in the WTO's old way of doing business.

  Where once back-room deals between Europe, the US, Japan and Canada were the name of the game, the WTO today operates on the basis of a much wider participation of nations.

  As WTO Director-General Pascal Lamy reminded ministers in Hong Kong, agreements in the organization are difficult and slow because it is a democratic body, with each WTO member possessing the power to veto accords.

  Developing countries worked in Hong Kong by forging a range of different alliances, representing their varied and very diverse interests.

  Brazilian Foreign Minister Celso Amorim was the star performer for the G20 group of emerging nations whose clout in the WTO is growing slowly but surely.

  Amorim gave countless press briefings, either alone or in the company of other G20 members.

  In addition to representing the interests of the world's more powerful developing countries, the Brazilian foreign minister also built ad hoc alliances with other, poorer nations on key issues like farm subsidies.

  Brazil and India

  Matching the Brazilian minister's stellar performance in Hong Kong was Indian Commerce Minister Kamal Nath.

  With Amorim and Nath rivalling the pulling power of Mandelson and Portman, the Hong Kong encounter was definite proof that the balance of power in the WTO has changed -- for all times.

  The rise in the number of WTO members -- especially from developing countries -- is a reflection of the body's growing standing on the global stage. Joining the organization has become an essential rite of passage as countries strive to be recognized as modern reformers.

  Russia and Ukraine are struggling to meet membership standards, Saudi Arabia has just come in and the tiny Pacific island state of Tonga (population: 100,000) joined WTO ranks in Hong Kong on Dec. 16.

  Nath insisted in Hong Kong that developing countries were determined to stick together in defending their interests. But their unity will certainly be put to the challenge as the WTO negotiations pick up pace next year.
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