TWN Letter to Financial Times on WTO

On its issue of 11 August 2001, the Financial Times (London) published a letter from Third World Director, Martin Khor, under the title, “Time to build a better multilateral trading system.”   Below is the letter.

The Editor
Financial Times

Dear Sir:

In a sober assessment of where things stand in the run-up to the World Trade Organisation Doha ministerial meeting, Mike Moore, the WTO director-general, tells us that without a new and broader round, the international trading system will disappear into oblivion, leaving the  privileged few to dictate trading outcomes (“Unfinished business”, FT, August 1).

Certainly, the recent actions of the US, in such areas as steel, textiles and trucks, give genuine cause for concern. But is the answer to such protectionist threats to pile  additional pressures onto an already fragile and unequal system?

Many of us who followed the Uruguay Round were alarmed by the ease with which the big trading powers expanded the original agenda to include a series of non-trade issues. The final agreement has worked to the disadvantage of most developing countries.

The damaging inequities of the trading system have been highlighted in the Zedillo Report, commissioned by the Secretary-General of the United Nations. According to that Report, clearing up the damage means tackling implementation issues and anti-dumping rules, liberalising trade in agricultural products, reducing tariff peaks and escalation, reforming trade related intellectual property rights, advancing special and differential treatment and liberalising the movement of natural persons.  This workload is  more than enough to occupy the time and minds of WTO diplomats for  several years.

Mr. Moore insists that the only way to address the injustices is for developing countries to make trade-offs, hence his call for a broader agenda at Doha. His reasoning is unfounded and unprincipled.  The “trade-offs” as proposed by the developed countries would land the developing nations with further obligations on new subjects such as investment, competition policy and government procurement, which are designed to open up the markets and resources of these poorer countries
whilst they would be unable to reap reciprocal benefits due to supply constraints and weak capacities.  The existing imbalances will then simply get much worse.

The present problems should only be tackled head on, not as the by-product of the kind of backroom deals and arm twisting by the rich and powerful  which created the problems in the first place. Artificial deadlines and messianic language aside, the real issue, surely, is about building a better multilateral trading system that allows the developing nations to benefit.

And accepting a specific agenda for multilateral reform in favour of developing nations does not stop avowed free traders in the North from following their instincts. If Tony Blair genuinely believes in the boundless opportunities of globalization (FT report August 2nd), he should concentrate his energies against European farming lobbies and begin to dismantle barriers to the
cross-border flow of labour.  “Just Do It”, Mr. Blair.

Yours truly,

Martin Khor
Third World Network
228 Macalister Road