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Kathmandu Friday November 23, 2001 Marga 08, 2058.
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Fourth round meeting of WTO
By Soorya Lal Amatya
The fourth ministerial meeting of the World
Trade Organisation (WTO ) was just held in Doha, Qatar from 9 to 14 November 2001. There
is a great curiosity regarding the final outcome of this ministerial meeting. The speed of
liberalisation of multilateral global trade arrangements and its impact on developing
countries, particularly on LDCs, are important aspects of wide concern. At present there
are 142 member countries or customs territories in the WTO. The official agenda at this
meeting was the accession of three countries, China, Taiwan and Vanuatu, to the WTO. It
was planned for up to 13 November but had to be extended for one more day for creating a
general consensus in the final ministerial declaration. The proposal on accession of China
and Taiwan to WTO was finally approved.
The WTO was established in 1995 and has
replaced the General Agreement on Tariffs and Trade (GATT) which had acted as a watchdog
in regulating multilateral world trade since 1948. The proposal for the establishment of
the WTO was made at the Uruguay round of international trade negotiations and finally
approved by the trade ministers’ meeting held in Marrakesh, Morocco in 1994. The
first WTO ministerial meeting was held in Singapore in 1996, the second in Geneva in 1998
and the third in Seattle in 1999. The WTO has its headquarters in Geneva and it is the
negotiating forum and custodian of the legal and institutional foundation of the
multilateral global trading system. It has global status similar to Bretton Woods
Institutions like the International Monetary Fund and the World Bank. But it is not a
United Nations agency. The WTO is a member driven organisation and decisions are usually
taken by consensus of the member countries. The WTO is often called a rich man’s club
and is dominated by the industrialized countries of the world. The LDCs have not yet
become its members.
That trade liberalization in the developing
countries will promote economic development and the virtuous circle of open trade and
growth will contribute to poverty alleviation have been proved as wrong assumptions. It
has been widely experienced that economic liberalization and open trade policy alone can
not promote growth and economic development. These are to be accompanied by reform
measures in different sectors of the economy, good governance, transparent dealings and
effective implementation of policies and programmes. The developing countries have been
complaining that there are imbalances in the WTO agreement and inequity in the
distribution of the benefits. The continuing fear is that the LDCs might be further
marginalized when they open up their domestic markets. Most of the WTO members experienced
the failure of the third round summit meeting in Seattle in 1999 and realized the need for
more flexibility and constructive handling of the thorny issues concerning the
multilateral world trading system. The USA and EU have jointly pledged to provide
financial support to developing countries in building negotiating capacity for WTO
agreement. The European Union went even further in removing trade barriers to all products
from the poorest countries of the world.
The six day meeting in Doha was fruitful in
the sense that it was a broad and balanced round of negotiations. It approved a work
programme of negotiations on a range of subjects like opening up of trade in agriculture,
services and industrial products, environment issues, priority for accession of the least
developed countries, additional assistance to LDCs in negotiation process, keeping
medicinal products free from trade related intellectual property rights (TRIPS) and other
aspects. The negotiation on non-trade areas such as multilateral investment, global rules
on competition, transparency in government procurement and trade facilitation The global
economy was already in the grip of a slowdown prior to the terrorists attacks in New York
and Washington on September 11 and now the speculation is that the US retaliatory strikes
in Afghanistan would bring further recession. This would obviously hinder the economic
development of developing countries and particularly of LDCs. The global multilateral
trading system needs to be made more balanced, equitable and fair. All the countries have
to liberalize and open up their markets, but the development dimension and poverty issues
need to be properly addressed in the multilateral global trading system. The WTO
multilateral trading agreements affect the lives of people in all countries. So all the
countries including LDCs have to take a keen interest in the formal rounds of trade
negotiation. The WTO plays a unique role in providing a dispute settlement mechanism
whenever there is an outstanding dispute on trade issues between two member countries.
The 48 least developed countries together
account for about 10.5 per cent of the total world population but contribute less than 1
percent to the total world export. The LDCs need focused technical assistance in promoting
sustained economic development and capacity building while negotiating in the existing
multilateral trading system and grasping potential market opportunities in future. Nepal
has already adopted a policy of economic liberalization and has opened up its markets. But
we have failed miserably in taking advantage. The bilateral trade agreement with India
signed in 1996 can be taken as an example. It was a very good trade pact for Nepal. But
because of substantial export of vegetable ghee, acrylic yarn, GI pipes, zinc oxide and
copper wire to India, the Indian trade delegation has been pressing hard for inclusion of
a 50 percent value added condition for free entry of commercial goods to India. My
contention here is that the government of Nepal should have regulated properly the flow of
goods to India and other countries and also the flow of imported goods into the country.
In this context, the private sector’s role seems to be vital. This obviously will
indicate how important is the role of government policy and cautious implementation and
the private sector’s cooperation when Nepal finally gets accession to the WTO.
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