Momentum brings flash of hope for WTO

By Ei Sun Oh Source:Global Times Published: 2013-12-16 16:08:01

Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

Some attributed it to the warm and welcoming atmosphere of the world famous resort island of Bali. Others pointed to the sheer exhilaration after marathon sessions of intense negotiations. But as Indonesia's Trade Minister Gita Wirjawan, who chaired the Ninth Ministerial Conference of the World Trade Organization (WTO), announced in his booming voice the passage of an agreement on December 7, the whole plenary hall erupted in cheers.

And there were good reasons for the spontaneous joy. It was the first trade pact sailed through under the aegis of the WTO.

Those who wondered why, despite being established 18 years ago, the WTO took so long, only had to look at the intricacies of WTO procedures, whereby the adoption of any substantial resolution requires the unanimous consent of all 159 WTO member states of various GDP sizes and trade volumes.

In stark contrast to the jubilance surrounding the founding of the WTO, the mood for free trade on a global scale has moved decidedly toward the somber end over the past few years. Gone were the colorful days when Thailand and New Zealand crossed swords on their respective nominees as WTO director general, leading to the consummate compromise of both serving only "half terms." Under their successor, the bland Pascal Lamy, the former European Union trade commissioner, the WTO essentially ran into an impasse of slow-moving global trade negotiations.

Yet the trade deal reached in Bali recently should not be dismissed as insignificant. For one, it requires WTO member states to publish or otherwise make transparent their respective customs procedures.

To those in the trading business who are accustomed to shipping goods among mature import and export economies such as China and the US, where sometimes customs clearance can even be partially accomplished online, this might not sound like a big deal.

But to those who eke out a living delivering goods through ports at less-than-developed economies, being able to get a copy of the local customs regulations is very often a matter of the success or failure of their businesses, which often depends on timely and orderly customs procedures.

The Bali deal was almost marred by last-minute wrangling that threatened to unravel the whole pact.

The US was at loggerheads with Cuba over some of the long-standing US sanction measures against the latter. India was adamant about protecting its cotton farmers against the wrath of other cotton producers, most notably in the US. In the end, however, all sides compromised on either form or substance or both, and the WTO regained a fresh breath of life.

And it was precisely a combination of the previous lack of collective free trade commitments among WTO member states, as well as the de facto vetoes that could be yielded by individual member states, that frustrated the more advanced trading economies.

Instead, they chose to pursue either regional free trade pacts such as the Trans-Pacific Partnership (TPP) involving 12 countries around the Asia-Pacific Rim and the Regional Comprehensive Economic Partnership involving ASEAN and its neighbors, or outright bilateral free trade agreements.

And held on the heels of the fruitful WTO Bali conference was the TPP ministerial meeting in Singapore. The TPP is closely being watched the world over, as if successfully concluded it would entail the integration of over 40 percent of the world economy.

Over the past year, the US has on various occasions over the past year called for the conclusion of TPP negotiations by the end of this year. However it appears that only "substantial progress" has been reached so far.

One of the major flaws with the TPP negotiation process is that it is overly secretive. The original intention for such obsessed secrecy might have been a desire to speed up the negotiation process by not subjecting it to the prying eyes and thereby obstructive objections of the domestic lobbies of the various negotiating partners. Absent in any TPP meeting were the various publicity antics of WTO member states in Bali.

In practice, however, it generated exactly the opposite effect. The overwhelming suspicion and distrust among the professional lobbies and the general populace in countries like Malaysia and even in the US, created such a huge negative attitude against the TPP that simply cannot be overlooked, thus ironically could be said to have contributed to the slowing down of the TPP momentum.

To continue to remain relevant, the WTO has to redouble its efforts in prodding its member states to renew their commitments toward the reduction and eventual removal of tariffs and non-tariff barriers, as well as empathize with the plight of the developing world.

To ensure smooth and timely adoption, the TPP, on the other hand, will need to throw open its doors and demonstrate its sincerity in creating a fair and productive free-trade solution for the Asia-Pacific region.

The author is a senior fellow with the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. opinion@globaltimes.com.cn



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