First paragraph (Teaser):

The World Trade Organisation is taking a low profile with its two-day seminar on trade and development for Asian governments in Chiang Mai starting today.
This is not surprising. For while trade and the environment make up the formal agenda of the meeting, the informal agenda is to press Asian governments to commit to a new trade talks at the WTO ministerial meeting in Qatar in November.

Rest of the text:

Bangkok Post / March 27, 2001

Developing states resist
calls for new trade talks

The WTO is holding a seminar in Chiang Mai today and tomorrow on trade and development for Asian governments.

By Walden Bello

The World Trade Organisation is taking a low profile with its two-day seminar on trade and development for Asian governments in Chiang Mai starting today.

This is not surprising. For while trade and the environment make up the formal agenda of the meeting, the informal agenda is to press Asian governments to commit to a new trade talks at the WTO ministerial meeting in Qatar in November.

This is typical WTO: Use every key inter-governmental meeting to get governments to fall into line behind a new trade round. The WTO did this at the Asia Pacific Economic Co-operation summit in Brunei last November. It did it again at an African leaders summit several weeks ago.

As well as twisting the arms of Asian governments to support a new round of talks, the WTO is attempting to get backing for a new round from Asian civil society.

The WTO knows that even if the governments fall into line in Chiang Mai, civil society opposition at home could still push them off the bandwagon. Thus we have a trade and environment seminar for civil society organisations -- in Chiang Mai on March 29 and 30 -- fronted for the WTO by the Geneva-based International Centre for Trade and Sustainable Development.

Most developing countries are opposed to a new trade round. They have not yet absorbed the demands on them made at the Uruguay Round.

Many countries have still not changed their domestic legislation to make them WTO-consistent. They are bitter that many lost rather than gained from the Uruguay Round.

The United Nations Development Programme estimates that under the WTO regime, in the period 1995 to 2004, the 48 least developed countries will actually be worse off by $600 million (26.6 billion baht) a year, with sub-Saharan Africa actually worse off by $1.2 billion (53.2 billion baht).

The UN Development Programme also says that 70% of the gains of the Uruguay Round will go to developed countries, with most of the rest going to a relatively few large export-oriented developing countries.

Mike Moore, the WTO director-general, and Clare Short, Britain's development minister, have tried to sell a new round as a development round. But the reality is that the main agenda for liberalisation has more to do with opening up their economies to greater penetration by northern transnational corporations.

The "new issues" that the developed countries want to make the centrepiece of negotiations are investment policy, competition policy, government procurement policy, labour standards and environmental standards.

The object of the first three is to give transnational corporations national treatment -- that is, to strike down preferential treatment given to local producers and contractors. As for labour and environmental clauses in WTO agreements, developing countries fear that their intent is simply to serve as barriers to the entry of developing country imports while many southern NGOs regard them as giving the WTO tremendous power in areas where it does not have competence.

A new round is like a Pandora's box. Once you open it, all sorts of issues detrimental to the interests of peoples and countries may emerge. The United States may even use it to force other economies to accept genetically modified organisms.

Instead of engaging in a new round of trade liberalisation, the WTO should spend the next few years repairing the Uruguay Round so that it does less harm to the interests of developing countries.

Here are a number of priority issues:

- Trade-related intellectual property rights should be revised so as to ban the patenting of all life forms including micro-organisms and to strengthen intellectual property systems to protect the accumulated knowledge of local and indigenous communities from bio-piracy.

- The Agreement on Agriculture should be amended radically to eliminate tariff peaks and tariff escalation against southern agricultural exports, end the massive subsidies for developed country farming interests, do away with the different forms of direct income support for developed country farming interests, institute a food security exception to market access rules, and recognise the principle of special and differential treatment for developing countries that would allow them greater latitude in their interpretation and implementation of Agreement on Agriculture rules.

- The Agreement on Trade-Related Investment Measures must be revised to drop the ban on local content policies. Trade policy has traditionally been a mechanism used by developing countries to industrialise. The ban on local-content policies, which specifies that a determined amount of a product be sourced locally instead of being imported, practically eliminates this positive use of trade policy for development.

- The special ministerial decision approved in Marrakesh in 1994 to provide assistance to net food importing developing countries still has not been implemented in spite of the fact that the Agreement on Agriculture has raised the price of these countries' food imports.

- The WTO must force developed countries to live up to the commitments they made to lift import barriers under the Agreement on Textiles and Clothing. Seven years into the WTO, the United States, European Union and other developed countries have scarcely lifted their quotas against Third World garment and textile imports. For all intents and purposes, the restrictive multi-fibre agreements remain in place.

- Last but not least, the WTO decision-making structure must be overhauled. The "Green Room/consensus process" has ensured that a few countries dominate decision-making at the WTO. Even Charlene Barshefsky, the US Trade Representative during the 1999 Seattle summit, acknowledged that the WTO was undemocratic.

"The process was a rather exclusionary one," she said. "All meetings were held between 20 and 30 key countries. That meant 100 countries, 100, were never in the room. This led to the extraordinarily bad feeling that they were left out of the process and that the results had been dictated to them by the 25 or 30 privileged countries in the room."

After the developing countries rebelled against this exclusionary decision-making process in Seattle, Stephen Byers, the British minister of trade and industry, said: "The WTO will not be able to continue in its present form. There has to be fundamental and radical change in order for it to meet the needs and aspirations of all 134 of its members."

Yet scarcely three months, during UN Conference on Trade and Development (UNCTAD) in Bangkok in February 2000, Mike Moore said the Green Room/consensus process was non-negotiable.

Decision-making is fundamental. The developing countries and international civil society cannot agree to a new trade round unless the inequity in decision-making is banished from the WTO.

When the WTO came into being in 1995, free trade was seen as a panacea, a cure for poverty, inequality and almost everything else. The Washington Consensus that formed the intellectual pillar of free trade and structural adjustment seemed to carry all before it. Today, the situation is radically different. The alleged benefits of free trade and free markets are challenged everywhere.

As for the so-called positive relationship between free trade and growth, the emerging consensus is laid out by Dani Rodrik, professor in international political economics at Harvard University: "Do lower trade barriers spur greater economic progress? The available studies reveal no systematic relationship between a country's average level of tariff and non-tariff barriers and its subsequent economic growth. If anything, the evidence for the 1990s indicates a positive relationship between import tariffs and economic growth. The only clear pattern is that countries dismantle their trade restrictions as they grow richer." This finding explains why today's rich countries, with few exceptions, embarked on modern economic growth behind protective barriers but now display low trade barriers.

Walden Bello is executive director of Focus on the Global South, a research, analysis and policy programme of Chulalongkorn University's Social Research Institute. He is also a professor of sociology and public administration at the University of the Philippines.