Asia faces pressure on rapid trade reforms
Asia faces pressure on rapid trade reforms
SINGAPORE (AFP): Many Asian developing economies emerging from
crisis are facing domestic pressure against faster trade
liberalization at the upcoming WTO ministerial talks in Seattle,
Washington, analysts in the region say.
Sheltered domestic industries are worried they would be
overwhelmed by competition if their markets were thrown open
while still recovering from a recession caused by the financial
turmoil which erupted in mid-1997.
They want to wait for their economies to be firmly on their
feet before having to face further liberalization from the launch
of a new round of global trade talks in Seattle, the analysts
said.
"There has been quite a lot of resistance to tariff
liberalization, particularly from manufacturers producing for
domestic markets," said Mohamed Ariff, executive director of the
Malaysian Institute for Economic Research (MIER), a Kuala Lumpur-
based think tank.
He said although some of their fears were warranted, these
manufacturers could not turn their backs on liberalization
"because one of the lessons of the crisis is excess protection of
industries makes them totally inefficient.
"In fact, the solution to the problem of openness is more
openness, not less openness," Mohamed said.
In Southeast Asia, the region worst hit by financial turmoil,
Malaysia and Indonesia have expressed difficulty adjusting to a
regional free trade plan.
They are unlikely to include cars, as originally planned, in
an Association of Southeast Asian Nations (ASEAN) tariff
reduction scheme to become operational on January 1, 2000.
Malaysia slaps heavy duties on some imported cars largely to
protect its national car Proton, whose sales slumped during the
crisis, while Indonesia's Timor car project has also been heavily
protected.
Liberalization is also being challenged in other Asian
nations, some of which want to hit back after failing to earn
market access in rich nations.
Political coalitions of developing countries, among them the
Group of 77 and the Group of 15, have strongly attacked developed
nations for using anti-dumping measures and countervailing duties
to shield their markets.
They accused industrial nations of going against the spirit of
the last Uruguay Round global trade talks.
Another commitment which is increasingly being questioned is
the agreement on textile exports.
ASEAN Secretary-General Rodolfo Severino pointed to the
commitment of the developed countries to dismantle their quota-
based system of limiting the import of clothing and textiles, and
to integrate trade in clothing and textiles into WTO rules and
disciplines.
He said the developed nations had "shortchanged" the clothing
and textile exporters, mostly developing countries, as they
"sought to circumvent this commitment by integrating in low-value
items first and pushing the bulk of their imports to the final
stages of the liberalization process."
Analysts warn that a Seattle battle for greater market access
between the developing nations and industrialized economies could
reopen old wounds sustained during the marathon talks under the
General Agreement on Tariffs and Trade (GATT) forum, WTO's
predecessor.
"But even if it opens up old wounds, it is a healthy sign,"
said Mignon Chan Man-Jung, director-general of the influential
Pacific Economic Cooperation Council (PECC).
"Otherwise we might as well not have a WTO forum whose very
essence is bringing together countries from different areas
together and trying to find a middle way to settle problems
incrementally, if not in one go," she said.
Chan said crisis-hit Asian nations should be given assurances
by the international community that markets, particularly
financial markets, would be supervised efficiently while
liberalization was underway.
"You can't just advocate domestic restructuring and other
reforms without having an effective international financial
architecture," she said.