Contentious issues dog run-up to WTO meeting
JAKARTA (JP): The run-up to the inaugural ministerial conference of the World Trade Organization (WTO), now less than four months away, is still being dogged by contentious non-tariff issues dividing developed and developing countries.
Developing countries in the Asia-Pacific region remain cautious over the proposal by developed countries to bring new issues, including labor standards, investment treaties and competition policy, to the WTO ministerial meeting in Singapore in December.
"It was felt that over-burdening the WTO with new issues may reduce its effectiveness and detract from the focus on implementation and on the built-in agenda which is important and heavy enough," Adrianus Mooy, executive secretary of the Economic and Social Commission for Asia and Pacific (ESCAP) said here yesterday.
Mooy was speaking at the closing of the three-day senior ESCAP officials meeting, which was held to prepare the way for the WTO ministerial conference.
He noted that all ESCAP members are also committed to the welfare of workers, the protection of their rights and core labor standards. However, he said, linking trade with social clauses is the least appropriate way of securing workers rights and improving labor standards.
"On the other hand, there was a danger of creating a new instrument in the hands of protectionist lobbies for easy abuse," Mooy said, adding that the issue needs to be studied in greater depth and the proper forum for pursuing this issue is the International Labor Organization.
Developed countries believe that competition against products made with cheap labor in developing countries is leading to job losses in their markets. They are pressing for a uniform minimum wage and other conditions that developing nations believe is designed to blunt their competitive edge in world trade.
A great deal of sensitivity surrounding the upcoming WTO ministerial conference is also evident from the items relating to investment and competition policy.
Mooy noted that the proposal for the inclusion of investment rules in the WTO had been prompted largely by a desire to negotiate a Multilateral Agreement on Investment (MAI) drafted by the developed countries in the Organization for Economic Cooperation and Development.
"The general feeling was that the MAI was not appropriate for developing countries," Mooy said.
Supporting Mooy's argument, Ravi Sawhney, director of ESCAP's International Trade and Economic Cooperation Division, said that the investment issue should not be included on the agenda of the Singapore meeting as there is no consensus on this issue.
"Developing countries which are concerned with this move feel, by and large, that they cannot open their doors widely to foreign direct investment without imposing any checks or any controls," Sawhney said.
He accused developed countries of pushing MAI into a multilateral treaty through the WTO without considering the problems faced by developing countries.
"Why don't the developed countries open their markets to the free flow of labor... Why should they be controlled," Sawhney remarked, stressing that most developing countries have the advantage in the labor sector, especially over unskilled labor.
Competition policy, he explained, was another issue that should not yet be brought to the WTO forum, considering that there is still a large difference of opinion between developed and developing countries on it.
Developed countries argue that all countries should adopt a competition policy, which guarantees a level playing field for all parties, including foreign companies. Developing countries, on the other hand, demand more level playing fields in the international trading regime.
He suggested that new issues like investment and competition policy be studied thoroughly first at the United Nations Commission on Trade and Development (UNCTAD) before being brought to the WTO ministerial meeting.
"WTO you know is a negotiating forum ... not a forum for exchanging views. But UNCTAD can provide a forum where countries can discuss and get a better understanding on different positions. After there is a consensus on an issue, then you bring it to the WTO for negotiation," Sawhney said. (rid)
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