Contentious issues dog run-up to WTO meeting

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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