Developing nations 'need fair trade, not free trade'

Developing nations 'need fair trade, not free trade'

JAKARTA (JP): Former minister Emil Salim called on
industrialized nations on Wednesday to allow wider access for the
inflow of goods from developing countries.

He said that the implementation of the existing trade
liberalization program remained more advantageous to developed
nations than the developing world.

He said many industrialized countries continued to practice
covert trade protectionism despite their professed commitment to
freer trade.

"What the developing nations actually need is fair trade, not
free trade," Emil said in his address during the release of the
Trade and Development Report 1999 of the United Nations
Conference on Trade and Development (UNCTAD).

Several other senior economists, including former trade
minister Arifin M. Siregar and UNCTAD director for globalization
and development strategies John Toye, also commented on the
release of the report.

The report said the subsidization of agricultural output in
industrialized countries shut out imports from developing
countries, creating unfair competition.

"The annual cost of support for agriculture in industrial
countries in 1996 to 1998 was double the level of agricultural
exports from developing countries during those three years," it
said.

Although European dairy producers, for example, are among the
world's highest-cost producers, they have a 50 percent share of
the world market, the report added.

It said that the industrialized countries' possible abuse in
applying health and safety standards to control imports from
developing countries was another sign of covert protectionism.

The report identified product lines such as footwear, leather
and travel goods, textiles and clothing, toys and sports
equipment, wood and paper, rubber, plastics and agricultural
products as those which sustained high tariffs in the
industrialized countries.

It believed the protectionism could inflict potential revenue
losses of US$700 billion in a period of less than a year.

"It is estimated that an extra $700 billion of annual earnings
could be achieved in a relatively short time in a number of low
technology and resources-based industries," it said.

Emil believed the real effects to the economy were much
greater than $700 billion.

He said it was not inclusive of the loss of employment
opportunities created through exports.

Trade should be the first priority for the economic growth of
the developing countries, Emil said, with foreign aid and private
foreign investment ranked second.

"Market access to developing countries is key to the
(economic) growth of developing countries." He said the need for
foreign aid might become obsolete if developing countries were
unhindered in their trade efforts.

UNCTAD director John Toye said developing countries needed to
finance economic growth with exports, not with short-term capital
inflow which could inflict a shock on the countries' economies
when the funds were abruptly pulled from the country.

He said that developing countries needed to strive harder in
international trade talks to defend their exports which were
sometimes obstructed by covert protectionism in industrialized
nations' markets. (udi)