Indonesia turns down draft to revive WTO talks

Zakki P. Hakim, Jakarta

The Indonesian government has rejected a recent World Trade Organization (WTO) draft proposal aimed at reviving stalled global trade talks.

The draft, which includes an end to farm export subsidies, fails to meet the requests of developing countries, director of multilateral cooperation at the Ministry of Industry and Trade Djunari Inggih Waskito said on Thursday.

"We are saying no to the first draft," Djunari told the press on Thursday.

While an end to farm export subsidies has been one of the major demands of developing countries, the draft does not spell out a clear timetable on when developed nations will end the farm subsidies.

The export subsidies given by the governments of developed countries to their farmers have made farm products from developing countries difficult to compete with in the export market.

The WTO draft, drawn up by the organization's chief Supachai Panitchpakdi earlier this month, will be discussed at the upcoming WTO general council meeting from July 27 to July 29 in Geneva.

This is the latest effort to revive negotiations on lowering global trade barriers, which have floundered since the dramatic collapse of ministerial talks in Cancun, Mexico, last September.

The WTO talks are seen as a way to help boost global trade and lift millions out of poverty.

But Djunari, who will participate in the Geneva meeting, said that many developing nations would probably reject the first draft.

Indonesia was the leader of the G-33 group of developing nations during the Cancun talks, which failed due to the huge gap between the developed and developing nations.

Djunari said that developing countries would also not accept the proposal of nonagricultural market access (NAMA) mandating that all countries to reduce their tariffs on industrial products on mandatory basis, instead of on a voluntary basis.

The tariff reduction mechanism itself is also not acceptable due to its linear nature, which would be a major disadvantage for most developing countries that usually imposes high tariffs, he said.

Seven commodities included in the NAMA negotiations are electronics, fish and its products, footwear, leather goods, automobiles and their components, precious stones and gems, and textiles.

Meanwhile, executive director of the Institute for Global Justice (IGJ) Bonnie Setiawan said that the draft was the worst ever issued by the WTO.

"WTO is too ambitious, as it proposes too many issues to be solved. It should finish the agricultural issue first, then move to other issues," he said.

Bonnie said that the European Union and United States had a specific political interest in the July meeting, as both giants faced an election later this year.

"Both governments are seeking domestic support through their role in the coming negotiations," he said, and went on that it was in their interests that next week's meeting does not fail and that there is agreement on some issues.

"A second draft would be generated by end of this week, but I doubt whether it would have significant changes," he said.

The results of the meeting next week are considered crucial to the future of the Doha round of negotiations, which started in November 2001 to reduce global trade barriers.