Optimism high for new round of multilateral trade talks

Vincent Lingga, The Jakarta Post, Hong Kong

Asian trade ministers are highly optimistic that the World Trade Organization (WTO) ministerial meeting in Doha, Qatar, next week will launch a new round of multilateral trade negotiations.

The ministers from Indonesia, Hong Kong, China and the Philippines who attended the East Asian Economic Summit in Hong Kong agreed that the gloomier global economic outlook following the Sept. 11 terrorist attacks on the United States had made a new round of trade talks more imperative than ever.

"The developed and developing countries have now realized the urgent need for them to sit down together to discuss new ways of further promoting trade ties as the Sept. 11 tragedy has heightened the possibility of a prolonged global recession," Indonesia's Minister of Industry and Trade Rini Soewandi noted on Wednesday.

Rini said global economic prospects had now been so dampened and the possibility of a prolonged economic downturn had become so real that many major economies might tend to look inward, resorting to trade protectionism.

She also expressed concern that feelings of insecurity and higher insurance costs might prompt the U.S. to import more from geographically closer countries such as Mexico and Canada, and those in the Caribbean and Central America.

Rini especially welcomed China's entry to the WTO at the upcoming ministerial meeting as positive for the interests of developing countries given China's significant clout in the current global economy.

"I am convinced that after the Sept.11 tragedy the developed countries will have become more responsive to an agenda oriented toward economic development in the least developed countries because the multilateral trading system has so far benefited the developed nations more," Rini added.

She told The Jakarta Post after the summit, which ended on Wednesday, that despite its strong commitment to the ASEAN free trade area, Indonesia fully supported a new round as an open and free multilateral trading system would be the best outcome for all countries.

"Indonesia has benefited greatly from the multilateral trading system," Rini said, adding that its non-oil exports alone reached US$47 billion last year.

But she admitted that exports this year might decline significantly due to the economic downturn being experienced by Indonesia's trading partners, notably the U.S. and Japan.

"We would be lucky if we could record $42 billion in non-oil exports this year," she said, pointing to the sharp decrease in import orders from major countries after the Sept. 11 tragedy and anti-American demonstrations in some Indonesian cities.

China's Minister of Foreign Trade and Economic Cooperation Shi Guangsheng concurred that his country's entry to the WTO next week would make the global trading organization more complete and representative.

"It will narrow the gap between the developing and developed members and will facilitate the formulation of better rules of international trade," Shi said.

She added China fully supported a new round of trade negotiations that would give special attention to the concerns of the developing countries.

Philippines Secretary of Trade and Industry Manuel Araneta Roxas also stressed the need for the next round of multilateral trade talks to address the interests of developing nations.

"We want the new round to be a new 'development' round of trade negotiations,"Roxas said.

Chau Tak Hay, Hong Kong's Secretary of Commerce and Industry, said the WTO could not afford another miserable failure like the one it suffered in Seattle two years ago.

Hay noted there was now a great risk of many countries resorting to protectionist policies as they faced a gloomier economic outlook and said that this would not benefit the global economy, which had become deeply interlinked.

He expressed optimism that the Doha meeting would succeed in launching a new round of trade negotiations because the U.S. and European Union now seemed to be in agreement about its agenda.

"The Seattle meeting ended in miserable failure because both the U.S. and European Union did not have a consensus, and a new round was impossible without their participation," Hay said.

WTO Director General designate Supachai Panitchpakdi, who will take over as head of the global trade organization next year, observed that declining global trade had jolted the developed and developing nations into realizing that they needed to act soon to strengthen the multilateral trading system.

"Global trade, which expanded by 12 percent last year, may grow by a mere 2 percent this year due to the economic downturn in major countries. And if we do not act now, things could get worse," Supachai cautioned.

He acknowledged that an agreement had yet to be made on the agenda for the next round but he was convinced that a compromise agenda could be worked out and that more of the developing countries' interests would be accommodated.