Optimism high for new round of multilateral trade talks

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.