Regional, bilateral pacts could block global trade talks

Regional, bilateral pacts could block global trade talks

Agence France-Presse, Bandar Seri Begawan

Asia-Pacific business leaders, experts and economic officials
began a meeting here on Tuesday amid fears that bilateral and
regional pacts could impede efforts toward a more liberalized
global trading regime.

Brunei's leader Sultan Hassanal Bolkiah, speaking late on
Monday at a welcome dinner for the Pacific Economic Cooperation
Council (PECC) meeting delegates, urged participants to ensure
that such trading arrangements support multilateralism under the
World Trade Organization (WTO).

The impact of regional and bilateral free trade accords, whose
numbers have been increasing in the Asia-Pacific region, is a key
topic in the PECC sessions ahead of the Sept. 10-14 WTO
ministerial talks in Cancun, Mexico.

Negotiators hope to make progress in Cancun toward a more
liberalized global trading environment by tearing down tariff and
other barriers in areas such as agriculture and services. But
bitter disagreements between the richer and poorer countries
threaten to block any major movement.

The PECC, an advisory body to governments in the Asia-Pacific
region, includes top think-tank experts, corporate leaders and
officials.

Philippine President Gloria Arroyo, Thai Prime Minister
Thaksin Shinawatra and Malaysian Deputy Prime Minister Abdullah
Ahmad Badawi are scheduled to address the PECC delegates on
Wednesday, the final day of their plenary meeting in Brunei's
capital.

"In a few days, the WTO ministerial meeting will be taking
place in Cancun. One pressing matter that I know you have been
working on is particularly sensitive," Brunei's Sultan Hassanal
said.

"This is the emergence of an increasing number of bilateral,
regional and cross-regional trading arrangements. It is sometimes
called a 'newer regionalism.'

"It could well present a basic challenge to the concept of
'open regionalism.' It could certainly impede our efforts at
community building and economic development."

Hassanal said however that "realities" dictated that such
bilateral and regional trading arrangements were here to stay.

"If so, how can we ensure that such pursuits are transparent
and constructive? How can we be confident that they indeed form
building blocs for freer trade?" he asked.

Even the administration of U.S. President George W. Bush is
already tempering expectations from the Cancun meeting as the
deep divisions throw a Jan. 1, 2005 deadline for final agreement
into serious doubt, senior trade analysts based in Washington
said.

The analysts said a deal is more likely to come in 2007, if at
all.

WTO trade ministers had set the 2005 deadline in November 2001
when they launched the agenda for the talks in the Qatari capital
of Doha.

A World Bank report presented at a PECC workshop here on
Monday said the success of the Doha Agenda to tear down trade
barriers in sensitive economic sectors such as agriculture and
services would raise incomes, reduce poverty and speed up growth.

Incomes could rise by US$270 billion to $520 billion US, and
the number of people mired in poverty could be cut by about 140
million people, many of them in Africa.

"But to realize (the) development promise, an agreement has to
reduce barriers to the products the poor (countries) produce,"
the bank said.

It noted that developing countries have failed to penetrate
agricultural markets of rich nations and protectionism in
industrialized countries has remained high since the previous
Uruguay Round of global trade talks.

Middle-income nations, however, must also be willing to lower
tariffs, while poor countries should rely less on preferential
treatment and carry out reforms in trade-related institutions,
the bank added.