What to bargain for at Cancun WTO meeting

What to bargain for at Cancun WTO meeting

Muhammad Sauri Hasibuan, Foundation for Human Resource
and Technology Development (FORTECH Consulting), Jakarta

Long-time critic on globalization Martin Khor Kok Peng once
commented on the developed countries' attitude toward the World
Trade Organization: "Liberalization if it benefits me,
protectionism if it benefits me; what counts is my commercial
interest."

Indonesian representatives should bear this in mind ahead of
the upcoming Cancun round of the WTO meetings to be held from
Sept. 10 through Sept. 15 in Mexico.

Indonesia and other developing countries may lack resources to
equip themselves in the negotiations of "free trade," but they
should not bow to the demands of the big powers or "Superquad."

As the world's largest economy" the U.S. sets the agenda at
the WTO. Tragically, while Washington exerts its power
internationally, its interests are nationally based and largely
influenced by the myopic, profit-oriented aspirations of its
corporations.

Eager to impose broader and deeper market openings to increase
corporate profits -- through transparency in government
procurement, industrial tariffs, rules deregulating trade in
genetically modified products and liberalization of most services
-- the U.S. consistently refuses to provide the concessions to
developing countries that would lead to a more balanced trading
system.

Even as it promotes an ideological free trade position,
developed countries protect their own industries, even mature
ones, when they cannot compete in the international market. This
is true in the textile and footwear sectors as well as in various
key agricultural products.

Tariffs in some of these protected U.S. industries have
remained unchanged since the 1940s. To protect its industries
from foreign competition, the U.S. has repeatedly resorted to
erecting antidumping duties against the industries of developing
countries. Antidumping duties can be levied on a country if it is
determined that the country has exported its product at lower
than its domestic selling price.

In this upcoming Cancun meeting Indonesia will raise several
issues, including international trade, access to nonagricultural
products, trade in services and new issues.

On the issue of rules Indonesia will include the subjects of
antidumping subsidies on most fisheries products. The antidumping
issue will be greatly emphasized by Indonesia as a country
subject to frequent accusation by developed countries, which can
damage its product competitiveness in the long run.

The WTO provides for countries to respond to predatory pricing
practices of other nations -- aimed at increasing market access
-- with antidumping measures that penalize governments allowing
such practices.

It has also been suggested that existing WTO language, which
calls for special regard for developing countries before
antidumping measures are implemented, should be respected. The
United States, the major user of antidumping measures, is opposed
to allowing these to be reviewed.

Other antidumping issues that have become of primary concern
for Indonesia are lines of definition, causal relationship on
injuries and loss, standard of investigations and special and
differential treatment.

Indonesian representatives should therefore negotiate fiercely
that the antidumping provision must be improved and tightened to
prevent it from being abused as part of a protectionist response
by developed countries when faced with competition from
developing country industries.

Issues on agriculture are also of crucial importance for us,
particularly regarding the use of tariff reduction or elimination
in certain sectors.

In this case Indonesia has chosen bound rates as the basis of
tariff reduction and not the existing applied rates (which are
already low, benchmarked by international standards). Agreement
on agriculture policies is a classic issue for all WTO members
and can be divided into three areas: Market access, which deals
with tariff barriers and import quotas; domestic support
programs, such as price support payments to farmers, and export
subsidies.

In each area, the agreement lays out rules to dismantle
barriers to trade by reducing tariffs and public expenditure on
agriculture. The proponents of the agreement, including the U.S.,
argue that food security would be enhanced if developed countries
stopped stimulating production through price support and export
subsidies.

The market access gains, afforded to Southern nations through
reduced Northern tariffs, were also expected to raise developing
countries' foreign exchange earnings, enabling them to buy what
food they needed from world markets.

Food security depends on adequate supply, distribution and
access to culturally appropriate food for everyone. It depends on
intricate social, cultural, economic and political relationships
that differ enormously from place to place and over time. This is
something Indonesian diplomats should articulate when discussing
such subjects at the Cancun talks.

With respect to the agreement on agriculture, what should the
delegation suggest at the upcoming round?

The team can closely collaborate with other developing
countries to construct a "food security box" within the
agreement, either as a separate item or as a series of amendments
to the existing articles, to ensure saeguards for food security
in such countries.

The food security box would also aim to ensure that developing
countries had the flexibility to support domestic agricultural
production and food security.

The Indonesian team should also create a common agenda with
other developing countries that tariffs and other kinds of taxes
be allowed as a way of protecting domestic agriculture without
incurring new expenditure.

Policies to protect poor consumers from the sudden price
swings of international commodity markets and to ensure the
availability of staple crops not generally traded internationally
(white maize, sorghum, and others) could also be considered.
Nobody needs to go hungry -- each person that does is the victim
of conscious policy choices and failures.

Indonesian diplomats will carry a noble task to ensure that
WTO policy toward their country will help rather than increase
the hunger at home. The task ahead is great and the delegation
must be up to it as the future of their people is at stake.