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.