Win some, lose some
A deal struck at the 11th hour of five days of huffing and puffing saved the Doha round of the World Trade Organization negotiations from miserable failure, like those in Seattle in 1999 and in Cancun, Mexico last September.
After a grueling, 24-hour, nonstop process of discussion and negotiation -- which ended on Sunday, shortly after midnight -- the WTO's 147 members approved a framework of guidelines for completing the Doha Development Agenda. It is anticipated that the agenda, which was adopted in the Qatar capital in 2001, will come into force in December 2005 -- almost one year behind the original deadline of January 2005.
The most important achievements for developing countries include the agreement on a specific framework for reducing agricultural export subsidies, domestic support and import tariffs, which would be translated into final modalities later next year. Previously, commitment by developed countries, as regards farm subsidies, was couched in general terms, without specific details on their gradual phasing out.
This agreement, we believe, is most vital for Indonesian interests as it is mostly related to food commodities, where we have previously lost out to major industrialized countries that spend hundreds of billions of dollars to enable their farmers to dump their surplus produce on our market.
Indonesia -- which represented the group of 33 developing countries -- had initially rejected the July 2004 draft on agriculture trade as it pandered asymmetrically to the interests of politically influential corporate agriculture in rich countries, at the expense of hundreds of millions of farmers in the Third World.
Phasing out subsidies for food produce in major industrialized countries is crucial for programs in Indonesia, and other developing countries, to achieve food security and finally food sovereignty. The continued dumping of food commodities by rich nations not only distorts trade but could eventually destroy food crop agriculture in poor countries and force them to dangerously depend on food imports from rich nations.
However, the agreement over the weekend was made possible only under the spirit of "you win some, you lose some", meaning that a compromise was met, whereby the interests of rich countries were also taken into account.
Hence, the package includes a framework for agreement modalities in market access for nonagricultural products (notably manufactured goods), and recommendations on service negotiations and modalities for bargaining over trade facilitations (customs procedures etc.).
The agreement also covers development issues, such as general principles, special and differential treatment for the least- developed countries and the so-termed "Singapore issues" on investment, competition policy and transparency in government procurement.
Significant progress could be a psychological boost -- after the miserable deadlock at the WTO ministerial meeting in Cancun last September -- to further the Doha agenda of global trade talks for developing a fair multilateral trading system.
The failure in Cancun had caused great concern that most countries, losing any hope in the multilateral system, would turn to bilateral and regional trade agreements in violation of WTO rules.
The achievements of the WTO General Council meeting in Geneva, however, should not mean that government efforts to make the agricultural and manufacturing sector more competitive are scaled back. After all, trade policy is not a panacea. It must be backed by other policy concomitants and broad-based domestic economic reform.
Ad hoc, piecemeal policy instruments such as recent government measures to cope with sugar and import smuggling will not make our farm produce more competitive.
The strengthening of market competitiveness of our farm produce will require an integrated development approach encompassing the propagation of high-yield varieties, technical extension services for farmers, better irrigation networks and rural infrastructure and easy credit financing.
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