World trade has 'weathered Asian crisis'

World trade has 'weathered Asian crisis'

By Jean-Pierre Kapp

GENEVA: The world trading system has survived the crises in Southeast Asia and Russia in good shape, World Trade Organization Director-General Mike Moore said in an review of developments over the past year in the international trading environment.

Despite economic problems in many countries, the multilateral trading system had never been called into question. Moreover, the general economic recovery was a good basis for the start of a new round of talks.

Whereas in previous economic crises the countries affected had reacted by shutting off their markets, no such behavior had been recorded during the 1997/98 economic crisis in Southeast Asia, Russia and parts of Latin America.

Although some countries had temporarily introduced import duties on certain items, basically markets had kept open even during the economic crisis, Moore said.

This was partly due to the good sense shown by governments, but also to the strength of WTO rules.

Countries such as Indonesia, South Korea, the Philippines and Thailand had opened their markets even further even at the height of the crisis.

Japan too, despite severe economic difficulties, had met its Uruguay round obligations and last year had open its markets even more than the agreed timetable required it to. Liberal economic policies had enabled the countries affected by the crisis to create the foundations for a rapid recovery.

Moore also said that last year fewer countries than before had tried to protect their markets by imposing non-tariff conditions. This was all the more surprising in that in 1998 in some states there had been repeated calls for the introduction of protectionist measures.

According to Moore, the only area in which the WTO had noted a slight increase in the number of proceedings initiated was the field of anti-dumping. While it had been the punitive measures against steel imports adopted by the USA that hit the headlines, the WTO had found that the increase in the number of cases brought to it mainly involved developing countries such as India, Mexico and South Africa.

Moore takes the view that the multilateral trading system is well-established and that this, together with the worldwide economic recovery expected next year, provides excellent conditions for the new round of multilateral trade talks due to start in Seattle later this month.

Seldom before, he said, had the benefits of trade liberalization been so evident. When the Uruguay Round was launched, economic growth was sluggish and market-sharing arrangements were becoming the order of the day. However, said Moore, a successful start to the Seattle Round was dependent on adopting a negotiating agenda that led to a balanced and fair outcome for all member-states and took into account the widespread unease about globalization.

Though nobody could dispute the positive effects of free trade, some of the criticism of the multilateral trading system was certainly valid. That was why it was important to ensure that the new round of talks was more transparent and that social policy aspects were included in the negotiations.

The current position of the poorest countries was completely untenable, said Moore. The fact that the 48 least-developed countries together held a share of no more than half a per cent of world trade was an enormous cause for concern.

Sueddeutsche Zeitung