WTO likely to develop despite obstacles

WTO likely to develop despite obstacles

JAKARTA (JP): The World Trade Organization (WTO) will likely
materialize as an international agency despite various obstacles,
most notedly the special interest groups responsible for
maintaining protectionist policies, says visiting Italian
Minister of Foreign Trade Giorgio Bernini.

"It is true that in Europe recently many politicians have been
calling for more protectionism due to the perceived economic
threats from the fast-growth developing economies," Bernini said
in a seminar at the Center for Strategic and International
Studies (CSIS) here yesterday.

"But I do not see their ideas being adopted by the
governments," he said. "Nobody wants to be left out from the
world economy."

Bernini, who arrived here Tuesday for a two-day visit, is also
an authority on international trade laws and comparative law. The
WTO is the international agency proposed to supervise the
implementation of the recently completed Uruguay Round of
negotiations on the General Agreement on Tariffs and Trade
(GATT).

Bernini said that although they are still currently in legal
limbo, the social and environmental clauses of the WTO will not
necessarily harm the interests of developing economies.

"What is needed is concrete participation in the WTO
negotiations by developing nations to ensure that these clauses
will not be utilized as a form of trade harassment," the minister
added.

Bernini acknowledged that the social clauses, which include
provisions on labor standards, might prove "sensitive" for
several developing nations, including Indonesia, which has a
vibrant but labor intensive economy.

The official, however, said that environmental and labor
issues will not be able to be dismissed.

He also warned that when the social and environmental clauses
are passed, it is the small and medium firms which will find them
"most challenging."

"This is why tight policy coordination is required by the
governments of developing nations as well as participation in WTO
negotiations," he said.

Many developing as well as industrialized nations will have to
review and re-adjust their laws once the WTO is implemented, he
added.

Suspect

In the meantime, economist Mari Pangestu questioned whether
WTO will be the appropriate forum to facilitate labor and
environmental issues.

"There are reasons to suspect that the social and
environmental clauses, supposed expressions of altruism, could
evolve into protectionism," she said.

"Maybe such issues could be better addressed in other forums
like the International Labor Organization (ILO) or other
multilateral forums," she said.

At the same occasion, economist Djisman Simandjuntak told The
Jakarta Post that the most serious challenge that Indonesia will
soon face, in connection with the WTO, is in the business service
sector.

According to the Marrakesh treaty, the final resolution of the
GATT Uruguay Round talks, Indonesia will welcome foreign law
firms, insurers and accountants to operate in the country in five
years time.

"Are our lawyers, accountants and insurance companies ready to
compete with their foreign counterparts who will soon be allowed
to operate here?," he said.

This must be addressed not only by the government but also by
the professionals' associations, he added. (hdj)