WTO meeting a success for developed states

By Riyadi

SINGAPORE (JP): Developed countries achieved their ambitions at the World Trade Organization (WTO) ministerial conference this week while developing countries will still have to fight to achieve theirs, experts say.

Mari E. Pangestu, head of the economic department at Indonesia's Center for Strategic and International Studies, said here yesterday developed countries "did get something of what they came here for".

They managed to force the Singapore conference to discuss their proposed new issues, including labor standards, competition policy and investment. They even managed to have them all included in the WTO declaration.

In addition, they managed to clinch a pact, together with some developing countries, to liberalize trade in information technology products.

"I think the homework now will be more for developing countries as a group because not only do we now have to implement our obligations but also to deal with these new issues," Mari Pangestu said during a break at a seminar hosted by the Pacific Economic Cooperation Council.

Developing countries failed to expedite negotiations on many of their interests, including those on textile and clothing and agriculture, Mari said.

Even least-developed countries would have been disappointed by the declaration, Marie said. Although the declaration mentions plans of action for them, these are voluntarily and unclear.

Hadi Soesastro, another economist at the CSIS, questioned Minister of Industry and Trade Tunky Ariwibowo's claim that the Singapore meeting was a success for Indonesia and other developing countries.

Tunky had said earlier Indonesia was satisfied with the declaration which did not accept linkage between trade and labor standards.

"If your purpose of coming here was to prevent those new issues, yes it was a success. But it should not have been the case. You should have come here with clear concepts or ideas. So you would go home with something in hand," Hadi said.

Djisman Simandjuntak, president of Jakarta-based Prasetiya Mulya graduate school of management, said he was dissatisfied with Indonesia's signing of the Information Technology Agreement (ITA).

Weakening

He said Indonesia's acceptance of the ITA would weaken its bargaining position in future negotiations on various sections of the WTO's built-in agenda.

"It would even lessen developing countries' bargaining position when the new round of talks starts, probably, by 1999," Djisman said.

Indonesia is one of the few developing countries participating in the United States-initiated ITA, which will liberalize trade in information technology products starting July 1, 1999 and ending by Jan. 1, 2000.

The ITA was signed here Friday by the 15 countries of the European Union, Australia, Canada, Taiwan, Hong Kong, Iceland, Indonesia, Japan, South Korea, Norway, Singapore, Switzerland, Turkey and the United States.

Developing countries with a significant share of trade in information technology products such as Malaysia and Thailand did not sign the pact.

Thai Minister of Commerce Narongchai Akrasane said at the seminar his country did not participate in the ITA because it failed to liberalize consumer products in which the country had significant competitive advantage.

As for Indonesia, Hadi explained the ITA would give short and medium term benefits. In the short term, it would benefit Indonesia's telecommunication industry which still imported many of the products covered by the ITA.

In the medium term, Hadi said it would benefit Indonesia provided foreign investment commitments, especially those in semi-conductors and electronic components, were realized because Indonesia would be able to export those products, covered by the ITA, to the participating countries.

Mari said the ITA was the only accord reached at the Singapore meeting which would have direct impact on both developed and developing countries.

"If you add that (the ITA) to the possibility of liberalization in the basic telecommunications industry, that would possibly have an important direct impact on both sides," Mari said.

Trade ministers from 128 countries agreed in Singapore last Friday to achieve a successful conclusion to negotiations on basic telecommunications in February, 1997.

"If you look at the other aspects of the declaration, there is no direct impact as yet because the built-in agenda was not discussed very much," Mari said.

She suggested developing countries prepare themselves to make a stand and fight for their common interests in the next negotiations on the WTO's built-in agenda which start in Geneva in 1998.