WTO on the agenda at APEC summit in Seoul

Alexander C. Chandra, Jakarta

The Asia-Pacific Economic Cooperation (APEC) summit in Busan, Seoul this weekend, is widely expected to bring new hope to the stalled ongoing multilateral trade negotiations at the World Trade Organization (WTO). Trade ministers from the Asia-Pacific region have even agreed to issue a strong commitment to support the global free trade agreement under the auspices of the WTO. Indeed, WTO is in need of fresh infusion so that the Doha Round of negotiations can be completed as scheduled at the end of 2006.

Several trade ministers, including those from the U.S, EU, and Brazil, began to lower their expectations for the successful completion of the WTO Ministerial Conference last week, which will be held next month, in Hong Kong. This development reflects the growing frustration among the majority of WTO members.

The initial expectation of being able to reach "full modalities" by the time of the Hong Kong ministerial is now reduced to "half modalities", with some member countries even speculating on the possibility of a Hong Kong II round. It is for this reason that trade ministers from APEC member countries, which account for nearly half of global trade, are committed to make Hong Kong a historical site for a successful round of world trade negotiations.

The issue of agricultural subsidies is still a major area of contention in the current negotiations of the WTO. Major developed countries, such as the U.S., Japan, and the EU, are still reluctant to remove their agricultural subsidies, while, at the same time, desperate to get wider market access to developing countries. This is ridiculous. Most developed countries are champions of global free trade. The question, then, is how can global free trade be achieved if the developed countries are reluctant to open up their markets?

The stalled negotiations in the area of agriculture have a significant impact on other areas of negotiations, including non- agricultural market access (NAMA), services, etc. The stance of most developing countries is that negotiations in these areas could only proceed once there is significant improvement in the agriculture negotiations.

However, one thing for sure is that APEC is only one of the small preliminary ministerial meetings prior to the Hong Kong ministerial. Learning from the past failure of the ministerial meetings in Seattle (1999) and Cancun (2003), major member countries, particularly developed ones, are increasingly keen to conduct these mini-ministerial meetings in the hope that WTO member countries will be more ready to agree on most of the negotiated issues by the time the Hong Kong ministerial takes place.

Both developed and developing member countries of APEC are certainly hopeful of achieving a successful conclusion of the Hong Kong ministerial. But it is not realistic to expect industrialized countries like Japan and the U.S. to make major concessions in the agricultural sector as they have shown in other multilateral trade negotiations

Another important issue that has failed to attract media attention so far is the growing resistance from various civil- society groups throughout the Asia-Pacific region. They continue questioning the very notion of global free trade. So far, many elements of the society, throughout the Asia-Pacific region, are still unconvinced that free trade could improve the economic standards of the people.

To start with, it is very doubtful that total free trade can be achieved between developed and developing countries. Many developed countries have been trying to penetrate the markets of developing countries for ages, and, if possible, swallow all the resources available in the latter.

We can learn from the experience of several Latin America countries in facing free trade agenda. At the height of the debate about the possible formation of the U.S.-backed Free Trade Area of the Americas (FTAA), Hugo Chavez, the Venezuelan President rose to reject this proposal. Amongst other things, Chavez argues that the very essence of cooperation would be replaced with the notion of competition as soon as free trade takes place. Undoubtedly, developed countries, with their technological advancement, would easily outrun the developing countries in global trade competition.

Similar concerns also prevail among protesters of both APEC and the WTO. These protesters are aware that the drive toward global free trade must be questioned before it goes too far. Moreover, although development has been the key issue of the current WTO round of negotiations, the current state of play at this multilateral trade body tends to reflect an antidevelopment agenda.

Unlike APEC trade ministers who are hoping for a successful round of negotiations at the WTO ministerial meeting next month, many civil-society groups from all over the world are hoping once again to become the victor in the "Battle of Hong Kong". However, as a result of their past experiences, WTO member governments, particularly the developed ones, are very keen to ensure the success of the Hong Kong ministerial meeting.

The writer is a Research Coordinator at the Institute for Global Justice (IGJ). He can be reached at alex@globaljust.org.