WTO strengthens

The two-year-old World Trade Organization has successfully passed the first test of strength and stature as the ruler of the global trade system. Its five-day inaugural ministerial conference in Singapore, which at the outset was predicted to be in danger of turning into top-level, endless wrangling between developed and developing countries, ended on Friday with a big victory for all members. That reflects the 128 members' commitment to freer global trade as the best way toward mutual prosperity.

The eight-page declaration which forms a blueprint for the future agenda of the world trade body reaffirms the members' commitment to dismantling tariffs and nontariff barriers to achieve the goal of sustainable growth and development for the common good.

The resounding success of the meeting will surely build confidence and mutual trust among the members of the strikingly different levels of development for future negotiations on additional measures to further liberalize international trade. Mutual trust is indeed crucial to the completion of the unfinished business of the trade liberalization program.

The conference even agreed on a special plan of action to help the least-developed members respond to the opportunities offered by the free trading system, and to eventually integrate themselves into the system.

The crowning outcome of the Singapore meeting was surely the conclusion of the Information Technology Agreement which will scrap tariffs on information technology products by the year 2000. The breakthrough in information technology trade should be credited for the cooling down of the pressure-cooker atmosphere surrounding the contentious issues -- labor rights, competition policy, multilateral investment treaty and government procurements.

It is encouraging to note the declaration did finally accommodate all the new issues which were previously regarded taboo by most developing country members. Though these issues will not be brought to the legally binding negotiation table in the near future, their inclusion in the declaration is the first step toward being included on the future agenda. After all, the WTO will sooner or later have to deal with these problems.

As regards to labor standards, considered the most contentious issue, the declaration renews the members' commitment to the observance of internationally recognized core labor standards, but assures that the International Labor Organization is the competent body to deal with those standards. Of utmost importance to the developing countries is the stipulation that labor standards shall not be used for protectionist measures. The conference also agreed that the comparative advantage of countries as regards to wages shall in no way be brought into question.

The meeting agreed only to launch studies on global trade's relationships with investment and competition policy and to conduct additional work on government procurements.

Indonesia and other developing members -- even though getting the most of what they wanted out of the meeting -- should not, however, forget the clear message from the strong debates in Singapore. The issues, notably those on government procurement, competition and investment policies, will sooner or later enter the WTO agenda. As the process of economic globalization accelerates, these issues will become more inter-linked with trade.

Indonesia should therefore design domestic policies to address these problems. After all, the objectives to be achieved by addressing these problems -- a more transparent process of awarding government contracts, preventing anticompetitive practices and more uniform investment rules -- form part of the policies required for sound economic management.