WTO urged to address corruption

WTO urged to address corruption

By Vincent Lingga

SINGAPORE (JP)): Business leaders and senior trade officials
from the developed countries suggested yesterday that the first
ministerial meeting of the World Trade Organization (WTO) here in
December address the issues of corruption, competition and
investment, as they are closely related to trade facilitation.

The businessmen and officials, who are attending the two-day
World Trade Congress which opened at the Shangri-La Hotel here
yesterday, wish to include those issues among its most important
future agenda for WTO.

WTO's Director General, Renato Ruggiero, also touched upon
those issues in his speech during the first session of the World
Trade Congress, which was opened by Singapore's Prime Minister
Goh Chok Tong and was attended by around 500 business leaders and
officials, including 20 ministers and academicians from around
the world.

Ruggiero said the United States had proposed that corruption
be taken up at the WTO's first ministerial meeting in Singapore
in December as one of the trade-related issues.

"There hasn't been any real discussion about this. But I am
not implying that the issue is unimportant," Ruggiero later told
a news conference after his address.

He added that it would be hard to deny that this is a concern
which is at least worth serious consideration.

The Paris-based International Chamber of Commerce (ICC) also
urged that the forthcoming WTO ministerial meeting launch a
thorough study to evaluate the global impact of corrupt practices
on distorting international competition and cross-border trade.

"The ICC recently updated its 1977 report on extortion and
bribery in international business transactions, which proposes
guidelines for concerted actions by governments and businesses to
curb corruption in international commerce," the business
organization said in a statement to the conference here.

The main point of view of the proponents of corruption as a
trade-related issue is that bribery and graft have been
undermining efforts to liberalize trade and to open world
markets.

They argue that if left unchecked, corruption and bribery can
negate the market access gained through tariff reductions and
other measures taken under WTO.

Leon Brittan, Vice President of the European Commission, said
the best way to address the corruption issue is through
negotiations at WTO about rules on government procurements.

The two-day World Trade Congress, organized by the Singapore
Trade Development Board and the International Herald Tribune
newspaper, is designed to collect workable initiatives on a
diverse range of pending trade issues to be taken up by the first
WTO ministerial meeting here in December.

Ruggiero recognized the hesitation on the part of several of
the 120 members of WTO to negotiate investment rules under WTO,
but he also stressed the crucial role of foreign direct
investments to further strengthen the economic interdependence
between the developed and developing countries.

However, he also stressed the need for countries to attract
foreign investments and to ensure their basic security in a
credible way.

"It is hard to see how this can be done effectively or
equitably outside the multilateral trading system," Ruggiero
said in emphasizing the importance for developing countries to
take part in shaping decisions on any future international
agreements on investment.

The International Chamber of Commerce suggested yesterday that
WTO start work shortly on a truly global framework of rules and
disciplines to govern cross-border direct investments.

Ruggiero also agreed that international rules on business
competition should be part of WTO agenda.

Brittan concurred that stronger multilateral rules for
investments are required.

"Recent cases of trade friction in the areas of automobiles
and photographic film show that the perceived inadequacy of the
rules of competition around the world is becoming a source of
friction," Brittan noted.

Moreover, Brittan added, such rules are needed to ensure that
multinational companies, once allowed to invest, will not abuse
their dominant positions in the emerging markets.

The main argument of the proponents of the competition policy
is that a market is not really open until foreign firms enjoy the
same opportunities for producing and marketing goods and services
as those given to domestic firms in that particular market.

The issue of labor standards, which in the past had often been
raised by the U.S. and the EC as a major trade-related issue did
not appear as a contentious issue at the meeting yesterday.

Ruggiero noted that both the U.S. and EC delegations have
finally agreed that any WTO discussions must not have as an
objective the enforcement of core labor standards through trade
sanctions, nor put into question the comparative advantage of
low-wage countries.

Brittan said yesterday that the issue of labor standards
should be addressed through the Geneva-based International Labor
Organization.

"We don't regard low wages as an unfair trading practice, but
as the natural comparative advantage of a country," Brittan said,
in referring to the new attitude on the part of the EC on what
has been called social dumping.

Brittan also said that the EC would not in any way seek
coercive trade measures on labor standards. (vin)PB

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