[asia-apec 297] FOCUS-on-APEC No.9 Part IV

[gonzalo]

Non-Transparent Process

One of the most striking features of the WTO process at the SMC 
was the lack of transparency even for delegates themselves. The 
Secretariat and host of the SMC seemed to use their privileged 
position in favour of the US, EU and other more powerful trading 
economies.

The main negotiations took place in informal group meetings 
between about 30 countries out of the total 127 members. This 
group was chosen by the Chairperson, Yeo Cheow Tong and the 
Director General Renato Ruggerio. There had been no prior 
consensus about how the composition of the group had been 
arrived at. This left many delegates of the developing countries 
unaware of where the critical negotiations were talking place and 
what the latest developments were. 

Given that enough of them voiced complaints,  the issue of the 
need for greater transparency was addressed in the final press 
conference delivered by the WTO Secretariat. Both Ruggerio and 
Yeo explained that in wanting to maintain a certain level of 
efficiency, they had chosen a group that was representative of a 
diversity of interests. 

They acknowledged that the transparency process had to be 
improved in the future but without compromising on efficiency. 
When asked how they envisaged doing this, however, they said 
that it was yet to be decided. 

It is alarming that an important issue such as the equal 
participation of a member-driven organisation is not even given 
time and space for reflection at the SMC, highlighting again, the 
power imbalance at work at the conference. 

Human Resource Imbalance

The other major factor that is the reason for the huge power 
imbalance in the WTO process is the stark difference in human 
resource capacity between the countries. The US, for example, sent 
over 100 delegates to the WTO, while most of the developing 
countries had about 6 or fewer representatives. 

Similarly, on a day-to-day basis, many of the developed countries 
have a team of 12-14 persons working solely on the WTO in 
Geneva. This does not include the huge numbers that will be 
working on WTO issues in their capital cities. In contrast, of the 29 
LLDCs, only 10 of them have a permanent office in Geneva. And 
most of them only 1 or 2 persons in their office covering the work 
of all the international bodies based there. 

Therefore, while the rules based system is being expounded as one 
of the best features of the multilateral trading organisation which 
will benefit the developing countries, the poorest of these 
unfortunately do not possess the resources needed to make full use 
of the system, nor the technical expertise required. The WTO 
Secretariat is currently offering courses to trade officials of 
developing countries in order to upskill the bureaucrats on the 
technicalities of trade. Developed countries too are offering some 
amount of technical assistance. The help offered, however, is but a 
drop in the ocean in comparison to the need.

In the meantime, decisions which have a huge impact on the lives of 
millions in these countries continue to be made for these countries 
within the WTO. 

The WTO: Towards a Resolution of the World Crises or an 
Impending Disaster?

The aim of completely liberalising trade in the many areas covered 
by the WTO, or Ôfree tradeÕ, is often made out to be the best 
solution to many of the problems countries are facing today. In the 
past, however, we have seen different economic theories coming 
into vogue and going out of fashion again, as solutions do not seem 
to be forthcoming. 

Likewise with the current trend. Although free trade is often made 
out to be the necessary path to tread by its proponents, it remains 
an economic theory. The world is its laboratory. In fact, the exact 
formula, the chemicals and their quantities used in this particular 
laboratory test are arbitrary, and are largely decided, as the 
experiment progresses, by the most powerful economies. The 
chemicals prescribed are those which these rich economies have in 
abundance. The poorer countries find that they have to pay a very 
high price in order to partake in this experiment.

Take for example the issues and areas in the WTO where most 
work is being carried out. The developed countries have been 
dragging their feet in the liberalisation of areas that would most hurt 
their economies. Developing countries had consented to having the 
Multifibre Agreement (MFA) in the early 1970s because they had 
been promised that market restrictions in textiles and clothing in 
the developed exporting countries will be reduced after an interim 
adjustment period. However, the MFA was instead renewed every 
4-5 years for the next two decades with no sign of liberalisation. 
This situation changed only with the completion of the Uruguay 
Round. Even then, there has hardly been any progress in 
liberalisation in this area. Likewise, although the removal of direct 
subsidies to farmers in the EU and US would mean fairer trade in 
agriculture and would stop the destruction of the agricultural sector 
in many developing countries, progress here is also slow. Since it 
would impinge on the interests of the US and EU, there is little 
political will to hasten the liberalisation processes.

In contrast, almost total liberalisation in new areas such as IT and 
telecommunications are being implemented within a short period of 
time. Here, liberalisation is put on the fast track with the reasoning 
that it is beneficial for everyone. What sectors and issues should be 
made a part of the global Ôfree tradeÕ agenda therefore really 
depends on which countries hold more clout in the trading regime 
and hence are poised to have their wishes implemented. At the 
same time, the reigning ideology propagated is that the particular 
path set out is the only possible and best path to take.

Furthermore, no one really knows what the exact benefits of this 
Ôfree tradeÕ experiment will be for the poorer countries. The 
benefits of the complete implementation of the Uruguay Round 
had been estimated at $500 billion at the end of 1994. The WTO 
economists have found that this was too liberal an estimate and has 
brought the figure down to the range of $300 billion. According to 
most accounts, the actual effects by many of the poorest countries, 
a large number of these are in Africa, will in fact be negative. In 
response to this, Richard Blackwell, the chief economist of the 
WTO at the SMC said that this was because these studies had 
focused mainly on the lack of market access African countries had 
in terms of world trade. In contrast, WTO estimates positive gains 
by these countries because they factored in the gains of small 
economies by having a rules based trade organisation with a dispute 
settlement system. Despite the optimism about the benefits of 
such a structure, to date, none of the LLDCs have yet to bring a 
dispute to the WTO Secretariat. The country that is using the 
system most frequently is still the US. 

So while the effects of what is being implemented now, especially 
on the majority of poorer countries have not been thoroughly 
looked into, the work of the organisation charges ahead. Its effects 
changing the lives of millions worldwide. 

The Secretariat is also proud of the fact that there are a string of 
countries knocking at the door of the organisation wanting to 
become members. This is used as justification of the good and 
desirable work of the body. In reality though, poorer countries 
have little choice in the matter. They either get themselves 
registered as a member of the laboratory experiment, or get totally 
isolated. Many only begin to realise the implication of GATT / 
WTO decisions after these have been agreed to.

A continuation of the way the WTO currently functions will lead 
the world head-long towards a catastrophic end, especially if 
domination by certain countries remains the status quo without 
any regard for the needs of the poorer economies.

Ultimately, such as system will essentially mean the rich countries 
institutionalising and justifying, through a supposedly rules and 
consensus-based global organisation, their colonisation over the rest 
of the worldÕs resources.

If the WTO is to truly work in the interest of all its members, it 
must change its bullying tactics. As a global body, the excuse that it 
works in a non-transparent manner for greater efficiency is a flimsy 
one, and greatly threatens the credibility of the organisation. 

In order to be an organisation which governs multilateral trade and 
one which aims to work for the benefit of all its members, it has to 
be cognisant of the fact that a power imbalance exists in the 
organisation and the current process employed only reinforces this 
imbalance. It must therefore hold as top priority, the righting of 
such an imbalance. This would mean keeping in focus, the needs of 
its diverse members, especially the majority developing countries. 

There should not therefore be a dichotomy drawn between trade 
and development. It is commonly assumed that the WTO should 
engage in trade issues and leave the development concerns of its 
members to other international agencies. The reality, however, is 
that while the WTO does not concern itself very much with the 
development needs of its poorer members, it certainly is extremely 
concerned with those of its richer members. Hence, its 
preoccupation with IT; the introduction of services and intellectual 
property rights into the GATT, the WTOÕs predecessor; as well as 
attempts to bring in such issues as the liberalisation of investment 
under its auspices. These are obviously areas that would benefit 
the richer countries given their particular stage of economic and 
industrial development.

Since the patterns of trade will impact positively or negatively on 
all countries in myriad ways and also affect the development 
concerns of countries, these development needs must be kept at the 
forefront. For example, the WTO must make it its concern that 
there are 800 million suffering from chronic hunger amongst its 
member countries. The fact that there are 1.3 billion who occupy 
the ranks of extreme poverty - a fifth of the worldÕs population, 
and that this poverty is a feminised phenomena should also be a 
concern. Furthermore, it must also keep in view the fact that the 
crisis of today is an ecological one. 

Since these are the conditions many WTO members are grappling 
with, the organisation can only claim to meet the needs of its 
members if it continually evaluates its policy impact on these 
realities and allows itself to be an enabling factor in the resolution 
of these crises. 

In this process, it must ensure that it gives countries the 
sovereignty and right to choose the path of development that meets 
their needs. There is no blanket solution for all economies. 
Countries must not be arm twisted into liberalisation. Trade 
liberalisation can be enabling, but how much and in which areas 
must be decided upon on a country-by-country basis and with 
great discretion. 

*Aileen Kwa is a research associate of Focus on the Global South. 
She is also currently pursuing her Phd in Development Studies at 
the University of Auckland. 
______________________________________________________
ANNOUNCEMENTS

Will TodayÕs Asia-Pacific End up like Europe in 1914?

This is one of the concerns that has prompted the Peace Research 
Institute of TokyoÕs International Christian University, Focus on 
the Global South of Chulalongkorn UniversityÕs Social Research 
Institute in Bangkok, and BerkeleyÕs Nautilus Institute for Security 
and Sustainable Development to sponsor a conference on 

ALTERNATIVE SECURITY SYSTEMS IN THE ASIA 
PACIFIC REGION

at Chulalongkorn University in Bangkok, Thailand, March 27-30, 
1997. 

In the aftermath of the November 1996 APEC Summit, the Asia-
Pacific region may look relatively placid, but it is actually a 
thinderbox of territorial disputes, resource conflicts, antagonisms 
inherited from the Cold War, and a variety of internal struggles 
with external impacts. 

With the end of the Cold War, hopes were high that conditions of 
lasting peace would be created in the region. However, prosperity, 
instead of spinning off peace, has sparked an arms race, and, 
despite some tentative initiatives, a multilateral system to preserve 
the peace is nowhere in sight. Instead, what passes for a regional 
security system is a volatile informal system with three legs: 
continuing US unilateralism, balance-of-power diplomacy, and 
arms races. There is, indeed, a resemblance between fin-de-siecle 
Asia-Pacific region and late 19th century Europe, which was 
entrapped in what Henry Kissinger called Ôthe balance-of-power 
doomsday machine.Õ

NGOÕs and peopleÕs organisations took the lead in opposing the 
nuclearization of the Pacific during the Cold War. In the post-Cold 
War era, however, aside from the nuclear question, security issues 
have not had as much prominence among NGO concerns as 
environment and development issues. Indeed, the much-vaunted 
Southeast Asia Nuclear Weapons Free Zone (SEANWFZ) is 
largely a governmental initiative, and there is little genuine NGO 
participation in the ASEAN Regional Forum.

Yet civil society throughout the world has been full of rich 
explorations into new concepts of security, such as real security or 
comprehensive security. There is also an increasing recognition by 
citizensÕ groups that multilateral security systems are not enough, 
and lasting peace can only be achieved via people-centred security 
systems rather than state-centric ones. 

This conference seeks to bring the security question to the top of 
the agenda of civil society in the Asia-Pacific. Activists and 
academic experts, citizens and selected representatives of 
governments and multilateral organisations from various parts of 
the region will come together for a close look at the points of 
tension and conflict in the region and discuss ways to create the 
new institutions of peace and security that are so necessary if the 
region is to avoid the fate of Europe of 1914.

For more information, please get in touch with:

Alternative Security Conference Secretariat
Focus on the Global South
Chulalongkorn University Social Research Institute
Phyathai Road, Bangkok 10330, Thailand

Tel: 662 218 7363  Fax: 662 255 9976  Email: focus at ksc9.th.com
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Book Launched at Manila PeopleÕs Forum on APEC Now 
Available!

ÔAPEC: Four Adjectives in Search of a NounÕ is an exciting 311 
page volume containing
- An APEC Primer
- Profiles of 18 economies and leaders
- Original confidential ÔIndividual Action PlansÕ for liberalisation 
submitted by each country

Limited number of copies are available at US$50 only. This amount 
covers air mail / shipping expenses. To obtain a copy, please send 
your money order / bank draft to 

Focus on the Global South
c/o CUSRI, Wisit Prachuabmoh Building
Chulalongkorn University
Bangkok 10330
Thailand
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Watch Out for the Next Issue of Focus-on-APEC!

The coming issue of FOCUS-on-APEC will consist of all the 
presentations and available transcripts of discussions at the Manila 
People's Forum.
______________________________________________________
FOCUS-on-APEC is produced by Focus on the Global South 
(FOCUS). Edited by Aileen Kwa. Contact information: c/o CUSRI, 
Chulalongkorn University, Bangkok 10330 Thailand. Tel: (66 2) 
218 7363/7364/7365, Fax: (66 2) 255 9976, E-Mail: 
focus at ksc9.th.com, Website: http://www.nautilus.org/focusweb