WTO articles tilted towards developed countries

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Developing countries have to join their hands to safeguard their interest

By SHABBIR H. KAZMI
May 14 - 20, 2001

Since 1948 formation and then implementation and monitoring of these rules pertaining to international trade was done according to general Agreement on Tariff and Trade (GATT). From 1986 to 1994 under this agreement new rules of the game were prepared and various agreements were signed and the World Trade Organization (WTO) replaced the GATT. The broad objective behind creation of the WTO was to ensure free trade among the members through gradual withdrawal of tariff and non-tariff barriers. However, some of the recent demonstrations, throughout the world, indicates an immense resentment against the WTO.

The Export Promotion Bureau with the assistance of Pakistan's representative at WTO and FAO organized a seminar on Agreement on Agriculture(AoA) and Sanitary and Phytosanitary Measures (SPM). The objective was to let the Pakistani business community know about the various agreements and their implications for the country. It was a two-day seminar and experts provided the details about the agreements. The AoA is considered one of the most important in a set of 30 agreements and generally viewed a threat to food security of the developing countries because over 50 per cent of the population of these countries is involved in agriculture. This agreement provides an opportunity to transnational corporations to virtually control the income and food of the most vulnerable.

The WTO was established to promote the free market ideology and many issues were redefined, including the meaning of trade. However, it appears that many areas once considered the domain of state are now being takenover by the WTO — including agriculture. In the post world war II era a regime was created to favour the protectionist environment for agricultural production and trade as it suited the USA. High subsidy levels as well as strict import controls were placed which resulted in surpluses which are now being diverted to rest of the world.

Concerns

The general consensus at the seminar was that WTO members were distinctly divided into two categories, developed and developing countries. Most of the articles and agreements are tilted towards developed countries. To bring a change or amendment in these articles developing countries will have to join their hands to reap the real benefits of globalization.

It was also marked that while the developed countries insist on continuation of their past practice, developing countries are being forced to open up their markets and also withdraw the subsidies provided to agriculture. It was also observed that developed countries provide subsidies to many sectors, agriculture in particular, which comprise of a small percentage of population. These groups may be small but enjoy enormous political clout and are capable of pressurizing their governments to continue subsidy on farm products. As against this a country like Pakistan has to protect the interest of millions of people, nearly 60 per cent of total population, dependent on agriculture. Therefore, subsidy on farm products is necessary to avoid any distortion in social fabric.

As regards textile quota phase out and its integration in free trade regime, the experience of developing countries may be expressed as 'completely disappointing'. Some of the textile products have been termed 'sensitive' by the developed countries and their integration is being done at a very slow pace. These products are the main foreign exchange earners for the developing countries. Despite the claim by the developed countries that their markets are open, they resist import of various commodities from the developing countries by imposing non-tariff barriers.

While quota regime is being phased out, imposition of anti-dumping duties to protect the local industries has become common. Often the dumping allegations are based on very weak grounds and quantitative restrictions and anti-dumping duties are imposed. Even if a country on which these measures are imposed wins the case it has to bear colossal legal expenses and loss of business. One is forced to draw a conclusion that by imposing such duties and quantitative restrictions, breathing space is provided to local industry.

Trade blocks

Regional trade blocks, mostly created by the developed countries, are against the spirit of the true concept of globalization. These blocks are sponsored and controlled by the developed countries and a few developing or least developed countries are included. These peripheral countries are often the source of supply for low cost manpower and raw materials for the developed countries. The added advantage is that they also become a protected market for the items produced by the developed countries.