EU seminar on trade issues

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There should be no discrimination between developed and developing countries

From SHAMIM AHMED RIZVI, 
Islamabad
July 09 - 15 , 2001

The European Union (EU) comprising presently of 15 highly industrialised and economically advanced countries of Europe, which is preparing for the 4th World Trade Organisation (WTO) ministerial conference scheduled to be held in Qatar in the coming Nov. appears appreciative of the concerns of the developing countries about WTO programme of removing trade barriers and having a free global trade.

This view was formed by this correspondent after attending a 3-day seminar arranged by EU commissions Director General trade "on trade issues'' in Brussels for a group of 15 journalists from the less developed and newly industrialised countries. Only one journalist was invited from each country and the participants represented Buenos Aires, Argentina, Sau Paolo, Brazil, Santiago, Chile, Cairo, Egypt, New Delhi, India, Jakarta, Indonesia, Seoul, Korea, Kuala Lumpur, Malaysia, Mexico City, Mexico, Islamabad, Pakistan, Johannesburg, South Africa, Bangkok, Thailand, Caracas, Venezuela.

The developing countries are apprehensive of the WTO programme of free global trade by the year 2003 abolishing custom tariff and other restrictions on free movement of goods and services between world countries. The developing and less industrialised countries feel that in such a free trade atmosphere they would not be able to compete with highly industrialised countries who are, besides having better technology and quality of production, also endoying economies of large scale production. They apprehend that whatever little industrial base they have acquired will be destroyed, if trade restriction are removed in such a short time as demanded by WTO. The developing countries demand this time frame be extended upto 2010 and developed highly industrialised and rich countries should provide material help to the developing nations to improve their competitiveness to ensure that they get their due share in the free international trade. The European Union, it appears, share this concern of developing countries.

Held in the fun-up to the WTO meeting in Doha (Qatar) the seminar aimed at giving a thorough briefing on European Union (EU) vis-a-vis trade policy with the developing world. The programme include lectures by experts, penal discussions, meetings with senior officials dealing with EU trade issues and working of the EU parliament, council and the commission. The seminar proved highly informative for the participants as it gave them opportunity to familiarise themselves with the structure and working of EU, European commission and other institutions. It also enabled the EU officials to understand the point of views of different developing countries, their concern and worries about WTO programmes.

Preparing for the coming WTO Ministerial conference, the commission seems to be of the view while that being aware that the globalisation process is a trend that cannot be stopped and that economies must adapt to survive, the Union does not accept that unfettered market forces should dictate its peoples' way of life, culture and ultimately their society and core values. As a result, it sets out to reconcile the way societies and values are managed with the need to modernise and globalise.

In this respect, the commission sees the WTO, with its membership of over 130 countries — and a further 30 queuing up to join it — and wideranging powers to set rules and arbitrate in trade disputes, as a crucial institution for global governance.

"The WTO should cooperate more closely with other international organisations to promote the overall goal of sustainable development and contribute to the reduction of inequalities, both within and among nations. That is why the EU favours regular consideration of that relationship between trade and social development, including the promotion of core labour standard. It supports positive incentives for promoting labour rights and is firmly opposed to any protectionist or sanction-based approach."

Commission supports China membership in the world trade organisation. They are of the view China has undergone dramatic changes since it opened up to the outside world in 1978, evolving from an inward-looking centrally planned economy to a market driven one engaged in global commerce. During the past two decades, EU-China trade increased more than 20 fold and was worth 70 billion euro in 1999. China is the Union's third largest non-European trading partner after the United States and Japan and the EU is China's fourth largest source of imports. In 1999, the Union became the largest foreign direct investor in the country, excluding Hong Kong, with 4.5 billion euro.

The union has been a strong supporter of Chinese membership of the World Trade Organisation and has worked closely with the United States to help bring this about. In summer 2000, the two parties completed their lengthy bilateral negotiations on China's accession to the WTO. The agreement will give a major boost to trade between the two.

Under the terms of the EU-China WTO accession agreement, China agreed to substantial reductions on import tariffs for over 150 leading European exports, ranging from machinery to wines and spirits. The accord will make it easier for European distributors and companies to operate in China and restrictions which used to apply to a number of service sectors and professions such as bankers and lawyers will also be relaxed.

The European Union is the world's biggest trading partner, accounting for over a fifth of all exports in 1999. Since its earliest days, the EU has been committed to removing trade barriers between its individual members on the grounds that this will stimulate economic prosperity and national and individual well-being. It has championed the same principles on the world stage.

The figures speak for themselves. The multilateral trading system has been progressively liberalised through a series of international negotiations over the past half-century. During that time, world trade has grown seventeen-fold, world production has more than quadrupled, world per capita income has doubled and average tariffs applied by industrialised countries have dropped from 40% in 1940 to under 4%.

"The EU believes that multilateral trade liberalisation can yield very substantial benefits for the global economy and that much of this should go to developing regions. It considers that economic growth through trade liberalisation is a major factor in improving social conditions worldwide and contributing to sustainable development."

The Union is one of the strongest advocates of continuing this trend by pressing for as wide an agenda as possible in the next round of World Trade Organisation (WTO) talks involving 137 countries. Despite the setback at the ministerial meeting held in Seattle in December 1999, the EU is still committed to a broad agenda and is convinced the benefits will be significant.

"As part of this wide ranging agenda, the EU is in the vanguard of countries arguing that the next WTO negotiations should not be limited to the narrow agenda of agriculture and services left over from the last Uruguay round. It must be more comprehensive, covering both traditional topics and new issues to allow all participants to have an interest in the negotiations and meet the need of the economy of the 21st century."

The Union has drawn two clear lessons from the failure to open the liberalisation talks in Seattle. The first is that the days when a handful of major trading nations negotiated deals among themselves and imposed them on the rest of the world are over. Others, particularly developing countries, now legitimately demand a bigger say in the process."

"The second is that the WTO must be reformed to make it more inclusive, transparent, efficient and accountable. Its rule book needs to be rewritten and civil society more closely involved so that environmental and social concerns can be considered alongside trade and development."

When a new round of WTO negotiations is launched, the Union believes it should cover at least four main areas if it is to be comprehensive and successful. In the EU's view, the round should improve market access across the board, including agriculture services and non-agricultural products.

Set rules in a number of new areas such as investment, competition and trade facilitation.

Focus more on development by providing better market access and improvements to the special and differential treatment accord to developing countries, as well as ensuring that new agreements promote development.

Address a number of civil society concerns, by clarifying WTO rules on trade and environmental agreements, labeling, public health and the application of the precautionary principle. This should be done with a view to ensuring that rules are mutually supportive and the measurers taken do not constitute a means of 13 arbitrary or unjustifiable discrimination between countries.