It’s make or break time for free trade, says Supachai
The Nation, Bangkok
It’s make or break time for free trade, says Supachai
By Jeerawat Na Thalang, Geneva
4 May 2005
World Trade Organisation chief Supachai Panitchpakdi has described this month as a crucial period that could make or break the highly-anticipated WTO ministerial meeting in Hong Kong in December.
Although Supachai will not be in Hong Kong - he is due to step down from office months then - the first Thai to assume a top job in an international organisation does not want to see a repetition of Seattle, where the ministers landed overloaded with issues to resolve. “I would say that at the moment it’s again a crucial period in our negotiations,” he said.
Supachai wants members to reduce their differences on how best to open markets by July, before the summer break.
“All WTO chairpersons have been working very hard,” he went on. “They have gone out of their way to be inventive, and to work and encourage participants to work.”
Supachai has done a huge amount of travelling - logging up about 450,000 miles between the Cancun meeting in September 2003 and August 2004 alone, to try to convince members to put the WTO talks back on track.
But he said: “I have toned down the level of my optimism, [even though] I have always been an optimistic person . . . we haven’t obtained the results for our work that should have obtained”.
Currently, WTO members have moved from the framework agreement reached in July last year, to the final phase of negotiations to conclude the Doha round, which covers all aspects of trade. Delegates described the July Framework as the skeleton, adding that members would have to add flesh and blood to the agreements. And the devil is in the detail.
For instance, members have to define what kind of domestic farm assistance is permitted, what kind of anti-dumping measures should be acceptable and how to convert non-tariff barriers into tariff-based entities.
“If we don’t achieve this by July, I fear the worst,” he said. “We won’t have enough time before autumn,” Supachai said.
The US election and the appointment of new European Commissioners last year have slowed things down. And some developing countries have shifted their resources to negotiating bilateral trade agreements.
“I have challenged countries . . . that if they concentrated all their efforts in the multilateral sphere rather than on less meaningful FTA efforts, they would have made an agreement earlier than last year’s July package. We may have been able to wrap up negotiations earlier.
“My concern is that they have limited resources - if you are involved in one or two [negotiations], it’s okay, but if you are involved in five, six, eight or 10 FTAs . . . some countries are involved in more than 10 negotiations,” he said.
On agriculture, Supachai expects members to reach agreement on modality, such as how to convert non-tariff barriers into tax-based ones. But they must categorise domestic support into three categories: “green” supports are permitted, “amber” supports indicate domestic measures featuring trade distortion, and “blue” supports are somewhere in between.
On industrial goods, some countries want flexible tariff reduction.
On services, a certain benchmark must be achieved, moving away from just proposals. Kenyan ambassador to the WTO, Amina Chawahir, said just 52 of more than 140 members had submitted offers on how they were prepared to open up their services sectors.
On rules, “What we have heard from [members] is we need to see progress on anti-dumping,” he said.
Supachai has special concerns about the development dimension of the WTO.
“I hope that by July, we have done some work on special and differential treatment to developing and least-developed countries.”
Supachai said members should strive to end the round by 2007. “We need to have a real breakthrough if we want to have the final end game to the negotiations by 2006. The finalisation of a single undertaking should be in 2006, so we don’t have to wait until 2007, when the US trade negotiation authority is terminated in June,” he said.
Supachai, whose term is not subject to renewal, is set to leave the WTO by the end of August. He will become the next director-general of the United Nations Conference on Trade and Development (UNCTAD), having been nominated for the position by UN Secretary-General Kofi Annan.
Asked what he considered his most significant legacy, Supachai said the thing that made him proud was that developing countries in the WTO had been actively taking part, because it embodied issues in their interests, such as public health and technical assistance.
Secondly, he said, the WTO under his watch had for the first time been successful in getting rid of the worst form of subsidy - export subsidies.
“Probably, that is one of the achievements of which I am proud.”
Thirdly, he said the WTO had been working with other organisations, such as the World Bank, the International Monetary Fund and UNCTAD.
“I have sent a clear message that we cannot solve the globalisation enigma on our own, we need a coherent effort. For the first time, the heads of the IMF and World Bank had joint sessions with the [WTO] members, which has never been done before.”
Asked whether he had any regrets, he said: “Efficiency is something that’s important. I know that in order to beat the FTAs, you have to be as efficient as you can. You just cannot let go of any of our goals here, you have to be inclusive, democratic and transparent here, as well as being efficient. There’s no trade off, you must have to have them all and efficiency is something people take for granted, I regret not having the authority or the leverage to do something.”
