Saturday, September 23, 2006 Libre: Towards a new economic order By Mel Libre Seriously Now
It was supposed to be the “Seattle Round,” but with the violent protest actions that erupted as trade ministers hammered in 1999 the foundation of a multilateral agreement for a tariff-free and open market regime, it became the “Doha Round” two years later.
The Doha Development Agenda adopted in Doha, Qatar in 2001 started the process to open agricultural and manufacturing markets as well as allow equal opportunities in trade and services. From Doha, the talks continued in Cancun (2003), Geneva (2004), Paris and Hongkong (2005).
While trade ministers’ meetings were natural targets of violence-prone protestors, the debates among the participants were heated as well. Developed nations remained protective of the subsidies given to their farmers while developing countries felt that the new trade system would leave domestic industries vulnerable to foreign competition.
In July this year in Geneva, the talks broke down with disagreements on the reduction of farming subsidies and the lowering of import taxes. Years of work and negotiations and their huge cost will go down the drain, as time is ticking when the broad trade authority given by the US Congress to President George W. Bush expires in 2007. If the US cannot commit, why should the rest of the world?
The current impasse was blamed primarily on the refusal of US and Europe to further cut farm subsidies and agricultural tariffs. But an official said that another stumbling block was “the proposal by the G-33 group, led by Indonesia, India and the Philippines, to let developing countries exclude up to 20 percent of their agricultural tariff lines from significant cuts.”
A global economic structure has to develop with the contraction of the world as a result of advances in technology, faster transportation and standardization of principles and practices in trade and services. But should it be done so soon when there is still a wide gap between developed and developing countries? How would poor and underdeveloped economies grow in a regime of “survival of the fittest”?
If the US and Europe do not find urgency in trade liberalization, it is because they can survive within their sphere: the US with its strong economic ties with Canada and other neighbors and the European Union with its continuing consolidation of its economic might in the Old Continent.
Countries should not just jump into the trade liberalization wagon. There has to be a half-way house before economies open up their markets. If US has its Nafta and Europe has the European Union so must, say, Asia have its United Asia or Asian Union with Japan, Singapore and South Korea at the lead joined in by China, India and the Asean.
Once multi-nation regional economic groupings have established themselves as functional and cohesive bodies, then can the leap towards the neo-liberal world economic order be made. Thus, the stalemate of the Doha Round may after all be a blessing for developing and underdeveloped nations.
