The Hindu Business Line : WTO completes a decade

THERE is little doubt that, if one excludes the United Nations, the World Trade Organisation is perhaps the most important international body with a multilateral membership that has been set up after the Second World War. In fact, it can be argued that the UN appears to have lost some of its sheen after the end of the Cold War with the collapse of the Soviet Union in the closing years of the 1980s, and can, therefore, be described today as an organisation that has, in all probability, played out its role on the international stage and is on its way to a quiet burial. But not so the WTO.

Since its setting up in 1995, not only has it left an indelible mark on the way national economies conduct their international trade relations, but more importantly it has succeeded in laying down the guidelines for the future development of the global trade exchange based on principles which are totally different from those which influenced economies ties between the rich and the poor in the past.

As the outgoing Director-General of the WTO, Mr Supachai Panitchpadki, said recently, the last ten years "have transformed the way in which nations interact commercially," for which it must be said the WTO has been entirely responsible. The central core of the change that has been brought about is the rapidly growing realisation among the developing economies — led by the likes of India, China and Brazil, among others — that the future scenario of the international trade exchange does not necessarily have to follow in the footsteps of what has gone before — one where the rich have consistently leveraged their economic strength to get a better deal in bargains with the poor.

Instead, there is a new-found confidence among the "emerging economies" which is impelling them to turn on the pressure on the old, industrialised nations, the central message transmitted in the process being that the "traditionally" affluent nations can no longer take their poor brethren for granted, and that they (the former) will have to fight strenuously for every gain they expect to make at the negotiating table when discussing the emerging structure of international trade in the 21st century.

In fact, it is fascinating to plot the growth of this growing assertiveness on the part of the developing world vis-à-vis the industrialised nations on a graph containing the WTO ministerials, five of which have been held so far since the first one which took place in Singapore in 1996.

If one remembers, in 1996 there were the well-known four `Singapore issues' which, for the first time, clearly indicated that the rich countries would no longer have way in structuring world trade after a fashion that would benefit their economies. These four subjects — for inclusion in the WTO scheme of things — were put on hold, which constituted a first check on the international-trade ambitions of the rich.

Then came the Geneva ministerial meeting (1998) which, from a careful reading of the declaration, suggests it was deliberately meant to be a tame affair — some sort of a holding operation (mainly on the part of the rich), being used to recover from Singapore and plan for the future.

Seattle followed in 1999 where, for the first time in the history of international trade negotiations (or any economic negotiations for that matter), both the poor and the rich sides bared their fangs and, for the first time, the have-nots of the world economy refused to sign on the dotted line prepared for them by the affluent who, incidentally, were also their former colonial masters.

Indeed, it can be said that Seattle represents the crossroads in the evolving history of the global trade exchange where, for the first time, an alternative has opened up for the economically weak nations, the important point being that the rich too have come to acknowledge that the ballgame from now on will be totally different from the way it has been played in the past.

Since Seattle, there has been a sea-change in the perspective adopted by the developing economies at all WTO events, including of course the Doha (2001) and Cancun (2003) meetings. At Doha, negotiations were begun for the next round of multilateral trade negotiations, which would (like the Uruguay Round that preceded it) ordinarily mark a quantum jump in the organisation of international trade on the road to global liberalisation.

The Cancun conference was supposed to have been a stock-taking event, geared mainly to ensuring that the Doha Development Agenda was firmly on way to implementation.

As everyone knows, Cancun basically failed to deliver, the proof of that being the extension of the time schedule originally prepared for completion of the Doha process.

So where will all this take us from here? The stark truth is that, if there is going to be agreement at the end of the day, someone will have to give. If the WTO is going to get stuck in the quagmire of economic differences between the rich and the poor, is there any future left for the organisation — a thought which should be pondered over after a decade of its existence.

True, the organisation has enabled the developing world to find its voice at the table of multilateral trade negotiations (a long overdue development that). But will this hasten the process of a change in attitude on the part of the industrialised world, which basically means accepting the fact that space will have to be made for the economic demands of the poor economies, something that would have been rejected out of hand by the rich even a couple of decades ago.

As Mr Panitchpadki has pointed out so very cogently, the fundamental utility of the WTO will have to be seen a bit differently, by viewing it against the broader canvas of the evolving structure of the international economy. Briefly, the process of globalisation of the world economy has set in firmly, bringing with it a host of problems (`fears and concerns', as the WTO chief describes them).

While this process has nothing to do with the WTO as such, the problematic spin-offs of the transformation "have been laid at the feet" of the organisation.

To quote Mr Panitchpadki at some length: "The factors driving globalisation are numerous and complex. The WTO is not the problem but rather a part of the solution. There is no escaping the fact that global problems require multilateral solutions. Absent global rules which address the problems that stem from an often unpredictable and sometimes unsettling phenomenon, (and) we are left with uncertaintly, heightened international tensions and possibly chaos. Absent the rule of law, (and) we have the law of the jungle."

The truth is that even the rich cannot prosper in a jungle because a point will come where they will not hesitate to fight among themselves for available dwindling resources, which cannot but harm their own interests no end.

So it is beyond doubt that the WTO is indispensable at this juncture of the evolution of international trade. What makes it especially attractive is that it has helped to strengthen the position of the poor vis-à-vis the rich, thereby bolstering the forces of fairness in the hitherto unequal world of international trade.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Energising power sector

India as a brand

Rewind the tape, please

Are NBFCs being hounded out?

Event risk: To hedge or not to hedge

WTO completes a decade

On fringe taxes and all that — Rollback is not a dirty word

Budget proposals

Lalu will be back