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WTO-CANCUN: And What of South-South Trade?
By Ramesh Jaura
CANCUN, Sep 13, 2003 (IPS) - Developing countries should be given effective access
to markets of developed countries, but south-south trade is equally significant,
says Foreign Trade Minister for the Netherlands Karien Van Gennip.
"Large gains are to be made in opening their markets to each other," Van
Gennip told IPS as negotiators from 146 WTO member countries struggled
Saturday to achieve a consensus on a text covering a broad range of issues.
"This should be a further impetus to the so-called south-south trade."
According to the World Trade Organisation (WTO), global trade in
merchandise last year amounted to about 6,240 billion dollars. Trade in
commercial services expanded to 1,540 billion dollars.
The ten leading exporters and importers in world trade in goods were the
United States, Germany, Japan, France, China, Britain, Canada, Italy, the
Netherlands and Belgium.
The value of goods exchanged worldwide among the developing countries is
reported to amount to some 1,560 billion dollars.
Van Gennip said it was necessary to eliminate barriers to trade in both
industrialised and developing countries. The Doha Development Agenda
agreed two years ago in the capital of Qatar will be vital for this, she said.
The WTO has estimated that this could result in welfare gains ranging from
250 billion to 620 billion dollars annually. A third to half of this amount would
accrue to developing countries.
According to the World Bank, middle-income countries generally have lower
and less distorting protection in agriculture than the industrialised countries, but
have high average tariffs in all sectors, and are more restrictive in services.
However, as south-south trade increases, this protection not only undermines
poor trading partners, but also tends to undercut their own productivity growth.
Latin American exporters, for example, face average tariffs in Latin America
that are seven times higher than those faced in industrial countries.
"Developing countries clearly have much to gain from their own liberalisation,"
said the Dutch foreign trade minister. She said different levels of development
had led to different needs for countries.
This also applied to what was the Group of 20 (G-20) - now comprising 30
developing countries - that has grown since the WTO ministerial session began
Sep. 10.
The group represents a cross-section of the WTO membership and comprises
a considerable share of world agricultural population, production and trade.
More than 51 percent of the world population and 63 percent of all farmers live
in the group of countries comprising among others, India, China, Brazil,
Argentina and South Africa.
The group accounts for more than 20 percent of world agricultural production,
26 percent of total agricultural exports and 17 percent of all world imports of
agricultural products.
The emergence of the group has not eased the process of negotiation.
"Different members of the group have different priorities," Van Gennip said,
adding that this was the impression she had gained from talks held between
what was initially G-20 and European Union Trade Commissioner Pascal Lamy.
By Friday, other developing countries had entered into an alliance comprising
the African, Caribbean and Pacific group of states (ACP), the African Union and
the Least Developed Countries (LDCs).
The Alliance includes 92 countries, 61 of which are members of the WTO, that
has 146 members in all.
"The challenges facing the poor countries and the risk that their economic and
social situation may be worsened because of heightened disequilibrium,
require the WTO to take necessary measures to promote the harmonious
integration of those countries in world trade," the three organisations said in a
joint statement Saturday.
The Dutch foreign trade minister said the Netherlands in particular and the EU
in general were aware of the problems faced by the developing countries. With
this in view, the Netherlands had announced a further grant of some 790,000
dollars for technical assistance under the Doha Trust Fund of the WTO.
The fund is intended to assist developing countries in understanding
complicated WTO regulations and implementing these.
Besides, the Dutch government is an "enthusiastic proponent of international
cooperation," the minister said.
In a policy statement last June, Dutch Prime Minister Jan Peter Balkenende
said: "We view it as a moral duty to contribute to the development of poor
countries. And, because it is in our own interest to increase global stability by
strengthening the international legal order."
He added: "The government will continue to earmark 0.8 percent of GDP
(Gross Domestic Product) for development aid. It will endeavour to create a
level playing field for poor countries, by for example improving access to
markets and dismantling subsidies that distort trade."
Van Gennip said trade is not an objective in itself. Trade needs to play its role
in creating prosperity as a precondition all over the world. To that end, the WTO
is the vehicle and the Doha Development Agenda the map ahead, she said.
(END)
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