TRADE: Arab Nations Debate Strategy for Seattle Conference

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Nov 19 1999 (IPS) - The best strategy for the Arab states at the World Trade Organisation’s (WTO) Third Ministerial Conference will be to sign on to proposals made by the developing countries united in the Group of 77 (G-77), agreed the region’s trade negotiators.

The G-77 maintains that the Ministerial Conference, to be held in the U.S. city of Seattle, Washington November 30 to December 3, must focus on pending issues that were approved by the multilateral talks known as the Uruguay Round, which occurred between 1986 and 1994.

The Arab representatives agreed with the position, warning that without the fair and full application of the multilateral accords, especially the articles that affect market access for developing countries, the WTO’s credibility would be seriously eroded.

The basis for the G-77’s declaration for Seattle, approved in Marrakesh, Morocco in September, is the conviction that liberalisation is a powerful and dynamic force for economic development.

But the declaration also says that trade policies must include a vision of economic development.

In a review of the Arab countries’ position in the global trade scenario, negotiators from the region, invited to Geneva by the United Nations Trade and Development Board (UNCTAD), discovered there have been positive changes.

On the road from Punta del Este, where the Uruguay Round of multilateral trade negotiations began, to Seattle, where the industrialised nations will propose launching a new series of talks known as the “Millennium Round,” new factors have appeared that alter the prior equilibrium.

In the year 2000, this balance will change thanks to the expected incorporation of China into the WTO, predicted Moroccan economist Hassan Abouyoub, former minister of Foreign Commerce and current ambassador to France.

The new ties that will be established within the Asian continent will also change the multilateral system for Europe and the Americas, said Abouyoub, who last year was a candidate for WTO Director-General.

After initiating the round of negotiations in the Uruguayan resort city of Punta del Este, the idea of regional integration evolved, and is now much more respected, observed Abouyoub in discussions with the Arab negotiators.

With the exception of South Korea, Hong Kong and Japan, the other 132 WTO member-countries are all involved in some form of regional agreement committed to eliminating tariff barriers, he pointed out.

The idea of the Arab world’s economic integration is plausible, but a common market is impossible without transparency and democracy in the region, lamented the economist.

Arab participation in international commerce, excluding petroleum and raw materials, has not improved as expected after the 1994 Marrakesh conference that concluded the Uruguay Round and the era of the General Agreement on Tariffs and Trade (GATT), which gave rise to the WTO.

Abouyoub affirmed that, in this area, the Arab states lag behind Africa. They have very high tariffs – 16 to 17 percent – if the Gulf states are included, which reduce the average with their relatively low tariffs.

In comparison, India has a tariff of 18 percent, Brazil – nine, the European Union – three, the United States – 1.5, and Japan 1.2 percent.

Another factor that explains the Arab economic situation is that the region’s group of negotiators in Geneva has not changed in quantity or quality, criticised Abouyoub.

The level of Arab representation is practically the same as it was in the Gatt era (1947-1994), even though negotiations and issues are currently much more complex.

International trade issues have been marginalised in the Arab world, maintained Abouyoub, because political instability in the region has resulted in finances being prioritised over questions of commerce and competition.

The combination of these factors has meant that Arab nations have been excluded from international trade, he added.

But from the Arab point of view, aligning with developing countries at the Seattle conference will prove beneficial, stated Abouyoub.

The current level of the G-77’s participation in determining trade policy is unprecedented, creating a new variable for comparing the Punta del Este experience with Seattle.

If the G-77 maintains cohesion and respects the September agreements of Marrakesh, “it could play a pioneering role” in the ministerial conference, affirmed Abouyoub, adding that the Group has adopted “moderate and pragmatic” positions.

The key to decisions adopted in Seattle lies in the United States- European Union equation, said the Moroccan negotiator. But even with such a situation, the G-77 can have a major impact, he said.

The Arab negotiators agreed that the document approved by the G- 77 in Marrakesh is a valuable tool for the Seattle debates. The Arabs favour liberalised agricultural trade so the sector’s products can be regulated by the WTO just like other goods.

But they demand that the region’s food needs be met, though without allowing industrialised nations to use the channel for justifying massive subsidies for agricultural exports.

Regarding the service sector, the Arab representatives propose reallocating commitments to favour developing countries. They also demand greater liberalisation of the sectors of interest to these countries, especially freedom of movement for the workforce, with an emphasis on professional services.

The Arab negotiators expressed concern about the obstacles and strict requirements that impede the region’s nations from joining the WTO. Of the 19 Arab states, eight are involved in talks for admission, three have observer status, and the remaining eight are full members.

Some diplomats suggested using political pressures to unblock the WTO’s working group discussions about admission requirements for new members.

The Moroccan delegate in Geneva, Nacer Benjelloun-Touimi, recommended appealing directly to the United States government, “where policy issues of major commercial importance are decided.”

The Washington delegates to the WTO come from the U.S. Trade Representative’s Office, the equivalent of a foreign commerce ministry.

The Office does not understand politics, affirmed Benjelloun- Touimi, explaining that its delegates are entrepreneurs or business leaders who negotiate issues related to their interests.