TRADE: WTO Strives to Boost Image after Seattle Bust

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Dec 21 1999 (IPS) - The World Trade Organisation (WTO) is zeroing in on Thailand’s success in applying neo-liberal policies as the international organisation attempts to rebuild its image after the serious damage inflicted by the failure of its ministerial conference in Seattle earlier this month.

“It’s true that in Seattle we had a setback,” said the director of the WTO Trade Policy Review Body, Clem Boonekamp, but the example set by Thailand’s response to the international economic crisis is a “a significant achievement for our institution.”

The Trade Policy Review Body declared last week that Thailand responded appropriately to the 1997 world financial crisis when it applied the same neo-liberal policies promoted by the WTO Secretariat.

In the past, the behaviour of countries hit by crisis has normally consisted of closing their markets to foreign trade.

But as a result of the liberalisation model preached by the WTO, Thailand and many other countries responded to the economic downturn with policies of greater openness, affirmed the trade official.

Boonekamp said the fact that nations in crisis turn to the multilateral system reflects an important victory for the WTO.

For this reason, he recommended that some WTO-related events, such as the failure of the Seattle conference in early December, should be evaluated from a broader perspective.

Despite the “setback in Seattle,” comparing the current situation with that of the early 1980s shows that there has been a “quantum change, a sea-change in attitude,” maintained Boonekamp, and Thailand and South Korea’s reaction to the crisis is proof.

The Policy Review Body periodically studies the extent to which WTO member-countries adhere to the multilateral system’s policies, which tend to press developing nations to open their markets to exports coming from the larger trade powers.

The review of the Thai case last week sparked interest because it where the financial crisis erupted in July 1997, spreading later to other countries in the region and throughout the world.

In addition to evaluating Thailand, this session of the Trade Review Body was the first formal meeting held by the WTO since the tumultuous Seattle conference. The controversial meeting ended without producing the results the WTO Secretariat and other trade powers had wanted, namely, the launching of another round of international trade talks.

In the climate of disappointment that has dominated the WTO since Seattle – and reflected in the general council’s decision to postpone its evaluation of the situation until early 2000 – the Trade Review director attempted to lighten the atmosphere by underscoring the success of the Thai experience.

Thailand is just one of many countries that now open their markets in response to crisis and use the multilateral trade system to create the discipline necessary for restructuring their economies, affirmed Boonekamp.

During the Trade Police Review session, member-states agreed that Thailand “is doing very well subsequent to the Asian financial crisis,” because the Thai government responded appropriately by implementing disciplined financial policies.

Immediately following the 1997 financial turmoil, Bangkok’s authorities applied significant structural readjustments, including trade liberalisation in some areas and investment liberalisation, according to the WTO.

Representatives from the other 134 WTO member-countries encouraged Thailand to continue its restructuring process, “which has not yet ended,” affirmed Boonekamp.

Delegates from around the world agreed they are happy with Thailand’s economic performance in liberalising its economy, and urged the Asian nation to continue the reform process, “and not to rest on its laurels.”