Poorer countries will find it hard to gain access to bilateral trade agreements unless the WTO helps them do so. Credit: Amantha Perera/IPS

By Amantha Perera
TOKYO, Nov 29 2013 (IPS)

For years, it was the power chamber at the headquarters of the World Trade Organisation (WTO) in Geneva – the Director General’s Conference Room, more popularly known as the Green Room, where a handful of delegates would gather for important discussions and meetings.

The traditional power quad – the U.S., EU, Japan and Canada – would gather in the Green Room to “decide on global trade deals,” according to Masahiro Kawai, the head of the Tokyo-based Asian Development Bank Institute (ADBI), a think tank. That, however, was in the past.

“They sat in the Green Room and came up with agreements, but not any more,” Kawai said.

The erosion of power within the Green Room discussions, and more specifically that held by rich nations like the U.S. or Japan, is primarily linked to the rise of emerging nations such as India and China, and of newer, leaner and meaner trade groups like BRICS (Brazil, Russia, India, China and South Africa), as well as the change in traditional global supply chains.

A quarter of a century ago the share of global GDP held by emerging and developing economies was below 20 percent, according to World Bank and International Monetary Fund statistics.

As of 2012, they had almost caught up with the G7 powerful industrialised nations (Canada, France, Germany, Italy, Japan, UK and U.S.). The G7 share was around 48 percent while the emerging nations’ share was just below 40 percent.

They have already overtaken the G7 as the largest trading bloc in the world, accounting for just over 40 percent of all global trade. The G7 share of global trade has fallen from a peak of above 50 percent in the first half of the 1990s to around 35 percent.

“No wonder the voices of the emerging and developing nations have risen at the WTO,” Kawai said.

Another reason for the erosion of power held by the G7 is the change in global supply chains. Whereas decades back global trade would be dominated by end-products, now it is predominantly a market for intermediary products.

“Today, nearly 60 percent of the world merchandise trade is trade in intermediary products,” Kawai said.

When he researched the supply chain of the iPhone, ADBI Director of Capacity Building and Training Yuquing Xing came up with a starling statistic. Of a production cost of 178.96 dollars (2010 values), China’s manufacturing cost was a mere 6.50 dollars. The remaining costs came from over a dozen companies in five countries. The most expensive component, according to Xing’s research, was the flash memory, at 24 dollars, which came from Toshiba Co in Japan.

This new trading pattern allows China to export over 11 million iPhones a year to the U.S., the country where it was developed and where the company that markets the product is located, Xing said.

But this reinvention of global trade negotiations does not bode all that well for poorer nations and lower-middle-income nations, according to ADBI experts and others. Why? Because the emerging nations and G7 members are now eagerly negotiating and entering into regional and bilateral free trade agreements, mostly with equally powerful trading partners.

According to ADBI, there are 379 such trade agreements in force globally, with more being negotiated. There are ongoing discussions for the Trans-Pacific Partnership, which would bring together 10 countries on either side of the Pacific: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam.

Equally closely watched are the discussions on the jumbo Association of Southeast Asian Nations (ASEAN) Plus Three partnership that would bring together the ASEAN nations and Japan, South Korea and China.

“The non-tariff trading regimes are the current weapons of choice,” said Rodolfo Certeza Severino, the former secretary general of ASEAN between 1998 and 2002 and currently the head of the ASEAN Studies Centre at the Institute of Southeast Asian Studies in Singapore.

What these jumbo and super powerful trading agreements do is leave middle-income and poorer countries in an unenviable position of being left on the sidelines, unable to get in.

For example, none of the eight countries in the South Asian Association for Regional Cooperation (SAARC), a political association, feature among India’s fifteen largest trading partners.

India’s largest South Asian trading partner is Sri Lanka, with which it did four billion dollars worth of trade last year. But here too the trade has been lopsided, with Indian exports amounting to over 3.4 billion dollars in 2012.

“These free trade agreements are setting the new realities,” Kawai said.

These new realities dictate that while the richer nations negotiate, argue and cajole for more preferential trade, the world’s poor are being left further adrift.

A recent report by the U.N. Conference on Trade and Development said that the 49 least developed nations recorded job growth of just over two percent in the last few decades, barely above population growth levels.

ADBI’s Kawai however sees a role for the WTO to break the trading cycle that favours the rich. The organisation should act as a catalyst for trade negotiations and as an effective arbitrator of disputes, he said. More multilateral and regional trade agreements should be promoted, with the WTO playing a critical central role, he added.

“A revamped WTO process could achieve global trade and investment liberalisation through consolidation of regional agreements, creation of cross-regional agreements, and harmonisation of rules across agreements,” he said.

Former ASEAN Secretary General Severino agreed. “In fact most of the provisions in these [free trade] agreements have to be WTO-consistent,” he said.

But with the WTO hobbled, still unable to conclude the Doha round of negotiations that started in 2001, the chances of it playing a decisive role in trade negotiations remain low, at least in the short term, both experts agreed.

Heavy monsoon clouds advance on Sri Lanka's southern coast near Hikkaduwa town. Credit: Amantha Perera/IPS

By Amantha Perera
COLOMBO, Aug 20 2013 (IPS)

Gulam Rasul, chief meteorologist at the Pakistan Meteorological Department, was sure early this month that the second leg of the annual monsoon due in the latter half of the month was going to be bad. “Normally it peaks towards late August,” Rasul told IPS.

Even before peaking, the 2013 monsoon has been deadly. By mid-August, floods in Pakistan had killed more than 80 and left over 80,000 stranded, according to the Pakistan Disaster Management Agency.

Rasul says South Asian countries need to treat the monsoon with more respect than they do.

“It is vital for the region, probably the most vital annual weather event, and we need to be better prepared. It is at our risk that we take it lightly,” Rasul said from his office in Islamabad.

The monsoon has been erratic in recent years. Last year the monsoon failed in Sri Lanka, and parts of the country’s northern, eastern and southern regions went through a drought that affected at least 1.2 million people.

This year the monsoon has been above average. Rains have been lashing the country since June, and have so far caused 58 deaths and stranded over 17,000.

“We need to have a better understanding how the monsoon is changing and be better prepared,” S. H. Kariyawasam, head of the Meteorological Department in Sri Lanka said, agreeing with Rasul.

One of the effective means of achieving this is real-time sharing of weather information among countries in the region, experts say.

Rasul sees a simple need to share information. “If countries at the beginning of the monsoon keep sending updates, then countries at the toe end like Pakistan could prepare better.”

If such a scheme had been in place, it would have proved life-saving, according to Mandira Singh Shrestha, programme coordinator and senior water resources specialist at the International Centre for Integrated Mountain Development (ICIMOD) in Kathmandu, Nepal.

She told IPS that as the monsoon moved north from Sri Lanka into north India, information-sharing could have alerted national and regional weather authorities in India to take precautionary measures.

The fast-moving monsoon this year, assessed by some as the fastest in over four decades, ripped into Uttarakhand region in North India by the second week of June without any warning of its deadly potential.

By the time it left, more than 1,000 bodies had been recovered. Over 6,000 people are still listed as missing. The Uttarakhand region has been left in tatters. The region was full of pilgrims who had arrived just before the traditional rainy season when the monsoon burst above their heads. No one told them the rains were moving faster than usual.

“There is a need for coordination between the hydrological and meteorological agencies for providing timely and reliable forecasts,” Shrestha said.

At a meeting attended by regional and national experts organised by the Planning Commission of India on Aug. 13 to assess the aftermath of the Uttarakhand floods, the focus was at last on sharing information, and weather updates.

Experts at the meeting said that the trans-boundary nature of disasters made data-sharing essential.

Since 2005, officials from South Asian countries have been meeting just before the monsoon through the South Asia Climate Outlook Forum set up with the assistance of the World Metrological Organisation. This year’s meeting was held in Kathmandu, Nepal in mid-April.

The final update from the meeting was that the monsoon would be “within the normal range with a slight tendency towards the higher side of the normal range.”

When it arrived a month and a half after the meeting, the monsoon was moving faster than anticipated and was more potent than expected.

Such changes, according to Kariyawasam, are becoming a part of the increasingly erratic monsoon, whose pattern is proving hard to predict.

At the April meeting participants had agreed that detailed information on the monsoon as it moved inland could only be provided by national and regional weather offices. It was not, and it is this kind of update that Rasul and Kariyawasam want shared.

“What we need is a mechanism to do this,” Kariyawasam said. Both Sri Lankan and Pakistani officials say that one of the forums that can be used is the Meteorological Research Centre under the South Asian Association for Regional Cooperation (SAARC) based in Dhaka, Bangladesh.

“The SAARC platform can work better than a totally new one, because there is already a structure of regional cooperation in other areas,” Rasul said.

ICIMOD’s Shrestha told IPS that one of the models that can be adapted is the regional tsunami alert network set up after the deadly December 2004 tsunami.

“A new network of land-based seismic stations, deep water pressure sensors and warning centres have been developed throughout the region to provide early warning to the countries,” she said.

The effectiveness of such information-sharing was clear on Apr. 11, 2012 when an 8.6 magnitude undersea earthquake was reported off the coast of Indonesia. The Sri Lanka Disaster Management Centre (DMC) issued a warning within less than an hour of the earthquake, based on information received from regional networks.

More than 1,500 coastal villages from around the Sri Lankan coast were evacuated rapidly. According to DMC officials more than a million persons were moved to safe areas within hours of the earthquake.

A warning system of compatible levels does not exist when it comes to warnings on the monsoon, or fast-moving weather patterns. DMC officials say they rely on the Meteorological Department, that is currently ill-equipped to track and issue timely warnings on fast-moving weather patterns.

“It is very difficult to track these weather patterns, especially when they are moving fast,” Kariyawasam said. “Given what we are faced with now, a regional network for information-sharing is essential.”