The WTO game is on, but who is playing?

Muhammad Ikhwan, Jakarta | Sun, 01/16/2011 11:33 AM A | A | A |-Klipping the Jakarta Post

It’s on again.The latest political signals from the recent G20 Summit in Seoul and the APEC Summit in Tokyo implied a need to complete World Trade Organization (WTO) talks in 2011. This will translate into bustling work for director general Pascal Lamy to launch intensive negotiations in the beginning of 2011.

A revised on text of modalities — covering general agriculture, industry and services — is expected to emerge at the end of first quarter of 2011. This has raised questions on what happened to the earlier text agreed upon in December 2008.

A critical window of opportunity, albeit narrow, is closing, leaving one last opportunity to finish the endgame of the almost-10-year-long Doha Development Agenda (DDA).

If we look closely, Lamy has been quite swift in maneuvering. He pulled the strings of the G20 and the APEC countries — and then hoped to convert their political will into a real WTO deal. Nonetheless, in this play Lamy still does not have the ball. The member countries do — and we still need to calculate who will take the ball and run with it.

The most suspicious player is the US. People may already aware that the Barack Obama administration is now focused on “export promotion” as a job creation strategy. Obama might be trying to jumpstart DDA as a way to get more appreciation from the business community.

As we witnessed during Obama’s recent Asian journey, he was a powerful salesman for opening emerging economic markets such as India and Indonesia while he bolstered economic ties between the already established ones such as Japan and South Korea.

Yes, playing defensively can be no longer a strategy for the US in global trade. In fact, the US has been reportedly been gung-ho for the business, at least in regional and bilateral level.

For instance Indonesia and India have signed a bilateral strategic partnership agreement, which is another step towards a Free Trade Agreement (FTA). South Korea has been in on-and-off negotiations with the US for a bilateral FTA since 2006.

Last but not least, the US reportedly has been arranging a Trans-Pacific Partnership (TPP) to expand a free trade initiative to APEC countries — an agreement that could be worth 90 percent of the world’s economy.

India and Brazil, representing the G20, were keen to get the ball some years ago. Right now, they are not that interested anymore in the endgame of the WTO. Bear in mind that the latter country has just inaugurated a new administration. However, the only thing that keeps agreements from being signed for this group of emerging economies is the opening of the developed countries’ markets. They want more market access, for sure.

As for China, it seems that it does not even need the WTO to help its skyrocketing economy.

On the rough side of the pitch, we see the players from the group of Least Developed Countries (LDCs) and Small and Vulnerable Economies (SVEs).

Zambia said it welcomed the political signals and believed they would provide a clear political message to move the negotiation process forward. Nonetheless, Zambia highlighted that in doing so, the development dimension of the DDA should not be lost.

Meanwhile, Barbados emphasized how agriculture remained the driver of negotiations — and the importance of a more transparent and inclusive process.

These two groups have usually been marginalized — left out of the small group process or the Green Room. If this really a game, they have never had the ball.

On agriculture, we should set our focus on the G33. Their proposed Special Products and Special Safeguard Mechanism (SP/SSM) has been considered as a potential deal breaker for the WTO talks.

The proposal is important for protecting developing countries in the free trade world. In this dimension, a strong SSM means a strong bargaining position for developing countries as well.

They surely can kick the ball, but as history has shown Indonesia and Philippines are not as tough in negotiations as countries such as India and Brazil.

If the WTO is a real team and Lamy a real manager, then key players such as the US, the European Union, and some countries in the G20 and the G33 will be crucial in negotiations. There is a long history of imbalance in the institution; many players on the pitch have often been left behind, or have not gotten the ball at all.

The season is still long enough that they will have to face many global trade obstacles ahead. This unbalanced team will have difficulties in surviving, and even more difficulties in solving problems. As some ambassadors from the LDCs and SVEs said: “Doha supposed to be a development agenda.”
That’s true. No country should be left behind.


The writer is head of the Indonesian Farmers Union’s (SPI) International Relations Department. The opinion expressed in this article is his own.