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GUEST COMMENTARY: Vacancy: A Catalyst to Make Global Trade Fair

Posted by kinchendavid on August 10, 2006

By Sir Ronald Sanders


The Commonwealth is a multinational organisation that is little known outside of its 53 member States. Yet, it has the potential to fill a big vacancy in today’s world: the need for a catalyst to restart the suspended global trade negotiations with an emphasis on development.

Negotiations at the World Trade Organisation (WTO) effectively collapsed on July 24, 2006 when six lead countries failed to bridge major differences amongst themselves particularly over agricultural subsidies. The six were: the United States, the European Union (EU), Japan, Brazil, Australia and India.

Although trumpeted as a “development” round since November 2001 when the negotiations began, the talks amounted to nothing more than manoeuvring for national competitive advantage particularly by the US and the EU, although Brazil and India – the two large developing countries in the mix – have not been shy in advancing their own interests, often claiming concessions that should rightly be accorded only to poor developing countries or Small States.

It was not until last November, four years after the negotiations started, that a commitment was given to provide poor countries with duty-free and quota free access for their crucial exports. Of course, this commitment is an empty one at the present time, since, in the absence of a settled agreement, nothing is being implemented.

What the WTO negotiations needs is a wide measure of agreement amongst a large number of countries on a blue print for re-starting the talks and taking them to conclusion. The blue print should arise from a study by trade experts that focuses on opening markets globally while providing for the development needs of poor countries and small states. In particular, the study should examine how developing countries can minimise transaction costs and lessen the impact on their business sectors through the pacing and sequencing of liberalisation.

The study should also take full account of the difficulties that now exist for the US and the EU on agricultural subsidies and propose practical ways of dealing with them.

The Commonwealth is in a unique position to fill the vacancy for a catalyst that could make the WTO negotiations meaningful for all nations, in particular, poor countries and small States.

With 53 countries accounting for 30% of the world’s population and some 20% of its international trade and investment, Commonwealth trade is well over $2 trillion. Commonwealth members include some of the world’s richest nations such as Britain and Canada; some of the poorest such as Bangladesh and Guyana; some of the larger developing countries – India, South Africa and Nigeria among them; some of the South East Asian “tigers” such as Singapore and Malaysia; and many small island states like those in the Caribbean and the Pacific.

Further, the Heads of Government of these countries have long acknowledged that “the Commonwealth can play a dynamic role in promoting trade and investment so as to enhance prosperity, accelerate economic growth and development and advance the eradication of poverty in the twenty-first century”. They said so when they met in the United Kingdom in 1997.

And, when they last convened in Malta in November last year, they pledged their “global influence” to achieve progress in the WTO talks.

Members of the Commonwealth are also members of the EU, the African Caribbean and Pacific Group, the Organisation for Economic Cooperation and Development, the Association of South East Asian Nations, and the Organisation of American States to name a few.

Their influence, if exercised by their member States, is indeed “global”, and consensus by them that is advanced vigorously in the other geographical and political groups to which they belong stands a real chance of getting a positive hearing.

A former Commonwealth Secretary-General, Sir Shridath Ramphal, famously said: “The Commonwealth cannot negotiate for the world, but it can help the world to negotiate”.

What has been missing so far in the WTO negotiations since 2001 is consensus. The talks have been characterised by mistrust and suspicion, aggravated by the way in which they have been conducted with only a small number of powerful countries meeting behind closed doors to hammer out deals in their national interest that they then try to convince others to accept.

If consensus can be achieved by the 53 Commonwealth countries, it would be enormously beneficial to the building of consensus in the WTO.

There are several precedents for the Commonwealth to take action now that global trade talks have stalled at the WTO. When apartheid gripped South Africa and the major nations of the world were divided on how to tackle the issue, the Commonwealth played a major role in uniting the world’s governments behind a strategy that eventually saw apartheid crumble; when debt crippled development in many states throughout the world and crushed millions of people in deep suffering, the Commonwealth helped to devise a global strategy for debt relief.

Further, expert reports commissioned by the Commonwealth on a range of issues including the vulnerability of small states, democracy and development have informed the policies and work of governments as well as international institutions such as the World Bank and the International Monetary Fund.

In this context, an initiative by the Commonwealth to produce a blueprint for moving forward the present stalled international trade negotiations should be welcomed and supported by all, especially the WTO Secretariat.

Such an initiative, however, requires the active participation of trade ministers from countries such as Canada, India, Australia and South Africa. One of these four – or indeed all of them – should take on the mantle of leadership on this issue and give the Commonwealth Secretariat the mandate to organise an expert study followed by a Commonwealth Trade Ministers meeting to develop the required consensus.

The experts to produce the study exist throughout the Commonwealth. From the Caribbean, for instance, the Regional Negotiating Machinery (RNM) can make a meaningful contribution to a blue print for action in which the development dimension is prominent.

And, has occurred with previous studies, there is every reason why the WTO Secretariat, the World Bank and the IMF should provide both financial and human resources to help produce such a study.

A catalyst is required now to help shape a new approach to the suspended WTO negotiations talks. Delivery of a development dividend should be central to their objectives for, as the current Commonwealth Secretary-General, Don McKinnon, has observed: “800 million Commonwealth citizens subsisting on less that $1 each day would countenance nothing less”.

* * *

Sir Ronald Sanders is a business executive and former Caribbean Ambassador to the World Trade Organisation who publishes widely on Small States in the global community.

Responses to: ronaldsanders29@hotmail.com

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