Business | Opinion
Still miles to go for truly free trade but success is vital
Undoubtedly, multilateral deals are the best, asthey ensure thatall concerned parties play by the same rules.
- By Dr Jasim Ali, Special to Gulf News
- Published: 23:52 September 20, 2008
On 11-12 September, I took part in the parliamentary conference on the World Trade Organisation (WTO) in my capacity as member of finance & economic committee at Bahrain's Council of Representatives. The event meant to generate additional pressures on WTO's leading members to find a successful conclusion of the Doha Round. Additionally, WTO authorities used the gathering to press legislators to ratify the accord to ensure its eventual implementation when reached.
Launched in late 2001, the round remains deadlocked over numerous issues, notably on agriculture. On the one hand, the US and EU are under pressure to limit subsidies to their farmers. On the other, they are pressurising emerging heavyweights, notably India and Brazil, to open up their economies and limit import duties on agriculture products.
Ministers from some 35 countries failed to sort out their differences during nine-day marathon talks in Geneva in July. However, WTO officials, notably Director General Pascal Lamy, remain hopeful of a resolution in 2009.
During one session, I questioned Lamy about the adverse effects of the Doha round. I argued that costs would most likely include mushrooming of bilateral and regional free trade agreements (FTAs) at the expense of multilateral deals.
He responded with some solid arguments. He started by suggesting that similar to multilateral deals, the completion of regional trade agreements could be lengthy as well. Knowing where I come from, he could not find a better example than that of a pending deal between the European Union and the Gulf Co-operation Council. Negotiations between the two regional economic blocs began 20 years ago with no end in sight. In comparison, only seven years have passed since the launching of the Doha round.
To be sure, the European side remains reluctant of signing an accord by coming up with new set of conditions every now and then. The latest demands include environmental protection besides traditional matters of labour rights and democracy. However, it seems that the EU does not want to provide six-nation GCC unrestricted access to a bloc comprising 27 members.
Still, Lamy argued that bilateral free trade agreements tend to be uniquely unfair. Such is the case as the more powerful side places conditions on the weaker. The argument could not be more correct. For instance, the US pressed Bahrain to modify laws regarding protection of intellectual property rights as a precondition for the FTA's implementation in August 2006. Likewise, Oman had no choice but to amend rights of foreign workers for the deal to go into effect in 2007.
Yet, Lamy questioned the viability of a single country or bloc signing agreements with a number of countries. The US has either signed or entered into trade negotiations with some 20 countries. In the case of the US, conclusions of FTAs require contributions and support of numerous parties including organised farmers, civil societies and the Congress. Similarly, FTAs between blocs could prove cumbersome, as demonstrated in the long-awaited deal between the EU and GCC.
Undoubtedly, multilateral deals are the best, as they ensure that all concerned parties play by the same rules. The experience of the past few months has shown that instability in the agriculture sector could be dangerous to global stability. Numerous countries witnessed demonstrations in the aftermath of sharp rises in food products. The successful conclusion of Doha round is vital for the sake of global peace and prosperity.
- The writer is a Member of Parliament in Bahrain.
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