Contradictions of Cancun meet

When the WTO's Agreement was signed in Marrakech in 1994, a sense of optimism prevailed towards the liberalisation of trade in goods and services on the global level.

Some nations even felt that it was necessary to put forward the date with respect to liberalising international trade to the year 2000 instead of 2005, as European and north American countries took significant practical steps amongst them resulting in liberalising certain economic sectors such as communications, some service business activities in addition to commodity trading.

During the last eight years, other practical steps were taken for liberalising international trade.

However, several issues began to get complicated with the convention of the recent ministerial meeting in Doha two years ago that launched a new round related to the liberalisation of the service trade sector, which is highly sensitive to the developing countries.

At the same time, new obstacles emerged among the developed nations when the US, which was under pressure from manufacturers, imposed additional tariffs on its steel imports resulting in wide scale protests and counter measures by the European Union that viewed the American action as yet another breach of the WTO's agreements.

Meanwhile, there are sharp differences among the European countries themselves concerning subsidies paid to the farming sector and the same applies to the dispute over the wheat trade between the US and Canada.

As for the developing countries, especially the poor ones, they are struggling to get the bare minimum of staple goods such as foodstuffs and pharmaceutical products at reasonable prices.

The intellectual property rights, which were agreed upon within the WTO framework, have imposed huge restrictions upon the manufacture and trading in medicines in the developing countries, including certain medicines for the treatment of deadly diseases such as Aids and malaria that kill millions of people annually in the poor countries.

Optimistic gesture

In spite of the pressures exercised by US pharmaceutical companies for preventing the developing countries from import and manufacture of alternative medicines, yet the WTO in an optimistic gesture for the Cancun Conference agreed at the end of last week to allow these nations to import alternative medicines for purely humanitarian reasons.

The move came in response to pressures from major developing countries whose communities witness serious health problems and diseases, such as India and Brazil.

Therefore, the forthcoming ministerial meeting expected to be held next week in Cancun, Mexico, will face considerable difficulties in agreeing on new forms of trade co-operation and liberalisation on the global level given that the last round of talks that was held during the earlier ministerial meeting in Doha with respect to liberalising trade in services could not achieve the required results after two years of difficult negotiations amo-ng the various parties.

It is true that the WTO is suffering from acute differences in views and conflicts of interest. It is also true that real progress has been made towards liberalising trade as proved by the major changes to the trade systems even in the strictest countries in terms of economic laws and systems.

Indeed, the next WTO ministerial meeting in Cancun will face many challenges and conflicts between various countries but it will constitute at the same time another shift towards liberalising international trade and will bring the delegates out with new bargaining agreements reflecting the balances of economic powers in the world.

It is noted from the earlier experience, i.e. since the signing of the WTO's Agreement, that there are two trends or positions towards international economic relations.

The first is represented by the developed industrialised countries that presume and act on the basis that the WTO agreements will be applied and international trade will be liberalised sooner if not later. Thus, they take all the necessary steps and measures to consolidate their gains in the immediate future. If this does not happen, they will have nothing to lose except for having developed their economic systems and laws to be more appropriate to the new and changing global conditions.

The writer is a UAE economic expert