Rich and poor gap to dominate WTO talks

By Alex Frew McMillan CNN Hong Kong

HONG KONG, China (CNN) -- Tension between developing and developed nations will dominate the upcoming World Trade Organization talks.

The WTO's 142 member countries will gather November 9 in Doha, Qatar, for four days of talks. It is something of a foregone conclusion they will get a fresh round of free-trade talks off the ground.

But the next head of the WTO says it is crucial Doha addresses the problems facing developing nations. They make up two-thirds of the members, and include 40 WTO countries classified poor.

"This time in Doha, it's not only a matter of launching a round but of making a global trade round work for all countries," Supachai Panitchpakdi told the Global Economic Forum's East Asia Economic Summit here Wednesday.

Ex-Thai minister taking over at key time

The former Thai commerce minister will replace Mike Moore as director general of the WTO next year. Supachai noted that his role is now to make friends, not enemies.

But he will take the helm at an interesting time, when tensions between the developed and developing countries are again surfacing.

After a 2000 that saw trade grow more than 12 percent worldwide, the global economy will be lucky to post two percent trade growth in 2001.

Protectionism often proves strongest when economic times get tough, Supachai noted. Countries such as Malaysia have been backtracking on earlier agreements to lower tariffs.

Developed countries push case

But developed countries are also pushing their own kind of protectionism, developing nations say.

The developed economies are keen to push antidumping laws, and Asian countries - often developing -- make up most of the top 10 suspects.

Dumping involves unfairly selling products below cost overseas. Those accused of dumping often say they just make products cheaper and see the accusation as attempts to limit market access.

Environmental laws, labor laws and the like can also be used to push the protectionist interests of developed countries.

"The agenda from developing countries will have to be a priority," Supachai said. And the agenda must have content, not just semantics, he said.

Agriculture always a sticking point

That will likely mean pushing greater access for agricultural products, and for labor-intensive products and products like textiles.

Countries in European countries and Japan, faced with politically powerful farm lobbies, often resist open agricultural trade and are refusing to scrap farm subsidies.

China is also about to join the WTO after a 15-year quest. The WTO has been dominated by the interests of the United States and the European Union. WTO members note that WTO agreements are worthless without the participation of those two biggest markets.

But China's accession will see the balance of power shift toward developing nations. The world's most populous country is also the most attractive market to many businesses.

"When China bangs the table, people will listen," said Chin Leng Lim, a law professor at the National University of Singapore who teaches a course on trade.

Rini Soewandi Indonesia's Minister of Trade and Industry, said she was glad China would be there to push the cause of developing countries.

She noted that the least-developed WTO members make up 20 percent of the world's population. But they only account for 0.3 percent of the world's trade.

"To encourage fair play, the rules of the game have to be fair, and all the members have to be equipped with the same tools," she said. That means the WTO needs to develop training and technical assistance for its poorer members, and combat poverty.

The WTO also needs to tackle the loss of cultural diversity that developing nations fear. The group needs to move forward to promote "the spirit of harmony, not hegemony," she said.

A workable statement

The last WTO session ended in acrimony in Seattle in 1999, with the United States and Europe unable to agree on key issues. Talks aimed at setting up a new free-trade round broke with nothing to show, while police teargassed demonstrators rioting in the street.

This time, members agree on the need to launch a new round of free-trade talks, Supachai and others agreed.

Hong Kong's Commerce Secretary, Chau Tak Hay, told a panel at that the WTO had learned from what he called the WTO's "miserable failure" in Seattle.

The last meeting started with a 36-page draft statement for ministers to sign off on. That was impossible for 142 members to agree to.

This time, the WTO leadership has pulled together a streamlined 10-page ministerial statement. It won't hit every issue but should be something the WTO members can deal with.

"Not everyone is happy with the content," Chau noted. "But somebody has said there is an equality of disappointment."

He said that the September 11 attacks gave a new impetus to getting the globalization process back on track.