The heavy price of WTO membership

The heavy price of WTO membership
By Alan Boyd

SYDNEY - Cambodia and Nepal have become uncomfortable symbols of the failure of international trade negotiations after their acceptance as the newest and poorest members of the World Trade Organization (WTO).

They don't really want to be there, and can barely afford to meet their membership commitments. But being marginalized would entail an even greater sacrifice," maintained Cambodian Commerce Minister Cham Prasidh. "For the sake of national reconciliation and peace in Cambodia, we paid heavy prices and now, for the sake of world integration, we had to pay another before we could join the WTO." But, he added: "If we are kept outside, we are likely to suffer."

The immediate price being paid is a package of tariff concessions and liberalization obligations so binding that they threaten to stifle the same development strategies that were designed to benefit from membership of the elite trading family...."

"...Yet when it came to the litmus test of negotiations for the Cambodian and Nepalese memberships, Doha failed miserably, offering a raw deal on market access, the protection of agricultural goods and adherence to patent rules.

Nepal, 40 percent of whose 23 million population live below the poverty line and with a per capita annual income of only US$240, had to agree to sweeping cuts in import duties that will add only 10-20 percent to the cost of most incoming goods.

Industrial products, predominantly carpets, textiles and garments that are manufactured in back-street shophouses and small cooperatives, will attract a modest tariff of about 24 percent, while the levy on agricultural imports will be 42 percent.

Cambodia is already obligated through its membership of the ASEAN Free Trade Area (AFTA) to remove most import tariffs by 2015, but will have to implement much of this package earlier to meet the WTO requirements. It will be unable to levy duty on agricultural goods, the main income source for 80 percent of the population, above 60 percent. In contrast, European Union farm tariffs range up to 252 percent, the US levies a maximum of 121 percent and Canada 120 percent...."

"...The scandal is that the powerful members of WTO have asked more concessions from Cambodia than they have asked from themselves," charged Phil Bloomer of the British-based charitable group Oxfam, which released a scathing report on the negotiations.

So how did Doha's focus on the poor go so badly awry?

Diplomats discount talk of a conspiracy by rich nations and point instead at the WTO's flawed vetting framework, which in effect leaves applicants at the mercy of their peers, and these countries' vested trade interests. A seat is not offered until an applicant has satisfied the demands of every existing member, and especially the grouping's power brokers, a practice that encourages backroom deals on market access in return for votes...."

http://www.atimes.com/atimes/Southeast_Asia/EI30Ae02.html