5 Dec 2013

Pacific will struggle to meet WTO trade requirements

6:06 pm on 5 December 2013

The non-government group, the Pacific Network Against Globalisation, or PANG, is asking how developing countries can cope with World Trade Organisation's trade facilitation agreement.

The agreement is one of the issues on the table at the WTO ministerial meeting now underway in Bali in Indonesia.

Another is the Least Developed Countries package which promises improved access for exports from the LDC nations, of which there are several in the Pacific.

PANG spokesperson, Adam Wolfenden, told Don Wiseman that the trade facilitation deal's aim of removing of the red tape at borders is generally not an issue for the developing states.

But he says the issue how can they afford to revamp their customs systems.

ADAM WOLFENDEN: The trade facilitation would be a binding agreement and it would be subject to any dispute settlements so they could actually go to the WTO court if they weren't actually complying with the agreement.

DON WISEMAN: In the past there has been discussion or a tentative agreement that the developed countries would help with this process in terms of really making that whole process easier for the developing countries. But that's no longer the case?

AW: The trade facilitaton is broken into two parts - one dealing with what countries will comply with, and the other dealing with how to help developing and less developed countries comply with that agreement. And for a long time the LDC and developing countries have stated that they actually will need financial assistance to be able to comply with these commitments. And that seems like that's actually off the table. The rich countries have managed to get the word 'financial' in terms of assistance taken out of the package and reduced only to a footnote. Organisations like PANG, we have a major concern with that. There's a lot of small island countries that if they agree to a trade facilitation agreement are going to have to find the money, take it from what is otherwise a very small budget to comply with that agreement, which will likely result in increased imports to the country, not necessarily increased exports from those Pacific countries to other markets.

DW: It's something that would be compulsory for a member of the WTO, so this is just going to be forced on these developing countries to somehow remove this red tape, but with no assistance.

AW: There will be some assistance. The issue that we have is that while the Pacific countries are finding legal commitments in what they have to commit to, all the rich developed countries are only taking best endeavour. They're not making binding commitments in terms of the assistance they'll give. It's a very unbalanced, unfair package in that sense. In terms of the least developed countries package, and this has been around for some time, is this something that's beneficial for the least developed countries, a number of which are in the Pacific?

DW: There is some benefit there, definitely for the least developed countries. But the issue becomes the LDC package is something that's been agreed to for a long time, yet what we're seeing is it's being used as leverage on the least developed countries to get them to pressure other countries in other aspects of the negotiation. So it's very much being said that an agreement on agriculture, trade facilitation and the LDC package, it's all one bundle. So the least developed countries are put in a very hard position here where in order to get what will help a lot of those they have to play a part in this political game of pressuring other countries to concede what they definitely need, like India with its food security programme and those negotiations. So what we're seeing here is very typical power politics of the World Trade Organisation.