WTO Ministerial Section • Volume 5 • Number 31 • 18th September 2001

EC Shows Improved Understanding Of Asian Developing Countries’ Concerns

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At an 11 September meeting in Hanoi, Vietnam, trade ministers from 10 Asian countries and their EU counterparts agreed to promote the launching of a new round of free trade talks at the forthcoming WTO Ministerial to be held in Qatar. But most developing country delegations expressed concerns — and Malaysia even doubts — over whether a new round should take place this year.In the meeting between the two trade blocs following the mini-summit in Mexico earlier this month (see BRIDGES Weekly, 11 September 2001), all participants of the third Asia Europe Meeting of Economic Ministers (ASEM EMM3) "expressed their political will and flexibility in building support for launching a round at the Fourth WTO Ministerial Conference in Doha" and said that new trade negotiations should be held "at the earliest possible opportunity to promote growth."

But ambiguities still persist over the timing and scope of a new round. Some Members, such as the EC and Japan, are pushing for a wider undertaking that would include a range of issue-areas such as investment, competition and environment, while others, such as India, Malaysia and Pakistan, are more reticent about a broader agenda.

EC Trade Commissioner Pascal Lamy, who is spearheading the Union’s campaign for launching a comprehensive trade round in Doha, admitted during a news conference following the ASEM talks that the two sides did not manage to clear all their differences.

"There are still dissenting voices but that is to be expected at this stage in the process," Lamy stated. There remain only eight weeks to "bridge the difference between what is necessary — the launch of a new round — and what is sufficient to launch it," he added.

Developing countries still sceptical

Some countries, however, doubted that all concerns could be settled before Doha. Referring to the so-called ‘new issues’ such as investment and competition policy, the environment, and labour standards, Malaysian International Trade Minister Rafidah Aziz commented that the Europeans had been trying to incorporate too many "political" issues in the WTO rules that "many people still don’t understand". Concluding that they needed time to understand, she said, "when we are ready, maybe in two to three years down the line, then that can be [brought] on board".

Philippine Trade Secretary Manuel Roxas II Monday expressed his and other Asian delegates’ concern that some of the proposed amendments of WTO rules could be counterproductive for developing countries’ interests. "We don’t want to be in a position where the rules keep us poor," Monday said.

Thai Commerce Minister Adisai Bodharamik stated that Bangkok favoured a limited round, as having a comprehensive agenda would be "too difficult." Bodharamik also indicated that Asian countries had particular difficulties with the EC’s position regarding anti-dumping rules and the integration of labour regulations.

EC showing more flexibility

However, the Thai Minister pointed out that Asian countries had been impressed by the greater degree of flexibility shown by the Europeans regarding the problems developing countries have in complying with WTO rules in the short run. But "we have to go into details," he added. This view was confirmed by Lamy, who stated that the EC’s position had "evolved considerably" since the 1999 Ministerial held in Seattle. For example, an EC source says that it is now likely that WTO Members will request the International Labour Organisation (ILO) to assess labour standards and to keep the issue off the Doha agenda.

ASEM participants were also concerned about the recent slowing down of the world economy, which many regard as an indicator of a global recession. They noted that the "Asian ASEM partners would be affected by the global slowdown, especially in the export of manufactured and agricultural products."

The countries represented at the ASEM EMM3 were the 15 EC Member States and ten Asian countries: Japan, China, South Korea, Vietnam, Thailand, Indonesia, the Philippines, Malaysia, Singapore, and Brunei.

"Asia, Europe Ministers Affirm Need For New Trade Round," KYODO NEWS, 11 September 2001; "EU, Asia Strike Compromise Over New World Trade Talks," AGENCE FRANCE-PRESSE, 11 September 2001; "EU, Asians Look To Trade Round, Malaysia Doubts," REUTERS, 11 September 2001; DJ Wrap: EU, Asia Agree New WTO Talks Needed; Divisions Remain," DOW JONES NEWSWIRES, 11 September 2001; "EU, Asian Ministers Meet For Crunch Talks To Salvage World Trade Deal," AGENCE FRANCE-PRESSE, 11 September 2001. ICTSD Internal Files.