allAfrica.com: Kenya: WTO Faults Trade Blocs

allAfrica.com: Kenya: WTO Faults Trade Blocs

WTO Faults Trade Blocs

The Nation (Nairobi)
NEWS
May 3, 2005
Posted to the web May 3, 2005

By Muna Wahome
Geneva

Poor countries must avoid excess focus on trade blocs if they are to reap benefits of international trade, outgoing World Trade Organisation director-general Supachai Panitchpakdi told journalists here on Wednesday.

Dr Panitchpakdi, whose mandate expires in August ahead of the critical Hong Kong ministerial conference, said the trading blocs were slowing down poor members of the 148-state trade rules formulating body.

There are in excess of 250 bilateral trade and economic blocs in the world, a number of which overlap. Kenya and Uganda for example are members of the East African Community, African Growth and Opportunity Act, Africa Caribbean and Pacific-European Union plurilateral group and the Common Market for Eastern and Southern Africa.

"States should concentrate more effort on multilateralism than on free trade areas (FTA). Some are involved in more than ten negotiations," he said. "If they want real success they should focus their resources."

He noted that while rich countries like the US - responsible for setting up of quite a number - could comfortably afford resources demanded by the sprouting trading blocs, developing and least developed countries can ill afford the arrangements.

The director-general does not think highly of the economic sense of the groupings either. Quoting a World Bank report, he said FTAs were responsible for only 10 per cent reduction in tariffs compared to 30 per cent by the multilateral system. They have nevertheless managed to decelerate the speed of trade progress in the multilateral system by sapping much-needed resources.

He said while nothing in the WTO rules forbid the groupings, members with limited resources have to consider their economic situation. "Counterparts of the rich countries have to weigh their options. That is my warning."

The writers drawn from various global media firms were attending a week-long educational seminar in this central Swiss city jointly sponsored by Friedrich Ebert Stiftung and the WTO. The Daily Nation represented Kenya.

The director-general leaves at a time the WTO is on the verge of taking important steps into he future. First, it is of critical importance that his replacement is found over the next four months - and it is widely believed the man would be former European trade commissioner Pascal Lamy.

The WTO general council, chaired by Ms Amina Mohamed, also Kenya's ambassador to the global body, has the task of getting the right person through consensus.

The WTO is more importantly working under heavy pressure to reach what is known here as the "first approximation", a rough sketch of broad points to form basis for crafting a draft agreement during the ministerial meeting in Hong Kong this December.

Any agreement in China would be used to push into conclusion the difficult Doha Round of talks hopefully next year. Officials here are hoping to conclude well ahead of the lapsing of he US presidential trade mandate in 2007.




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