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Discourse: EU pushes for trade facilitations
Karel De Gucht: (Bloomberg)Trade ministers from 159 countries are expected to agree on a number of issues, including trade facilitation, during the ninth World Trade Organization (WTO) Ministerial Meeting in Nusa Dua, Bali, before the final day on Friday
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Karel De Gucht: (Bloomberg) (Bloomberg)
Karel De Gucht: (Bloomberg)
Trade ministers from 159 countries are expected to agree on a number of issues, including trade facilitation, during the ninth World Trade Organization (WTO) Ministerial Meeting in Nusa Dua, Bali, before the final day on Friday. A failure to agree on a package of deals, including on trade facilitation, may hurt developed nations who trade with developing and least-developed countries (LDCs). Below are excerpts of an interview on Tuesday by The Jakarta Post's Mustaqim Adamrah with European Union (EU) Trade Commissioner Karel De Gucht.
Question: The ministerial conference is aiming to endorse a balanced package to bridge the different interests of developed, developing and least-developed countries. How do you assess the possibility of success at this meeting?
Answer: To my mind, it would not take much for us to reconcile the interests of developed and developing countries because they get trade facilitation ' this is something that is beneficial to us developed countries, even more to developing countries and most of all to the least-developed countries.
It's like trying to open the gate so they can more easily export and import goods.
What is your key message to emerging economies in regard to negotiations on the expected deal?
All the emerging economies I believe have lots of interest in this deal because what distinguishes these emerging countries, a number of developing countries and LDCs is that emerging economies are growing on the basis of exports. They're not growing on local consumption. And for that [reason], trade facilitation is of the utmost importance.
Now you know that there's a problem in food security and that has a lot of relevance for one specific emerging economy, India, because they have established a large stockpiling program. They buy rice and wheat from farmers to redistribute it among the poor in India.
They have to find a solution because [otherwise] it could sooner or later cause problems within the WTO and no longer be compatible. But that's a little bit different from the overall perspective of emerging economies, which is, I believe, in favor of the mutual benefits.
What kind of assistance will the EU offer to developing countries to help them fulfill their commitment to trade facilitation if the deal is agreed?
The EU will be at the forefront as we presently are, by the way. We are already the biggest donor respect to aid for trade and trade facilitation. We're going to continue this and we have earmarked ¤400 million [US$543 million] for that purpose, for five years. And the overall needs are estimated not to exceed ¤1 billion.
An agreement on packages at this Bali meeting would be expected to restore public confidence in the WTO and its negotiating function and confidence in the multilateral system. What will happen if this meeting fails?
First of all, it's not a small step because the value for the world economy of this trade facilitation is estimated at about ¤1 trillion.
It's big and serious for the Doha Agenda and it perfectly fits within the Doha Agenda. It benefits everybody including developing and LDCs.
We will do anything possible to reach the deal.
So, how can we find a solution ['¦] to the food security problems? It has to get resolved. But everybody realizes that if you don't get an agreement, that would be very bad. And I believe it would be worse for the major economies, because it could result in the WTO being sidelined.
If the WTO cannot make deals, cannot broker arrangements, eventually, and maybe sooner rather than later, this will have a devastating effect on the dispute-settlement mechanism within the WTO.
We should all realize that this dispute-settlement mechanism in all earnest is probably of the utmost importance for the developing, developed, mature economies and even more for all of us.
We have every interest in being repositioned so that we can make sure that the existing rules are observed, be they in the frontline or the interested parties.
Everybody should realize that the idea, [...] is alive and kicking and it's going to eternally survive ' that is not true if we limit the WTO to the dispute-settlement mechanism; this will erode and very quickly erode the WTO and the dispute-settlement mechanism as well.
Analysts say there is already an increasing trend that developed nations will seek alternative ways to the WTO in engaging developing countries. What's your response to that?
We're also engaging in a number of bilateral deals.
What we discuss with the United States, for example, the TTIP [Trans-Atlantic Trade and Investment Partnership], everything is in it ' WTO+, Doha+.
There are lots of norms, standards and regulations ' something that you cannot do within the WTO at this moment in time.
I would even say that by making those kind of agreements, you lift the floor of the multilateral system so that there is more air. So we're certainly not undermining the WTO.
What I can see is that presently a number of free trade agreements [FTAs] that have been concluded in the end are very hollow, limited to goods, being at the limit of what is understood by essentially all trade.
That's in the WTO ' that you should cover essentially all trade ' but clearly it doesn't cover all trade. And we already have said a couple of times that in fact the WTO should monitor those free trade agreements as to whether they are compatible with the WTO or not.
I have my doubts on a number of these hollow FTAs, whether they are in line with WTO rules. But that doesn't concern us because we only make very ambitious deals. That's why, for example, it's not so easy for us to make agreements with a certain number of countries.
It's because they would like to have a level of ambition that's considerably lower than we are at. We are not doing that, we are not prepared to make hollow deals, we are not interested in that.
In the TTIP, there are lots of topics that cannot be dealt with in the WTO, for example regulatory proximation.
If I add that on to the TTIP ['¦] the benefit is for the third party. By integrating two markets, what you actually also do is create one market for others. They have only to approach one market, which is an advantage to them as well.
