World Social Forum - Porto Alegre, Brazil, 25-30 January, 2001


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TRADE: WTO's Moore a Solitary Voice against Regional Integration

By Marcela Valente

BUENOS AIRES, Nov 28 (IPS) - The Director-General of the World Trade Organisation (WTO), Mike Moore, stated Tuesday in the Argentine capital that the consolidation of regional blocs is slowing multilateral trade liberalisation. But he was alone among a panel discussion's participants in defending such a stance.
His discourse was apparently out of tune with Tuesday's forum organised by the Institute for Latin American and Caribbean Integration, which highlighted the integration processes the institution has been backing for the last 35 years, with support from the Inter-American Development Bank (IDB).

None of the other panellists could resist the temptation to momentarily set aside their own speeches to try to convince Moore of the benefits of regional integration, and clarify that it in no way involves a conflict with multilateral trade liberalisation.

But the WTO leader, who is campaigning in Latin America for a new round of global trade talks following the Dec 1999 debacle of the Ministerial Conference in Seattle, pointed to regionalism's inherent risks.

Though he acknowledged the positive performance of some trade blocs, he said such accords reduce incentives to pursue a multilateral approach.

In his presentation, the WTO chief said there is the danger that the blocs would become increasingly ''defensive,'' and warned that ''new walls'' could be erected in terms of trade regulations, tariffs and preferential treatment among a bloc's member states.

Moore said that the progress made by Mercosur (Southern Cone Common Market) has been spectacular, especially because it has increased the economic efficiency of its members, facilitating the developing countries' exploitation of their advantages and their entry into global market competition.

But, the former prime minister of New Zealand added, such regionalism is fragmenting the world's multilateral trade efforts.

Mercosur's full members are Argentina, Brazil, Paraguay and Uruguay, with Chile and Bolivia as associate members. In the last 10 years the bloc's exports have grown from eight to 20 percent of the world's total. The four Mercosur partners together represent nearly 80 percent of South America's combined gross domestic product (GDP).

Moore says that Mercosur, potentially adding Bolivia and Chile as full members and admitting more countries, would be a worrisome strategy if it is proposed only as a counter-weight to the North American Free Trade Association (NAFTA), made up of Canada, Mexico and the United States.

Regionalism can be a powerful force, but it cannot substitute multilateralism, said the WTO official, and wondered aloud if it would be possible as a bloc to obtain an advantage in issues such as the persistence of agricultural subsidies or the differences of opinion between the United States and China.

Moore said that the Asia-Pacific Economic Cooperation Forum (APEC) had also facilitated trade, was at the cutting edge of electronic trade liberalisation, and resisted the 1997 financial crisis - all without giving up on pursuing market opening.

Norberto Iannelli, undersecretary for Economic Integration of the Americas and Mercosur at the Argentine Foreign Ministry, acknowledged that multilateralism ''was and is'' an asset for the developing world and that its benefits are persuasive.

He stressed, however, that regionalism has always been a seed within the global system.

Iannelli explained that the eruption of new trade blocs in recent years is in response to the existence of a ''new regionalism'' that does not contradict multilateralism.

IDB president Enrique Iglesias made the same clarification Monday at the opening of the forum.

Iglesias emphasised that today there is almost no country among the WTO's 140 member nations that has not signed at least one regional trade agreement, and said he considered this a ''new regionalism,'' based on a series of neo-liberal reforms that make countries more open to trade and more competitive.

Iannelli went even further, telling Moore ''there is no strong leadership for advancing the new round of multilateral negotiations'' the WTO leader has called for, and this has justified the deepening of regional integration processes as a fundamental tool for development.

He was even more critical when he pointed out that in 40 years developing countries have not been able to achieve that their agricultural products enjoy the same trade benefits as industrial products, and that this goal - which the WTO has claimed as its own - has continued to be frustrated in recent years.

''The open regionalism we have in Latin America and the Caribbean has been a positive process for us, one that has not meant obstacles for multilateralism, and there are even possibilities for a very active complementarity between the two,'' Iannelli underscored before beginning his own formal presentation on the panel.

José Campos, executive secretary of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), supported Iannelli, saying he believed regionalism and multilateralism ''not only share the potential for peaceful coexistence, but also for a mutually beneficial relationship.''

Regional blocs build areas that are economically based, but that have political, social and cultural objectives for the long term, which contribute to progress in multilateral negotiations, explained Campos.

Moore said it was paradoxical that in the 1990s when the Uruguay Round of multilateral trade talks concluded with the institutionalisation of the WTO, it triggered an explosion of regional accords, each one with its regulations superimposed upon others.

It is these blocs, Moore maintained, that obstruct worldwide free trade.

The WTO Director-General argues it is indeed possible to convene a new round of international trade talks, despite the failure of the Ministerial Conference in Seattle.

During his visit to Chile on Monday, Moore encouraged that country to take the lead in pursuing a new round of trade talks, presenting itself as a model of market opening and liberalisation.

Tuesday, in Buenos Aires, he said that in the 1990s the United States had feared the Uruguay Round would fail and had therefore embraced diverse regional integration projects, but that such a strategy no longer makes sense because the WTO now exists and is pushing for new trade negotiations.

The regional blocs can become increasingly defensive, and that presents a danger for the future. Many countries are trying to reinforce trade preferences and thus create veritable labyrinths of regulations that serve as new obstacles to free trade, he added.

Moore concluded by proposing a round of trade talks that would serve to channel existing regional agreements toward a multilateral process, one that focuses on a final objective of global trade liberalisation. (END/IPS/tra-so/mv/mj/ld/00)



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