China's WTO Updates
War fear, Subsidies May Ruin WTO Talks

The threat of a US-Iraq war and sharp differences over farming subsidies are hampering the World Trade Organization (WTO) talks targeted for completion by the end of 2004, Malaysia warned yesterday.

Trade Minister Rafidah Aziz also lashed out at rich economies for using non-tariff barriers to "circumvent" existing WTO free trade rules.

Rafidah said "old-timers" such as the European Union (EU) and the United States bring their own political agendas into the WTO and often resort to unilateral trade actions to protect their markets.

She said next September's WTO ministerial conference in Cancun, Mexico - designed to act as a mid-term review - would just be a "nice holiday by the sea" amid sharp differences and economic uncertainties.

"With a war looming over our head... people are now much more cautious about market opening. I don't believe that in Cancun, we are going to see any more (development) beyond what we see today," she told the World Economic Forum's East Asia Economic Summit here.

"To get explicit consensus in the WTO is just like looking for a needle in the haystack... we're talking about modalities, how to go about it and this is contentious, so Cancun is going to be a nice holiday by the sea."

Rafidah urged developed nations to "be realistic about the realities of the world and not just be champions of free trade" if they want to see the Doha round of trade talks succeed.

"Their markets are open but it's impossible to bring in your products at competitive prices because there are so many things you need to do that involve a lot of costs for manufacturers from developing countries.

"They know this would not directly violate the rules and they find loopholes that validate their action," she said.

"That is why we are demanding the tightening up of anti-dumping rules, the tightening of application of export subsidies and many other subsidies that actually distort trade, not to help farmers but to prevent others from coming in."

Farming is widely recognized as key to the WTO's Doha talks launched in the Qatari capital last November, aimed at further removing trade barriers by the end of December 2004.

The US has unveiled proposals to cut subsidies, but Japan, the 15-member European Union and Switzerland want non-trade concerns of agriculture, such as environmental protection, to be also taken into account.

Rafidah said such a move by Japan and EU "only validates their policy of high subsidies for agriculture that negates market opening measures."

Indonesian Economic Coordinating Minister Dorodjatun Kuntjoro-Jakti said there must be preferential treatment given to developing countries in the Doha talks to help bridge the gap with rich countries.

Rafidah urged Asian countries to unite in their call for flexibility, preferential treatment and "gradual liberalization" in the WTO.

(China Daily October 8, 2002)

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