Towards equitable trade

Although the general consensus is that the World Trade Organisation (WTO) sessions held in Hong Kong dished out "more of the same" to a world driven apart by an imbalanced trading system, some progress has nevertheless been made.

The statement approved by the global body's 149 member Governments on Sunday marks a further step in the Doha Round of Negotiations, launched in 2001. That is a creditable achievement in itself, given the disparate views of the membership.

Members aim to complete a final deal at the end of 2006 in order to start wide ranging trade reforms in 2008 that would reduce trade barriers and boost economies of poor countries.

Governments have accepted the elimination of all forms of export subsidies by the end of 2013. Such payments are seen as skewing farm trade, creating unfair competition for poor countries. A "substantial" part of the cuts are meant to be under way by around 2010.

The subsidies granted by rich nations to their farmers and industrialists have rattled poor nations to the core. In addition, they impose hefty duties on certain agricultural products from developing countries. These two factors combined can have a devastating effect on poor countries striving to sell their goods in the world market.

For example, cotton produced in many African countries are kept off Western markets by subsidies and protectionist measures. The result is perpetual poverty among many African States.

In fact, fair trade, not Official Development Assistance (ODA), is the way forward. Many countries would wish to earn foreign exchange from selling their products overseas rather than receive foreign aid in the form of grants and loans. Many rich countries have only a minimal ODA commitment and it really makes more sense to opt for trade which can mutually benefit both sides.

The power of trade is exemplified by earnings figures; For example, Sri Lanka recorded the highest export earnings in October 2005 which exceeded US$ 600 million mark and reached the highest ever monthly value of US dollars 607 million.

It is in this context that we should appreciate the decision by industrialised countries and developing countries "declaring themselves in a position to do so," to give "at least 97 per cent" of goods from the world's least developed countries access to their markets from 2008.

Little progress has been made in the field of industrial goods. Rich nations want developing countries to give them more market access for manufactured goods.

Negotiations on liberalising trade in services which includes banking, insurance and tourism are also making slow progress. According to WTO statement, new market-opening requests should be made by the end of February and Governments must draw up their final plans on services by the end of October.

That is a tight deadline, but Governments must expedite their action plans to conclude these negotiations early.

An equitable trading system will benefit both developed and developing countries alike and usher in a new era of global economic co-operation.