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    World Tr@de Net: Networking on Trade Talks

     

     
     
    © International Trade Centre, International Trade Forum - Issue 4/2004 
     

    Photo: Bulgarian Industrial Association WTO Director-General Dr Supachai Panitchpakdi and ITC Executive Director J. Denis Bélisle (centre) headed a high-level panel at ITC's May 2004 Business for Development meeting in Sofia, Bulgaria. Also on the panel were (left) George Shivarov, Vice President of the Bulgarian Industrial Association, and Lydia Shouleva, Bulgarian Deputy Prime Minister and Minister of Economy.

    If developing countries are to benefit from the world trading system, their private and public sectors have to work together with their governments and negotiators to shape a common strategy. But achieving that cohesion is not so easy.

    When the General Agreement on Tariffs and Trade's (GATT) Uruguay Round was gavelled to a conclusion on 15 December 1993 after seven long and difficult years of negotiations, officials from both developed and developing countries heaved a sigh of relief. The richer members of the GATT - to become the World Trade Organization (WTO) in 1995 - saw the prospect of getting more goods and services into emerging markets, as they lowered the barriers that had shielded their economies for decades. Developing countries, or at least their governments and negotiators, were confident that, in return for dismantling the subsidization and state support that had allowed them to create and expand national industries, new and lucrative markets for their nations' products in the more advanced economies would open up quickly.

    But that vision began to fade soon after the ink dried on the Round's Final Act, signed in Marrakech in April 1994. As company executives in Asia, Africa and Latin America became aware of the details of what some of their national leaders and negotiators had agreed to, an initial concern quickly turned to anger. "How could you commit us to restructuring so soon?" was the bitter refrain they directed at governments across the developing world. "Well, you never told us what you wanted out of the Round," replied the governments. "And you never asked us!" came the retort. "How were we supposed to know what the negotiators were doing?" "All right," the governments responded, "we'll see if we can get the agreements changed."

    So was born the "implementation issue" - essentially a battle over renegotiating Uruguay Round texts that had appeared set in stone - which is still bedevilling the WTO and relations between its richer and poorer members a decade later.
     

    Working with business communities

    At ITC, experienced hands had been among the first to see the problem looming on the international horizon. Under its Uruguay Round follow-up programme from 1995, ITC launched a major effort to ensure that business communities in developing countries understood what the often highly technical agreements, and the new trade rules that underpinned them, meant in practical terms. In partnership with the Commonwealth Secretariat, it produced a solid Business Guide to the World Trading System in English, French and Spanish. Partners have published the guide in ten other languages. ITC has continued to provide information through a regular stream of publications explaining the business implications of individual WTO agreements.

    ITC experts travelled the globe and held seminars around the world to underline to busy business leaders - and also interested government trade officials - just what the Round agreements meant to them.

    Addressing an absence of dialogue

    But that, it soon became clear, was not enough. The Uruguay Round had provided for a new set of negotiations from the start of the 21st century that would extend some of the 1994 accords, in particular in services and agriculture. The richer powers were pushing hard for these negotiations to be incorporated into a full new round and to include negotiations to reduce tariff levels further for manufactured goods. How to ensure, if this came about, that the mistakes of the past were not repeated? Clearly, the absence of a genuine dialogue between the business community and governments in many developing countries, and the transition economies that emerged from the end of Communist rule in Central and Eastern Europe, was one issue that had to be addressed. But to ensure such a dialogue benefited national economies as a whole, businesses had to start setting aside sectoral rivalries and working together to make sure their governments knew, and took into account during negotiations, their views on the shape of any new trade agreements. The concept of "business advocacy for trade talks" came onto ITC's agenda.

    "In more than half the world, business interests are not sufficiently integrated in national trade negotiating positions," says Peter Naray, ITC's Senior Adviser on the world trading system, who has been instrumental in demystifying WTO issues for business people. "This can lead to governments agreeing to trade rules under which their firms may not be able to do business. Informed, targeted and timely business advocacy can help developing countries conclude beneficial agreements."

    In July 1999 ITC launched the World Tr@de Net programme, which is funded by the governments of Germany, India, Norway, Sweden, Switzerland and the United Kingdom. The idea was to bring together - nationally and later regionally - government officials, companies, trade lawyers, consultants and private individuals including academics, economists and even specialist journalists to pool experiences on WTO affairs. The aim was to help establish sustainable, if informal, networks to exchange ideas and information, and serve as a platform for the voice of the business community. They were also a focus for ITC activities to promote dialogue between business and government on trade development issues of concern to them.

      ITC brings together negotiators, business people and trade experts to promote a greater understanding of the trade issues that affect them, and to prepare a response. This is essential to helping developing and transition countries negotiate more effectively as global trade talks unfold. (Photo: ITC) 

    A "development" round

    As momentum built to agree on a new round of talks at the WTO's Ministerial Meeting in Doha, Qatar at the end of 2001, word began seeping through that developing country and transition economy businesses did not want to see another failure. Companies across the developing world welcomed the agreement to launch what was dubbed the "Doha Development Agenda" or DDA - a round that was to be focused on helping poorer countries raise living standards by becoming more active players in global markets.

    The DDA gave a fresh impetus to the World Tr@de Net, as negotiators prepared to bargain anew and businesses drew up "wish lists" and focused on ensuring that governments took these into account. ITC extended and enhanced the programme by launching a series of regional Business for Cancún conferences in advance of the WTO ministers' meeting in Mexico in September 2003. These gatherings, renamed Business for Development after Cancún, and financed by the governments of Canada, Sweden, Switzerland and the United States, bring together government leaders and representatives from business communities in developing countries on the same continents. They have the twin aims of alerting businesses to where the talks might be going and attuning trade officials to business thinking. "Governments negotiate trade agreements but companies do business," says Ramamurti Badrinath, Director of ITC's Division of Trade Support Services. "The two are therefore natural partners when it comes to preparing and executing negotiating strategies as well as implementing the agreements that emerge. It is this partnership that will ensure the development dimension of the DDA."

    Business in Cancún

    Perhaps partly as a result of these recent and ongoing efforts, some 50 developing country delegations to Cancún brought along business representatives for the first time. Although the business people - like their counterparts from the rich trading powers, who are routinely consulted by their governments and shout loudly if they are not - could not take part in the negotiations, they were on hand for quick consultation. Many had never been so close to the decision-making that impacts directly on their operations and on their prospects for growth or failure.

    Of course, a number of developing countries - Mexico was one outstanding example - had already established good public-private partnerships for trade talks well before ITC launched its initiative. But just how little contact there had been between some governments and business was illustrated in a poignant scene on a bus taking delegations from their hotel to the conference centre in Cancún. Two leading private sector representatives from a smaller Asian country wove their way down the aisle staring intently at identification badges. "We are looking for our vice-minister of trade, who is attending this Business for Cancún meeting," one said. "We have never met him."
    In the event, Cancún did not achieve a breakthrough on key problems. Amid rejoicing by anti-globalization demonstrators, some developing country leaders hailed what they saw as a victory over the rich. However, returning home, another message came through. "We let our government know that we did not see any triumph," said one East African businessman at a Business for Development conference in Nairobi in March 2004. "They were right to be tough, but failure is no good to anyone. We told them: 'Do your best to get those talks under way again as soon as possible'." At the end of July, agreement was reached in Geneva on the outline of the decisive stage of the negotiations and the DDA was back on track.

    Good news: The view from Bishkek

    "That was good news," says Tatiana Philippova of the Bishkek Chamber for Trade Promotion in Kyrgyzstan. "And what was especially good was that this time our negotiators listened to the business community beforehand and defended our interests." It was not always that way in the mountainous Central Asian state that emerged from the old Soviet Union in 1991. Following independence, the country was admitted to WTO in 1998 after less than three years of negotiations to join - a record speed. However, Kyrgyz officials had accepted terms, including almost wholesale lowering of goods tariff barriers, that left private companies - which were only beginning to spread their wings in a country that for seven decades had been run as a single state enterprise - shaking their heads in dismay. Young entrepreneurs and economists set up the Bishkek Chamber in 1999, partly to ensure that this could not happen again. By 2001 it had joined World Tr@de Net. "That was a vital decision," says Ms Philippova. "We had access to the information that our young companies needed to help them understand the workings of the international trading system and to see possibilities for new export markets. It also gave us the chance to see how business in other countries makes sure that government is fully aware of their interests when they are negotiating trade agreements."

    The Bishkek Chamber's efforts came to fruition in June 2003 when the Kyrgyz government created an Inter-Departmental Commission on WTO issues, bringing representatives of ministries and the private sector together on a regular and mandatory basis to discuss the country's negotiating positions and to draw up an overall plan. The outcome was reflected in the stance the Kyrgyz delegation took in 2004 in Geneva, where it made clear that it could not agree to any further substantive lowering of its own tariff barriers in the Doha Round. Dialogue between business and trade officials, and ITC information, also helped one Kyrgyz company to sell its bottled mineral water in the vast Chinese market and another to supply honey to the European Union. Small items on a global scale, perhaps, but big news for landlocked Kyrgyzstan.

    "This has been a huge step in bringing businesses closer to the global marketplace," says Sabine Meitzel, Chief of the Business Advisory Services Section at ITC.

    And not only Bishkek…

    The Kyrgyz experience with World Tr@de Net has been duplicated in many other developing countries and transition economies, all of which are emerging to one degree or another from the highly protectionist systems of the past, as globalization moves on apace. "World Tr@de Net has helped our business community to intensify the dialogue with the government's negotiating team in the new round, and this will strengthen our participation," says Rigoberto Monge, a business leader from El Salvador. Members of the Bulgarian network have been helping prepare the country's negotiating position in the services sector in the Doha Round, according to Borislav Georgiev of the Bulgarian Industrial Association.

    In Pakistan, Mohammad Saeed Akhtar, head of the country's International Trade Initiative, explains that contact and discussion through the local World Tr@de Net network has helped allay fears within the national pharmaceutical sector about its future when the WTO intellectual property agreement, TRIPS, comes into force in 2005 and has pointed to preparations the industry can make. In Swaziland, sugar company economist Rechi Dlamini says discussion among World Tr@de Net members there helped establish the need for an overall and sustainable national trade policy. "The dialogue also made members realize the importance of coordinating our efforts with partner countries in the region," she says.

    World Tr@de Net, with its extensive web site (http://www.intracen.org/worldtradenet), now has networks in 52 countries, from Albania to Zambia. It includes larger emerging economies such as Argentina, Brazil and Malaysia; smaller but influential trade powers like Egypt, Nigeria and the Philippines; and some of the world's poorest countries - Cambodia, Haiti and Lesotho, for example. But it is also present in four of the European Union's newest member states - Estonia, Hungary, Latvia and Lithuania­ - and in countries still seeking to join the WTO, such as Belarus, Kazakhstan, Ukraine and Viet Nam. An independent evaluator has given it the thumbs up and it looks set to expand further. "We see it as a permanent fixture," says Mr Badrinath. "As long as we are wanted in an active role, we will be there. But more and more, network members are shaping it. And making it work for their community and their countries."


    Writer: Robert J. Evans

    Organizations mentioned in this story:
     


      


    Related ITC websites
     

    World Tr@de Net
    http://www.intracen.org/worldtradenet/welcome.htm