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 You are in: Special Report: 1999: 11: 99: Battle for Free Trade
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Tuesday, 23 November, 1999, 21:52 GMT
Developing countries fight for free trade
Developing countries say calls for labour standards are veiled protectionism

Think of trade with developing countries and think of sweatshops, underage workers and plundered rainforests.

The battle for free trade
Protestors will use the Seattle trade talks to campaign on labour and environmental standards.

But poorer countries dismiss this talk of human rights as a protectionist fudge.

Top of their agenda is getting their goods into Western markets.

Trade blocs

The 77 or so developing countries that belong to the WTO have yet to cohere into one trade bloc. In this, they operate at a disadvantage to the US and Europe, whose interests and geographical remit are clear.

India is a leading force among the developing bloc
Leaders of the regional blocs at this stage appear to be Kenya, who has emerged as one of the leading voices in African discussions, while India is one of the louder voices in favour of opening markets.

But news that China, one of the world's largest economies, is to join the WTO could provide a focus for the disparate group.

"It could be that China's membership, given its size and importance, it could help bring the issues of developing countries to the fore," Claire Melamed, trade policy officer at Christian Aid said.

But while China celebrates the phase-out of quotas on textile imports, due to be completed by 2005, Christian Aid says the deal they got could have been bettered, indicating that China's membership may not improve the bargaining position of WTO members.

"The deal that China has got on textiles isn't that great. The US isn't planning to open up its markets (fully) till 2005 and they then retain the right to keep an eye over it," she said.

A shut door

The most contentious areas where barriers still exist are textiles and agriculture.

In other areas, tariffs have noticably fallen. Tariffs on metal products exported to OECD markets have dropped by an average of 67%.

While tariffs on textiles, one of the largest markets for developing countries, should be dropping, progress has been slow.

Some observers say that the crucial difference between what developing and developed countries want is that the former want to review measures that have been implemented.

The plan to phase out the Multi Fibre Arrangement (outlawed in the Uruguay Round) has been done very "slowly and grudgingly", Christian Aid's Melamed said. "They have kept their tariffs as high as possible," she said.

By placing tariffs on processed textiles, the finished product, developing countries are deprived of the chance to make money on higher-profit goods.

While tariffs on, for example, raw cotton, may be low, these goods have a relatively low value on international markets.

Agricultural barriers

Agriculture is a staple of many developing economies and many argue that an uneven playing field, namely European Union subsidies, works against them.

EU subsidies hurt developing countries exports
Many poorer countries cannot afford to subsidise their agriculture sectors in a way which would enable them to compete with the subsidised exports entering the world market from some of the rich, developed countries.

The Australian-led Cairns group of major agricultural countries want the focus kept firmly on agriculture, particularly the EU's Common Agricultural Policy.

They say the share of global agricultural trade accounted for by developing countries is well below its potential.

The Cairns Group wants to eliminate trade-distorting subsidies as well as clear rules to prevent circumvention of commitments.

Its members include Argentina, Brazil, Indonesia, South Africa, Thailand, and Uruguay.

Whose property?

Led by India and Brazil, developing countries want the right to delay implementation of WTO rules on intellectual property.

They want to relax the laws on pharmaceutical patents so that poor countries can produce drugs to fight malaria, tubercolosis and Aids cheaply.

Brazil and India could be forced to pay $2bn in royalties for Western copyrights and patents.

Moore on their side

In theory, developing countries have the new boss of the WTO on their side.

The new boss of the World Trade Organisation, Mike Moore, has said he wants to make it his priority that small countries can enjoy the same benefits from free trade as larger nations.

The former trade unionist said wealthy trading blocs would have to open up their markets to goods from poorer regions.

He said there was a "moral imperative" that richer countries dropped their trade barriers which barred imports from developing nations
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See also:
22 Oct 99 |  The Economy
WTO's labour battle
02 Sep 99 |  The Economy
WTO, champion of the 'vulnerable'
31 Aug 99 |  The Economy
Supachai Panitchpakdi, the World Trade chief-in-waiting

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