Building pressure in run-up to Hong Kong

Written by Malcolm Subhan | Updated: Dec 10 2005, 06:17am hrs
Who sets the rules international traders must follow Kamal Nath and his fellow trade ministers, of course, which is why all eyes are turned towards Hong Kong, where nearly 150 ministers will be meeting next week to drive forward the Doha Round of trade negotiations. But how do trade ministers set these rules, since few, if any, of them have any business experience

Trade ministers being astute politicians, they will be doing in Hong Kong what they do best. They will be playing power politics, with one eye on their voters. This can amount to a balancing act. French President Jacques Chirac has been a staunch defender of the countrys 600,000 farmers. But he also wants French entrepreneurs to go all out for biotechnology, nanotechnology and all the other high-tech industries.

But trade ministers will not be on their own in Hong Kong. In the wings will be hundreds of pressure groups from around the world. The two biggest will be representing trade unions and employers organisations. Here is the message which the International Confederation of Free Trade Unions (ICFTU), headquartered in Brussels, will be pushing as regards trade in textiles and garments.

The ICFTU wants WTO ministers to put a stop to unfair competition from China, which has resulted in soaring unemployment in the garment industries in Africa and Asia. Chinas success is mainly due to the unbridled exploitation of the workforce. But it is forcing governments and employers in many poor developing countries to follow suit by forcing terrible working conditions and very low salaries on workers employed in the textiles and garment sector.

The ICFTU is concerned that the situation will become worse after 2008, with the expiry of restrictions which the US and European Union (EU) have imposed on Chinese exports. It wants WTO trade ministers to take measures aimed at easing the social consequences experienced in many countries subjected to unfair competition from China.

But trade ministers are also being lobbied by EuroCommerce. Based in Brussels, it claims to represent the 5.5 million European companies engaged in retail, wholesale and international trade, and their 450 million customers. EuroCommerce led the fight against EU plans to impose import quotas on Chinese garments and textiles. It lost that particular battle; but it wants EU governments to be more responsible and not to extend the list of artificially protected goods. Low-income consumers, EuroCommerce maintains, for too long have borne a disproportionate share of the cost of protecting domestic industries.

Among the most powerful pressure groups present in Hong Kong will be UNICE, the Brussels-based organisation which describes itself as the Voice of Business in Europe. It represents 20 million small and large companies, through its 39 employers federations from 33 countries. Last month it teamed up with 21 similar organisations from around the world, including North America, to issue a joint business declaration. (Missing from the list, both Ficci and CII, although UNICE helps them organise the EU-India business summits, held at the same time as the EU-India political summits.)

Since the countries represented by the 21 organisations account for 65% of world trade, WTO trade ministers will no doubt be listening. The business declaration strongly supports the Doha Rounds development focus, which it maintains can best be realised through comprehensive trade liberalisation. It wants market forces to guide agricultural development, with efficient allocation of resources based on comparative and competitive advantage for all countries.

The 21 business organisations, which come from Hong Kong as well as Taiwan, and Brazil as well as Uganda, want trade ministers to substantially reduce or eliminate tariffs among, at minimum, the developed and emerging countries, and to remove non-tariff barriers. As for trade in services, trade ministers are criticised for their underwhelming level of ambition. They must vastly improve their offers, since services liberalisation will generate new export opportunities and help attract foreign investment.

Development non-governmental organisations (NGOs) like Oxfam will also be in Hong Kong. On services, Oxfam, for example, accuses rich countries of seeking to change the rules of the game, by calling for benchmarking. This, it believes, could force premature liberalisation on poor countries. Oxfam agrees that trade has the potential to lift millions out of poverty, but it sees rich countries demanding greater and greater concessions from poor countries, but giving very little in return.

Will Kamal Nath and his fellow trade ministers listen to the multitude of voices representing civil society Memories of the battle in Seattle, when NGOs helped block the launch of a new trade round, have probably faded. But whatever the outcome of the Hong Kong ministerial, the ICFTU, UNICE, EuroCommerce, Oxfam and all the other pressure groups, here in Brussels and around the world, will keep up the pressure on trade ministers.