WTO and ASIA
Trading System Must Be Friendly To Developing Nations
By Fr. John Felix Raj.
Asia is steeped in a sense of the sacred. We sense a cosmic
worldview in the holistic approach to life with rich cultural diversity
expressed in art, architecture, music, and the rich classical and folk
traditions. But modern media, IT and globalization-liberalization forces are
posing a serious threat to the much-desired Asian unity for economic
cooperation. The glaring reality of the vast multitude of poor, the varied
deprivation and dehumanization, rampant corruption and injustice and the
inevitable exclusion of the displaced, untouchables, women, indigenous and
migrant communities confront Asia. The exploitation of our eco-systems further
aggravates the plight of the poor.
Asia, by far the biggest, most populous and culturally diverse continent, is
currently taking giant steps towards economic integration and closer political
cooperation. With 3.5 billion people - well over half the population of
humankind -- the nations of Asia is divided by language, ideological
orientation, religion and race. In spite of the differences which run far deeper
than superficial appearance, as the Asia’s first Nobel Laureate, Rabindranath
Tagore rightly foretold, “Asia is one” a united Asia is in the making.
In this context, global cooperation and, in particular, Asian economic unity
must come above the forces of commerce and trade. As Supachai Panitchpakadi, the
first Asian Director-General of WTO has rightly said, “For the noble hearted,
the whole world is one family”. [ii] Asian countries, with their human,
natural and financial resources, fast developing communication media and IT,
rich cultural diversity and heritage, have the potential to emerge as global
leaders in trade, commerce and investment. In a recent of consultation organized
by SAWTEE [iii] before the sixth Ministerial, Bharat Bahadur Thapa of
Nepal urged that the developing countries have to maintain their unity of
purpose to extract a fair deal out of the multilateral trade negotiations. They
need to play an effective role in WTO matters. Asia has to lot to offer to the
GATT & WTO
1948. The Second World War had just ended. The founders of the post-war economic
order had the foresight to recognize that economic co-operation must be central
to achieve a lasting peace. This is perhaps most clearly encapsulated in the
words of President Roosevelt to the Bretton Woods conference in 1944. He
reflected that “Commerce is the life blood of a free society.” He also urged
that “we must see to it that the arteries which carry that blood stream are not
clogged again, as they have been in the past, by artificial barriers created
through senseless economic rivalries”. [iv] From this imperative, were
built the three pillars of the post-war international economic order: the
International Monetary Fund; the International Bank for Reconstruction and
Development (the World Bank) and the multilateral trading system embodied in the
General Agreement on Tariffs and Trade.
The GATT was created to bring order, security and fair and
transparent competition to international trade. Its rules defined what the
governments could - or could not - do with their trade policies. GATT was also a
forum for countries to settle disputes and to negotiate lower trade barriers.
GATT was the outcome of the great depression and the Second World War; a time in
our history where countries mistakenly believed that they could solve their
problems by living in isolation. The Hawley Smoot Tariff Act that had raised US
tariffs to their highest protective levels ever, had set in a motion a trade
war. The net result of that war was a sharp decline in international trade, and
a loss of welfare of massive proportions. But from the mistakes of our past,
came an important lesson for our future that we needed multilateral institutions
that could make the world a more orderly place to live in [v].
The World Trade Organization (WTO) was founded in 1995 to
replace the GATT. The establishment of the WTO represented “a gigantic leap
forward towards broader and more intensive international co-operation”. This
multilateral organization aims to lower tariffs and non-tariff barriers so as to
increase international trade. The WTO deals with the global rules of trade
between nations. Its main function is to ensure that trade flows as smoothly,
predictably and freely as possible. The 146 member states meet in ministerial
sessions at least once every two years. Essentially, it is a place where member
governments try to sort out the trade problems they face with each other. It is
an organization for liberalizing trade. It operates a system of the trade rules.
The bulk of the WTO’s current work comes from the 1986-94
negotiations called the Uruguay Round and earlier negotiations under the General
Agreement on Tariffs and Trade. The Uruguay Round with 123 member countries took
major steps towards correcting some serious weaknesses in the international
trade rules, though some of them were taken reluctantly. But steps like
incorporations of agriculture within the international rules have not been fully
implemented in economies like USA, EU and Japan.
WTO Ministerial conferences
The Ministerial Conference is the highest authority in the World Trade
Organization (WTO) structure and takes decisions on all matters under
multilateral trade agreements. Since its inception in 1995, the WTO has held six
Ministerial Conferences, the sixth one being held from 13 to 18 December 2005 in
Hong Kong, a founding member of the WTO.
The First WTO Ministerial Conference was held in Singapore [vi] between 9
and 13 December 1996. Trade, foreign, finance and agriculture Ministers from
more than 120 World Trade Organization Member governments and from those in the
process of acceding to the WTO participated in the Conference. The Conference
was the first since the WTO entered into force on 1 January 1995. It included
plenary meetings and various multilateral, plurilateral and bilateral business
sessions. The members examined issues related to the work of the WTO's first two
years of activity and the implementation of the Uruguay Round Agreements. They
reviewed the ongoing negotiations and Work Programme and examined developments
in world trade.
The Second WTO Ministerial Conference was held in Geneva [vii],
Switzerland between 18 and 20 May 1998. It took place at a particularly
significant time for the multilateral trading system, when the fiftieth
anniversary of its establishment was being commemorated. On this occasion
members paid tribute to the system's important contribution over the past
half-century to growth, employment and stability by promoting the liberalization
and expansion of trade and providing a framework for the conduct of
international trade relations, in accordance with the objectives embodied in the
Preambles to the General Agreement on Tariffs and Trade and the World Trade
The third Meeting in Seattle in November 1999 collapsed since developing
countries refused to accept a process from which they had been excluded. It was
all “take and no give” by developed countries. There were many differences in
the perspectives of developing and industrialized nations on the current reality
of free trade and how it affected them. There had been a shift in the balance of
power. The developing countries concluded that they could not only negotiate,
they could block negotiations.
More than 700 organizations and between 50,000 and 1,00,000 people took part in
the protests on November 30 against the WTO's Third Ministerial conference. The
fact that so many people turned up in the pouring rain, through all the police
crackdowns etc indicates the sheer number of people who were concerned at the
current issues, as obviously not everyone could be in Seattle. They argued
against the current corporate-led free trade and were wanting fairer trade with
less exploitation. These groups and citizens sensed a cascading loss of human
and labor rights in the world. 587 persons were arrested on that day.
One eyewitness, a promoter of non-violence, Matt Guynn, distributed the
following account of police brutality over the Internet: [viii]
In one scene I witnessed this morning (at 8th Ave and Seneca), police who had
been standing behind a blockade line began marching in lock-step toward the
line, swinging their batons forward, and when they reached the line they began
striking the (nonviolent, seated) protestors repeatedly in the back. Then they
ripped off the protestors' gas masks, and sprayed pepper spray at point-blank
range into their eyes repeatedly. After spraying, they rubbed the protestors'
eyes and pushed their fingers around on their lips to aggravate the effect of
the spray. And after all THIS, they began striking them again with batons....
The police then were able to break up the line, and the protestors retreated to
the steps of a nearby church for medical assistance.
The Fourth WTO Ministerial Conference [ix] was held in Doha, Qatar from 9
to 14 November 2001. At Doha, there was further evidence of the ability of
developing countries to influence trade outcomes. A clearer victory in
agriculture and other areas was forthcoming. While the broad support for the
successful anti-subsidy position in agriculture seemed a developing country
achievement, the developing countries were a visible part of the alliance. The
meeting accepted that special and differential treatment (allowing different
policies by developing countries and requiring different policies towards them)
would be “an integral part” of any final settlement, potentially better than the
Uruguay Round, which had offered only minor adjustments to policy and
The Conference adopted a declaration to assist developing countries in
implementing WTO agreements, covering issues related to agriculture, services,
industrial tariffs, investment, and trade and competition policy. The
declaration provides the mandate for negotiations on a range of subjects and
other work, including issues concerning the implementation of the present
The declaration set 1 January 2005 as the date for completing all but two of the
negotiations. Negotiations on the Dispute Settlement Understanding are to end in
May 2003; those on a multilateral register of geographical indications for wines
and spirits, by the next Ministerial Conference in 2003. Progress is to be
reviewed at the Fifth Ministerial Conference in Cancun, Mexico. Doha also
extended the time for least developed countries to comply with subsidy and
intellectual property rules. These issues were accepted at Doha in spite of
initial strong opposition by developed countries, indicating that developed
countries thought they were a necessary part of any bargain. The Doha Round is
widely acknowledged as a “development round” that promised to place development
at the heart of trade negotiations and focused on issues on direct interest to
WTO negotiations at Cancun, Mexico on September 10-14 2003 also collapsed amid
deep divisions between the USA, EU and Japan on one side and the Group of 23 led
by India, Brazil, South Africa and China, on the other. [x]
sides, already at odds on agricultural issues, deadlocked over proposals for WTO
rules on investment, competition, trade facilitation and transparency in
After the Cancun deadlock, WTO members in Geneva began
efforts to put the negotiations and the rest of the work programme back on
track. Work intensified in the first half of 2004, and after days of closed-door
negotiations, a package of framework agreements was reached. It was the
so-called “July package” [xi] - the General Council’s post Cancun
decision on the Doha Agenda work programme, agreed on 1 August 2004, containing
frameworks and other agreements designed to focus the negotiations and raise
them to a new level.
The rich countries had delivered a deeply unbalanced text as
a “take or leave it” option. This had put developing countries in the unfair
position of having to accept a bad deal or reject and get blamed by the USA and
EU for failure. But the “development” aspect of the agenda had disappeared from
view, leaving WTO business as usual in its wake. Not single one of the more than
80 implementation issues raised by developing countries had been addressed.
On industrial tariffs, the July Package repeats proposals
that were strongly rejected by developing countries in Cancun. These proposals
to lower tariffs for industrial products will favour multinational companies
that are already established in the international market. They will not help
developing or least developed countries diversify and strengthen their
The Sixth WTO Ministerial Conference was held in Hong Kong, China, 13–18
December 2005. Prior to the Conference, 70 participants from 16 Asian countries,
representing migrant, trade, development, labour, women's and social action
groups and networks, made a declaration, after their "Regional Conference on WTO,
Development and Migration, that
“We recall with pride the historic success achieved by the people's movements at
Seattle and Cancun in derailing the Ministerial meetings of the WTO in 1999 and
2003 respectively. There is a real danger that negotiators will use the meetings
of the WTO General Council in July and October 2005 to force a backdoor deal
before the Hong Kong MC6, as they did in July 2004 in Geneva. We reject this
framework that treats workers, women and migrants as tradable commodities. We
reject the AoA framework that has caused the widespread collapse of rural
economies, displacing communities and increasing forced internal and external
The Road to WTO Hong Kong Conference was bumpy, not smooth. The Conference began
with a pessimistic note. The negotiations were within two frameworks: Doha
ministerial declaration of November 2001 and the July Package which was an
unbalanced compromise as it favored the developed countries and ignored most of
the concerns of the developing countries. After the intense negotiations - and
protests, the WTO claimed that a global trade deal was still possible by the end
of this year. The summit declaration provided a rough plan for governments to
conclude the current round of talks. There is very little time left for
governments to overcome the tensions of Hong Kong and agree a blue print within
the dead line of a deal by the end of 2006.
The Hong Kong “contest turned into a four-cornered one. With
G-20 and G-33 on one side, the EU, the US and the least developed countries (LDCs)
were the other three actors. As usual, developed countries started shedding
crocodile tears for LDCs. A plethora of hollow promises in the form of “aid for
trade”, duty free and quota free market access and many more aid offers were
served to the LDCs. The main objective was to shift the focus away from the core
agenda of trade liberalization as evident from the EU Trade Commissioner
Mandelson’s statement that he was at the outer limit of his mandate and has
nothing much to offer. The G-20 and G-33 on their part tried to be practical.
They realized that it would be foolish to expect any ambitious result from Hong
Kong given the prevailing divergence of opinions on agriculture.”
“The first ever joint G-20 and G-90 Ministerial level meeting
took place on 16 December. Both the Indian Commerce Minister Kamal Nath and his
Brazilian counterpart Celso Amorin were instrumental in building this grand
alliance of 110 countries covering 4/5th of the humanity. This thwarted and
called the bluff of the rich countries to lure the LDCs and divide the Southern
unity. The G-110 meeting also proved that their unity at Cancun was not a fluke
but it will sustain. Only after this, the focus of the negotiations was brought
back to the main agenda resulting in the release of a revised text on 17th
December and adoption of the final declaration on 18th December.”
Indeed, one major point at Hong Kong was the role played by
leading members of the G20 group, notably Brazil and India, both of whom
reportedly helped to broker final agreement of the summit’s declaration. The
rise of Brazil and India as necessary deal-makers marks a welcome power shift in
a WTO traditionally dominated by the major industrial powers, offering the
potential for a more democratic WTO and for developing country interests overall
to be more effectively represented. [xvi]
Speaking in Hong Kong on the opening day of the World Trade
Conference, Nobel Prize winner and former Senior Vice-President of the World
Bank, Joseph Stiglitz acknowledged that the WTO "sets up policies and makes
decisions affecting almost every one in the economic world," but that "people
who are affected by the decisions everyday have no right to vote."
This "democratic deficiency" is a major cause for the volatile protests that
accompany the WTO wherever it travels. As is so often the case, wherever the WTO
touches down it manages to successfully divide communities. Hong Kong is no
exception. The community is still digesting the events that occurred outside on
the streets during the conference, not those that took place behind closed
The split between developed and developing countries is not new. It was one of
the factors that led to the failure of the Seattle talks. However, a potent new
force challenging the USA and EU has emerged inside the WTO. The G-23 represents
85 per cent of the world’s farmers and more than half the global population.
The developing countries have formed powerful developing country alliances. In
fact, the “Cotton 4,” the “G20,” the “G33” and the “G90” have succeeded in
placing their interests at center stage. Agriculture negotiations are now seen
as a key ingredient of the Doha Round, and that is primarily because of the
importance of this sector to developing nations. After all, 73% of the poor in
developing countries live in rural areas. In a recent of consultation organized
by SAWTEE before the sixth Ministerial, Bharat Bahadur Thapa of Nepal urged that
the developing countries have to maintain their unity of purpose to extract a
fair deal out of the multilateral trade negotiations. [xix]
It is a fact that rich countries protect their own trading interests - to reduce
agricultural subsidies and open up vast new markets. They bully the poor
countries and their concerns are often marginalized. Agreements are often
discarded and the developing countries sidelined. The third world countries are
concerned about the effects of liberalization and globalization on trade, on the
environment, on jobs, on cultural and social issues, which are important.
As observed by Oxfam, small wins were achieved by developing
countries in the form of stronger language on agricultural export subsidies and
export credits and the dropping of three out of the four so-called “Singapore
Issues” [xx] but overall the final text of the framework remained
disappointing and did little to advance the round of talks, said Oxfam. Apparent
concessions by the USA on cotton were not legally binding and would not
guarantee an end of the harmful regime.
According to Professor Walden Belo, [xxi] a long time
critic, the developing countries have waited nearly 10 years for the trade
superpowers that dominate the WTO to show sensitivity to their efforts to change
global trade from being an instrument of their domination to serving as a
mechanism to advance their economic development. For this patience, they have
been rewarded with a succession of anti-development negotiating frameworks and
texts culminating in the July Framework.
Poor countries and NGOs fear that further liberalization of trade will only
benefit rich countries. WTO negotiations favor the interests of investors and
neglect agricultural protectionism by rich countries. Critics often charge that
the WTO functions undemocratically and that it has opaque negotiation procedures
that harm the interest of the poor. [xxii]
Poverty is the serious problem in many developing countries and so trade rules
must support poverty eradication. Agriculture is the main source of livelihood
and employment for people. But global trade in agriculture is in a mess. There
is very little progress made in the agricultural side. Rich countries spend
billions subsidizing their agricultural sector, leading to chronic
overproduction and dumping surpluses on global markets. Poor countries demand
reform of this trade practice that impoverishes small-scale farmers.
The UN Food and Agriculture Organization reported in December 2004 that the
number of hungry people in the world had grown by 18 million since 2000, so
there are now 852 million people living with hunger. Governments are far from
achieving the Millennium Development Goals of halving the number of people
living below the poverty line (less than $1 a day) between 1990 and 2015.
Indian farmers have been losing $1.1 billion annually to their counterparts in
developed countries, says a study. The total lost agriculture-related income for
developing countries because of trade-distorting subsidies that enrich farmers
and traders of developed countries amount to $24 billion, says the study by
Washington-based policy watchdog International Food Policy Research Institute (IFPRI).
[xxiii] The study found the US responsible for a third of all distortions
to agricultural economies of developing countries. All European Union countries
put together were responsible for about half of the distortions while Japan and
other high-income Asian countries caused another 10 per cent of income loss.
In Ghana's Katanga Valley, the staple food is rice. This comes as no surprise,
given that the fields for miles around are paddies. Look a little further and
the sacks piled high on village walls sport an American flag. This most simple
of foods is brought in courtesy of the US department of agriculture. Presumably,
it comes out of the aid budget. Look a little further again and the fields lie
fallow. The powers that be, presumably the lending institutions, have decreed
that local rice is not quite good enough, or cost-effective enough, for
international markets. [xxiv]
Benin, Chad, Mali and Burkina Faso, [xxv] whose economies are heavily
dependent on cotton, have called for all trade distorting policies in the cotton
sector to be addressed in the Doha Round. These countries have seen the
international price of cotton fall by some 40% in recent years, in part due to
the subsidies that the rich hand out to their farmers. Needless to say, this has
had a serious impact on their economic situation.
If the US and Europe removed their farm subsidies, the value of African food
exports would double. According to Oxfam estimates, protectionism in rich
countries costs the developing world £60bn a year. The organization cites the
example of sugar. Under the current regime of quotas and high tariffs, Europe's
sugar prices are set at almost three times world market levels. Each year,
European consumers and taxpayers foot the bill, of roughly £1bn, while
developing countries - encouraged to liberalize their markets under IMF/World
Bank strictures - suffer the consequences.
Sophie Murphy of the Minneapolis-based Institute for Agriculture and Trade
Policy (IATP) [xxvi] identifies agricultural trade issues as critical
since 'agriculture is the main source of employment and livelihood for people in
many developing countries and is arguably the most important sector for an
agenda to eradicate poverty'. New rules are clearly needed since 'the current
mix of national policies and multilateral rules have sent commodity prices
plunging and dramatically increased poverty', with more people now living in
poverty than in 2000. Despite the criticisms made of rich countries with regard
to dumping the 'July package does not get at the problem … rich countries have
again ensured that the proposed rules will not force any actual cuts in their
spending on agriculture. The scope for spending will be diminished, but spending
levels will remain largely unchanged'.
She also argues that the July package rules 'fail to address
one of the worst problems: the dumping of agricultural products in world markets
at prices that are below the cost of production'. This problem is 'a structural
feature of current commodity markets because of the power of a small number of
private firms' whose 'market power enables them to set prices at the expense of
farmers and consumers alike'. She cites cotton as an example in this regard, and
argues that 'the WTO approach fails to respect the broader objectives that many
countries have for agriculture - including meeting the human right to food and
establishing a strong rural sector as a basis for economic development', which
she maintains 'depend on a strong government role and on regulating the private
sector', something which the WTO approach sees no need for. She argues in favour
of trade rules which 'allow policy space so countries can determine the best
course for their specific development needs; end dumping; and permit policies
that strengthen farmers' power in the market places'.
This is the global food scandal in microcosm. There are thousands of examples
like this where heavily subsidized commodities from the so-called developed
world are dumped on the poor, while they are prevented from securing access to
the markets of the rich. It is in this economic deviancy that the two big issues
of the moment - Europe and the G8 - coalesce. The Katanga story might equally
have involved food sent from the European Union or Japan, the two other
purveyors of trade immorality.
The WTO approach fails to respond to the needs of many developing countries
particularly in the field of agriculture. To address the problem of the
developing countries, trade rules need to change: 1. they must allow policy
space for countries to determine the best course for their specific development
needs; 2. they must stop dumping and 3. They should permit policies that
strengthen farmers’ power in the marketplace. [xxvii]
What the developing countries have asked for is greater market access, and rules
that are more fair and balanced. “Opening markets to products of export interest
to developing countries is in fact the greatest contribution that the WTO can
make to a country's development. But we must not forget in that equation that
imports are just as healthy for a country's economy as exports. It is through
greater competition that countries become more efficient at what they do.
Imports make them more competitive and enable them to export. In fact, imports
and exports are two sides of the same coin.” [xxviii] Furthermore, rules
that significantly reduce trade distortion in sectors of interest to developing
countries, and that simplify and improve customs procedures — what we call
“trade facilitation” in our jargon - are also high on the agenda of developing
About two-thirds of the WTO’s around 148 members are
developing countries. They can play an increasingly important and active role in
the WTO because of their numbers, because they are becoming more important in
the global economy, and because they increasingly look to trade as a vital tool
in their development efforts. Developing countries are a highly diverse group
often with very different views and concerns. The WTO’s new rules for global
trade present both opportunities and challenges to Asian developing countries.
Trade must contribute to poverty eradication. Pro-poor trade
measures have a direct impact on poverty reduction while pro-growth measures
have indirect effects. Since trade liberalization policies in developing
countries may adversely affect the poor in the short run, a cautious approach in
necessary so that existing socio-economic and institutional structures respond
in a pro-poor manner to the structural adjustments from trade liberalization.
Since WTO’s decisions and actions have far reaching effects
on the lives of billions of people and the environment upon which they depend,
it should make the multilateral trading system more open and friendly to
developing countries. Its operations and decision-making procedures have to be
more transparent, participatory and democratic.
US policy has been that of divide and rule. Munakata Naoka
writes in Japanese journal Jiji Top Confidential: "After the Malaysian Prime
Minister, Dr. Mahathir Mohamad's proposal 12 years ago to create the East Asia
Economic Caucus (EAEC) met strong objections from the US, East Asia — wide
regional initiatives remained a taboo for years. But the 1997 Asian currency
crisis changed the tide. From the late 1980s through the early 1990s, when
concerns mounted in the US over Japan's economic power, Washington fiercely
opposed the EAEC vision. And it attempted to reinforce and utilize the APEC
framework as a tool to promote trade liberalization in Asia... Following the
conclusion of negotiations with China on its WTO accession, the US has become
active to drive a wedge into Asian moves toward bilateral FTAs among them. The
US made its first move in the fall of 2001 when it suddenly agreed with
Singapore to launch FTA negotiations." [xxix]
The main problem in the global economy is that 20 per cent of
the people located in the US, the European countries and Japan consume 80 per
cent of world's resources. The 20/80 asymmetry requires that we build an
alliance of the 80 per cent people of the world who are now consuming only 20
per cent of the world's resources despite most of these resources being in their
countries. The US is striking an alliance with the European Union, Japan and
Singapore to drive a wedge among the developing countries — especially India and
Single Asian Currency
If the sense of Asian unity has to be promoted, then a single Asian currency can
either facilitate that Asian unity or become a common means towards that end.
"The case for a single Asian currency is overwhelming," declared Hong Kong's
chief executive, Donald Tsang, at a conference in China in April 2005. But
unfortunately, reality is not that simple. Asia is not like Europe that needed a
single currency as part of a political union, and Europe has worked towards
political and economic integration for over 50 years before the birth of a
single European currency in 2001. [xxxi]
Asian finance ministers took another step toward creating an Asian monetary fund
at the annual meeting of the Asian Development Bank in Istanbul in the first
week of May 2005. It is a kind of European-style financial union that proponents
of closer cooperation in Asia are striving for. However, the gulf that Asia
needs to bridge before establishing anything like a European-style financial
union is dauntingly wide.
Common wisdom has it that Asia is dreaming if it thinks economies as diverse and
as far-flung as China, Japan, South Korea, the countries of the Association of
South East Asian Nations and India can emulate Europe. For one thing, Europe has
settled the question of hegemony; Asia has not. "There is no hegemony in
Europe," argues Norbert Walter, chief economist for Deutsche Bank. "There are
three in Asia: China, Japan and India."
Yet the move toward common financial arrangements is a confidence-building
mechanism among Asia's rising powers. Haruhiko Kuroda's election in February
2005 to head the ADB has lent momentum to economic integration in Asia. Laying
down a key marker for his tenure, Kuroda, formerly an influential official in
Tokyo, has set up a new department of regional integration, which will be headed
by a University of Tokyo economist, Masahiro Kawai.
Kawai points out that trade and investment among the Asean states, China and
Japan is leading the way and in trade terms the region is actually coming
together at a more rapid rate than Europe ever experienced. At the Istanbul
meeting, finance ministers from 13 Asian nations agreed to enhance a modest
mechanism that allows countries to swap their foreign reserves to ease liquidity
problems on a bilateral basis first set up in the Thai city of Chiang Mai in
The idea is to transform this bilateral arrangement into a single multilateral
process by increasing the size of the swaps and developing a surveillance
mechanism similar to that currently applied by the International Monetary Fund.
Kawai has argued that this regional approach fills a gap left open by the IMF,
which is country-focused. According to Kawai, the Asian Financial Crisis in 1997
told us that this country-focused approach doesn't work because of contagion.
The regional approach is important, and the IMF has not been strong on that.
The first attempt by Japan in 1997 to set up a multilateral fund in Asia met
fierce resistance from the United States and was hurriedly shelved. But in
Istanbul, Japan's finance minister, Sadakazu Tanigaki, gave a ringing
endorsement of moves toward an Asian Monetary Fund, saying that Japan was
"committed to promoting cooperation for the further prosperity of the region."
Of course, this isn't all about safeguarding financial stability in Asia. Japan
is in a hurry to cement its role as a pivot of these financial mechanisms before
China becomes too dominant - and perhaps before the yen is overshadowed by the
yuan. China is quietly supportive because Beijing sees itself as inheriting an
Asian financial system sealed off from too much outside scrutiny. There are
shades too of the kind of Asian hubris evident before the Asian financial
But many financial experts working on integration are wary of moving too fast.
"Asia is not like Europe," argues Jin Liqun, a former vice finance minister of
China who is now an ADB vice president. "We don't have the social and political
homogeneity." If indeed these moves toward integration are more about hegemony
than homogeny then it would be prudent for less powerful Asian nations to ensure
that they are not being lured into a greater China or greater Japan.
Deeper regional integration is necessary. It requires various kinds of regional
cooperation arrangements, areas and methods of cooperation, institutional
arrangements to facilitate cooperation like Asian Development Bank, Central Asia
Regional Economic Cooperation (CAREC), Asia Pacific Economic Cooperation (APEC),
South Asian Association for Regional Cooperation (SAARC), bilateral and regional
trade arrangements, relationship of these to WTO etc. Institutions like ADB can
play a significant role in training and preparing the Asian developing countries
to understand and actively participate in the WTO negotiations.
Economic cooperation in Asia has so far been limited mainly to the bilateral or
sub-regional levels and in the areas of trade and investment, money and finance,
and infrastructure. More recently, however, the geographic scope of agreements
has started to expand across the different sub-regions, providing initial signs
of cooperation and integration in Asia as a whole. [xxxiii]
Over the past decade in Asia, a growing awareness of the interdependence among
countries in the region and of the importance of regional cooperation in
managing the challenges of globalization has led to important steps to enhance
regional economic cooperation initiatives. Relatively slow progress with
multilateral initiatives and the proliferation of regional blocs in other parts
of the world have provided additional impetus to greater cooperation within
Asia. There is a realization that open regionalism can contribute substantially
to enhanced productivity and economic growth, and to poverty reduction, within
"It becomes imperative for India to forge ahead in its ties with Asean so that
the adverse impact or trade diversion resulting by the creation of NAFTA and the
EU can be combated by enhancing growth within the Asian region."
The implication is that we must create an India-China-Asean bloc to challenge
the high consumption of the US-EU-Japan group by shifting terms of trade in our
favour by cartelization just as OPEC has done successfully in West Asia.
‘India is ready to play an ‘active’ role in promoting Asian economic integration
and is keen to co-operate with China in achieving the goal. India’s approach
towards Asian integration and its relations with the rest of the continent are
increasingly an important element of Indian foreign policy. It was India which
first propagated the idea and concept of an ‘Asian economic community’ in
September 2003. Asian economies, especially India and China, seem posed to
provide the thrust necessary for continued economic growth in the 21st century.
“India and China are two of the most important contributors to the political and
economic dynamics of this continent, as also of the world. They should join
hands towards these goals”. [xxxv]
In a Message to some Chinese friends, Tagore had said: "Age after age in Asia,
great dreamers have made the world sweet with the showers of their love. Asia is
again waiting for such dreamers to come and carry on the work, not of fighting,
not of profit-making, but of establishing bonds of spiritual relationship. The
time is at hand when we shall once again be proud to belong to a continent that
produces the Light that radiates through the storm clouds of troubles and
illuminates the path of Life." The first Prime Minister of India, Jawaharlal
Nehru, while speaking to Mr. Paul Feng of the Central News Agency, had said on
January 20, 1946, "If China and India hold together, the future of Asia is
assured." This holding together need not be confined to diplomacy and trade; it
can, by all means, be a psychological force that can work wonders in the realms
of creativity in Asia and in the world. [xxxvi]
Gamal Nkrumah, “Asia is one”, Al-Ahram Weekly 3-9 August 2000, Issue No.
493, weekly.ahram.org.eg/2000/493/in1.htm. Manoj Das in an article in the Hindu,
January 7, 2001 makes a case for a voluntary compulsion to get to know the
literature of other Asian countries thereby strengthening the Asian identity.
Supachai Panitchpakdi’s address to Asian Business Leaders in Bangkok on 14
June 2005, “The WTO at Ten: What is at Stake for Asia ?
South Asia Watch on Trade, Economics and Environment (www.sawtee.org). Its
objective is to promote partnership for capacity building in the context of
liberalization and globalization. It is a regional network operating from Kathmandu.
Supachai Panitchpakdi’s address in Marrakech on 9 June 2004, “Ten Years
after Marrakech: the WTO and Developing Countries”.
WTO NEWS: Speeches — DG PASCAL LAMY, NGO Roundtable Forum: the WTO's Sixth
Ministerial Conference in Hong Kong,16 October 2005,University of Hong Kong,
Rayson Huang Theatre
Paul Donahue, “This is What Democracy Looks Like - the WTO Protests in
Seattle”, The Maine Woods, Vol. 4, No. 1, 2000.
The Fourth WTO Ministerial Meeting (9-13
November 2001, Doha,Qatar) A CIDSE Assessment.
www.un-ngls.org/documents/text/go.between/gb101.htm : UN No-governmental
Liaison Service, NO 101 - December 2003-January 2004
WTO July 2004 Package of Framework Agreements - Global Issues,
Declaration of the "Regional Conference on WTO, Development and
Migration: Building Migrant and People's Solidarity in Challenging Neo-liberal
Development and WTO" 17-19 July 2005 in Hong Kong.
Pradeep S Mehta and Pranav Kumar, “WTO in 2006: Looking Back to Move
Jon Barnes, “ Next Steps for the WTO” 23, January 2006,
David Kootnikoff, “Hong Kong releases 11 out of 14 WTO Protestors”, Ohmy
News, International World, January 12, 2006,
South Asia Watch on Trade, Economics and Environment organized the
consultation in Kathmandu on 19 September 2005.
www.pambazuka.org/index. Pambazuka News : Issue 159.
“WTO July 2004 Package of Framework Agreements - Global Issues”,
Global Policy Forum,
Hindustan Times, “Indian Farmers losing $1.1 billion to Rich Countries”,
September 21, 2004.
“Farm Subsidies that Starve the World” – Global Policy Forum
www.wto.org/spanish/news_s/sppl_s/sppl09_s.htm, Pascal Lamy’s speech in
Hong Kong – NGO Roundtable Forum, 16 October 2005.
Murphy Sophia, “Will the Doha Round Play a Role in Ending Global
Poverty?”, Institute for Trade and Agriculture, Minneapolis.
Pascal Lamy’s Speech at NGO Roundtable Forum.
Bharat Jhujhunwalla, Singapore FTA: Against Asian unity?, Business Line,
August 18, 2005
Michael Vatikiotis, “Single Asian Currency, Key to Stability”,
International Herald Tribune, May 13, 2005
Iran Daily, May 16 2006, p.7, www.iran-daily.com ;
A high-level conference, organized at the Asian Development Bank in
July 2004 discussed this topic.
Business Line, Aug.18, 2005.
Inaugural speech of the Indian Funance Minister, P. Chidembaram at the
third ‘Made in India’ show organized by the Confederation of Indian Industry (CII)
in Shanghai, Oct. 17 2005.
Das Manoj, “Forging an Asian Identity”, the Hindu, January 7, 2001,
(Professor Tan Yun-shan and Cultural Relations between India and China by V. G.
Nair, Madras, 1958).