STRATEGIC ISSUES: GLOBAL TRADE, IS WTO DEAD? (ANALYSIS)

Kuala Lumpur, January 27- As the larger countries or groups within WTO/GAAT have increased the pressure they put on other nations, those that have grown significantly in the past decade or so (at least as trading countries) have not seen a similar increase in their influence. As WTO grinds slowly, commerce moves quickly. But equally importantly, so does national politics. Where ten years ago, there were warnings that commerce risked short-termism due to excessive focus on shareholder value, so politics has become a short-term game.

When a WTO "Round" can take more than two terms of a government, then there is little incentive for an incumbent government to start negotiations that will provide long-term benefit at the expense of short term bad press. But put a couple of senior ministers in a room and they can thrash out a broad framework for a bi-lateral deal in a couple of hours; the details can be sorted out by mandarins in a few months.

WTO should, by now, have had its nose bloodied by south-south groups such as the UN's Special Unit for South-South Cooperation (what? I hear you cry -it's been around since 1978 and a fat lot of use it's been), the Group of 77 (big yawn: lots of pompous statements, stuff all material achievements- see the conclusion of the São Paulo Round which appears to be little more than a statement of hopes and good intentions), In South (talking shop, useful for research, Non-Aligned Movement (potentially the most valuable of them all, but seems to have gone into hibernation for almost a decade and the global, public, presence of which a group of (seemingly) radical left-wing activists (or so their language would lead one to conclude) have tried to hijack with a website at www.nonaligned.org):NAM's own website doesn't even hit the front page of Google but there are several "country sites." Its credibility is stretched by the dominance of far-left socialists and communists in its leadership: according to Wikipedia (not the most reliable of sources, we know) the Secretaries General from 1961 onwards have been primarily drawn from the left-wing political parties (not, note, necessarily socialist or communist countries) of member states.

In the absence of any effective alternative (including, at present, ASEAN and its expanded sub groups), there is little or no alternative to the growth of bilateral agreements or what might be termed "dumb-bell agreements" i.e. small groups formed to negotiate between groups with the aim of mini-trade zones at either end of what is in effect a bilateral agreement between two such zones. It is this form of agreement that may become more common in the near future but their usefulness will fall away once an agreement with one group hampers the formation of an agreement with another.

Such agreements might have an expiry date of, perhaps, five years enabling the mini-groups to re-align themselves with members of other similar groups, providing a fluid membership and, also, a fluid commercial environment. Long term agreements are probably in the interests of the (formerly?) industrialised countries and not in the interests of those who are becoming industrialised or providing what amounts to outsourced agriculture.

As such, the concept of WTO is outmoded but not necessarily obsolete.

Where WTO can score is in facilitating the "dumb-bell" form of agreements, providing a forum for those small, regional groups to be put together quickly and form agreements with other such groups using, ideally, broadly standard templates.

But it won't happen like that because the WTO is driven by the strangely synergistic but contradictory demands for cheap imports but protection of domestic jobs.

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