South Asia Watch on Trade, Economics & Environment (SAWTEE)

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Make Trade Fair
Published: The Kathmandu Post, 30 September 2005
By: Shivendra Thapa

Though the hypothetical disposition of globalisation exemplifies a close-knit world community trading freely and living in prosperity without market barriers, the reality of the situation is slightly more onerous and noteworthy. World trade has intrinsically created global economic, social and political interdependence. This interdependence can be good for world trade if the focus is on well-managed trade that adheres to the reduction of prevalent disparities that exist in the global trading system. Increasing disparity between the potential of world trade and resultant outcomes is driving millions towards destitution. The onus of the world trade system lies in working towards fairer world trade that seeks to strike a balance between large investments and those who reap the benefits from it. In an era of economic and political interdependence, the increasing rift between the haves and the have-nots is not beneficial for anyone. In a globalised world, human lives have been irreversibly adjoined and our prosperity lies in making this system work for the benefit of all those who are involved in it.

Today, two opposing schools of thought exist in the debate about world trade. The 'Globaphiles' insist that globalisation is working for the poor and their view inherently suggests that opening up markets is a panacea for the reduction and eventual elimination of world poverty. On the flip side, 'Globaphobes' argue that trade is bad for the poor. One perspective represents chronic pessimism while the other, fundamentalist optimism. They do not represent a balanced view of trade. Such imbalanced views do not provide solutions. Rather, they become a means to inflame further disagreements and division within the global community. A balanced, middle way approach to the issues of trade and its economic implications is a more pragmatic step towards a representative outcome. In the Nepalese context, we cannot afford to align our trade policies to such extreme diatribe.

With Nepal's accession to the World Trade Organisation (WTO), the issues regarding trade have become more relevant than ever. The WTO is a negotiating forum for member countries to resolve their trade disputes. It is the only organisation dealing with the global rules of trade amongst nations. Since its inception in 1 January 1995, WTO has reiterated its commitment in providing LDCs (least developed countries) the opportunities to enhance their trade capabilities as well as support trade by providing market access for their products by downgrading or eliminating trade barriers. A recent report titled 'Future of the WTO' was published in January 2005 to analyse the role and direction of the WTO in the future. In due recognition to the plight of LDCs like Nepal, the report attempts to present a moral, pragmatic case to improve their trade status. WTO Director-General Pascal Lamy, in a speech at the International Parliamentary Union in Geneva on 22 September 2005 has also said, "we have a common responsibility to ensure that the trade engine is switched on for everyone, that no one is left behind". Along with other LDCs and developing countries, Nepal must seek answers and ask questions of concern. What have been the significant gains for LDCs and developing countries since the conception of these agendas in the WTO? Have we seen adequate implementation of desired policies in the last decade? We must ask these questions and also seek answers for ourselves if we are to gauge the impact and extent of trade negotiations from our perspective. As long as questions regarding technological assistance, development of trade infrastructure, market access and trade barriers remain unanswered or unclear, Nepal must continue to garner support for its trade related problems. The upcoming sixth WTO Ministerial Conference to be held in Hong Kong from 13th December 2005 is an opportunity for Nepal to accentuate a common trade agenda with the help of other LDCs and developing countries.

Nepal must also be clear on the kind of trade assistance it requires. Importation of financial and technical assistance must be based on enhancing the productive capacity of domestic firms by building strong domestic linkages with local and rural industries that will enrich infrastructure and support long term economic growth. Economic and political interdependence is a reality today and it implies that the interests of developed, developing and least developed countries are also entwined. Fair and free flowing international trade has the ability to align countries in a quid pro quo status.

Trade can be instrumental in opening up opportunities, reducing poverty and sustaining a dynamic economic growth provided that it is well managed and without bias. For such an environment to exist, international regulatory bodies such as the WTO, the World Bank and the IMF amongst others, must be transparent, accountable, democratic and ethical. At the same time, trade can be explicitly detrimental if these institutions function for the minority while claiming to represent the majority. In a globalised world, trade is inevitable and irreversible but responsible communities and institutions must oversee that trade is also fair.

While advocating for a fair redistribution of economic welfare in international forums, countries must also be adept in doing the same at home. For us, this is very contextual if we are to follow a balanced perspective regarding our trade concerns at regional or international levels. Ethically, we can only voice our concerns if our domestic policies follow the transparency and accountability we so vehemently seek from international trade at regional and international forums.

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