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GAMBIA-L  January 2004

GAMBIA-L January 2004

Subject:

*** WTO proposals seen as new burden

From:

uga479 <[log in to unmask]>

Reply-To:

The Gambia and related-issues mailing list <[log in to unmask]>

Date:

Mon, 26 Jan 2004 12:49:47 +0100

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (165 lines)

----- Original Message -----
From: "Andy Mensah" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Monday, January 26, 2004 12:14 PM
Subject: [unioNews] WTO proposals seen as new burden


Jan 26 2004 07:28:20:000AM  Business Day 1st Edition
<H3>WTO proposals seen as new burden</H3>
Quintis Makgati
<B><i>MOST of today's wealthiest nations have long used a variety of
policies and regulations to shelter their growing domestic industries
from ownership, control or undue competition from foreign-owned
business interests.</i></B>

Today, those same countries are calling for the World Trade
Organisation (WTO) to ban such measures a ban which, if enacted,
would deny developing countries the right to use the same measures to
protect and nurture their newly forming companies.

At times, the US has given tax breaks to local industry, forbidden
foreign control of banking, restricted foreign ownership of land and
allocated mining rights to US citizens only.

Japan has restricted foreign ownership in key manufacturing sectors.
The UK, France and Germany have all sought to control foreign
participation in their economies at one time or another.

Large northern-based corporations, which under the new rules would
benefit from open access to international markets, are staunch
supporters of change. However, the new proposals face strong
opposition from developing countries.

The result has been a stand-off in the WTO. Disagreements on the four
issues trade and investment, trade and competition policy,
transparency in government procurement, and trade facilitation
contributed to the collapse of last year's WTO meeting in Cancun,
Mexico.

The four issues, pushed mainly by the European Union (EU) and Japan,
were first proposed during a WTO ministerial conference in Singapore
in 1996. Developing nations have still not agreed to negotiate them.
They do not feel able to assume any further obligations they would
face if the proposals were adopted, and are concerned about how the
steps would affect their development.

Of far higher priority, they say, is to resolve remaining issues of
the Uruguay negotiations, which ended in 1994.

Two of the proposals, which deal with investment and competition,
would oblige all governments to give foreign investors the same
rights as domestic companies.

At present, countries can grant preferences to domestic firms by, for
example, giving them access to domestic distribution channels while
denying foreign firms the same rights. Under the new rules,
governments would need to allow overseas companies to compete equally
with domestic firms to provide goods and services to the government.

This would remove a powerful tool which governments have
traditionally used to back growing domestic firms.

The EU is also pushing for an agreement that would oblige WTO members
to enact, in their domestic competition law, a ban on so-called
hardcore cartels. The rules would prevent such cartels from engaging
in "unfair" trade practices, such as price-fixing, which many believe
are designed to remove competitors from the marketplace.

Some, however, challenge the assumption that cartels adversely affect
development.

Cecilia Oh, of the Third World Network, based in Ghana, points out
that some of the most successful Asian nations incorporated the
formation of cartels in their industrialisation policies. She says
there is no shared definition of a "hardcore" cartel.

Advocates argue a single global agreement on investment would be
better than the myriad accords that regulate foreign firms. Critics,
however, believe the proposals would prevent governments from
regulating how foreign companies operate in their countries. In the
past, governments have often required those firms to purchase local
materials or hire indigenous labour.

Critics also point to the dangers of governments signing away their
power to control domestic policy.

The new proposals could extend some of the provisions of the WTO's
1981 voluntary agreement on government procurement. In that case, all
WTO members would be compelled to publicly announce bids for supplies
and purchases, to let domestic and foreign com panies vie equally to
provide them.

Developing countries fear they would have to establish new
bureaucratic procedures and enact new legislation. Both would be
burdensome and costly. Also, without state intervention, most
domestic suppliers would find it impossible to outbid larger
multinational companies to provide government services.

The proposed trade facilitation agreement could lower customs duties
and reduce border delays by simplifying import, export and customs
procedures. In some countries, the cost of complying with customs
formalities is even higher than duties paid on a product.

Many developing nations broadly back the aims of the agreement, but
are unable to accept new legal commitments. They say they simply lack
the resources to put new procedures in place or to provide the
necessary training.

Egyptian trade minister Youssef Boutros-Ghali says that though some
countries see the benefits of agreements on transparency in
government procurement, they "have to be drafted so as to take into
account the capacities, constraints and needs of developing
countries".

<i>UN Africa Recovery (www.africarecovery.org).</i>


Copyright  2004 BDFM Publishers (Pty) Ltd




lllll
QUOTATION:

"All of us may not live to see the higher accomplishments of an African
empire, so strong and powerful as to compel the respect of mankind, but we
in our lifetime can so work and act as to make the dream a possibility
within another generation"
-<html><A HREF="http://members.aol.com/GhanaUnion/afrohero.html">Ancestor
Marcus Mosiah Garvey <i>(1887 - 1940)</i></A></html>

llllllllll
 *  //\\//\\ unioNews Newsgroup //\\//\\   *
 * http://members.aol.com/GhanaUnion *
 *          We're One People         *
 *          Join the Chorus          *
 -    African Union Shall Succeed    -
 =====================================
A luta Continua!

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