Small countries no say on trade pact
The Brunei Times | 1 September 2014
Small countries no say on trade pact
BANDAR SERI BEGAWAN
SMALL countries that tag along with other countries involved in mega-regional agreements will have little control over trade negotiations, according to a report by the World Economic Forum (WEF) Global Agenda Council on Trade and Foreign Direct Investment.
In the report entitled Mega-regional Trade Agreements: Game-Changers or Costly Distractions for the World Trading System?, Uri Dadush, senior associate for the international economics program at the Carnegie Endowment for International Peace, said that smaller countries eager to join mega-regionals like the Trans-Pacific Partnership (TPP) could dock into the agreement but they would not have much say.
“The downside of this approach for a small country is that it will mean being subjected to one of the most lopsided trade negotiation in history,” he said.
Large countries may also be reluctant to open up their trading doors to allow new competition without imposing certain conditions.
Countries like China or Indonesia will not accept the unconditional agreements that come with the adoption of the TPP, he said.
Dadush said that an approach to enter bilateral negotiations with the US would be more sensible as it would cover a “large chunk” of market access under the TPP, the Trans-Atlantic Trade and Investment Partnership (TTIP) and the European Union (EU).
“Such an approach would provide a window to the regulatory reforms and tougher standards both trading powers are aiming for,” he said.
He said it’s unlikely that excluded countries will retreat into trade protectionism or obstruct negotiations just because they were excluded.
The exclusion from important world trade negotiations can be used as fodder by anti-globalisation lobbies.
Dadush said the shift of focus by large trading powers to the mega-regionals will also discourage “inward looking” countries such as India, Brazil, Russia and South Africa, to adopt trade liberalisation. — Leo Kasim
