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Asia-Pacific businesses losing interest in Doha

Business World (Manila) | October 19, 2009

Asia-Pacific businesses losing interest in Doha


BUSINESSES are becoming less interested in the World Trade Organization’s (WTO) attempts to forge a global deal as long-standing talks have yet to yield results, a private sector group affiliated with the Asia-Pacific Economic Cooperation (APEC) warned late last week.

Regional trade agreements such as the Free Trade Area of the Asia-Pacific (FTAAP), the APEC Business Advisory Council (ABAC) said, are thus becoming attractive again. The group added, however, that it continues to push for "a rapid conclusion of the Doha [round]."

ABAC officials met with WTO Director-General Pascal Lamy in Geneva last week.

"While business generally supports the multilateral process and the WTO... skepticism has been steadily rising because of the widening gap between rhetoric and action," the ABAC said in a statement issued on Thursday.

Efforts to finalize the Doha round of trade talks are again gaining pace after discussions hit a wall last year. Technical work on templates and reviews of offers on the table are being completed before formal negotiations are resumed.

"Conversely, support has been growing for the establishment of a Free Trade Area of the Asia-Pacific (FTAAP)," the ABAC said, referring to a deal first proposed in 2006 that would cover APEC’s 21 members and harmonize various trade pacts in the region.

The Philippine arm of the business group agreed, saying the country stands to gain from the FTAAP which will grant access to the markets of "big economies like the US, China and Japan."

"The truthful answer is that [our interest in Doha] is indeed waning due to the lack of forward movement. The negotiations were supposed to have been concluded within a period of three years but we are now on the eighth year," ABAC Philippines Chairman Roberto R. Romulo said in an e-mail.

Regional deals, although "not the first best option," are therefore necessary especially as the large number of members needed to agree on the Doha round threatens an early conclusion, he said.

"We are interested in a possible FTAAP as a long-term prospect... The APEC economies account for approximately 40% of the world’s population, 54% of world GDP (gross domestic product) and 44% of world trade. Certainly, that is a huge market," Mr. Romulo said.

He stressed, however, that development gaps among APEC members must be recognized by the proposed deal.

"[And] the FTAAP is not a backup or an insurance policy in case the Doha round negotiations fail. In fact, both of them could coexist," Mr. Romulo added.

An official of another business group, meanwhile, said the FTAAP’s market may be too broad to be of interest to the Philippines.

"But yes, regional free trade agreements will have to be done, especially within the Association of Southeast Asian Nations," said Donald G. Dee, Philippine Chamber of Commerce and Industry chairman emeritus, on the sidelines of a press briefing on Friday.

The ABAC went on to advise APEC leaders to declare at a November meeting in Singapore their commitment to complete WTO talks by 2010.

Mr. Romulo, for his part, said the Philippine business delegation "will specifically raise the issue of international labor mobility during the ABAC Dialogue with APEC Leaders in November."

APEC has for its members Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

 source: Business World