Collapse of WTO talks likely to trigger more FTAs

Kyodo | 31 July 2008

Collapse of WTO talks likely to trigger more FTAs

TOKYO, July 31 (Kyodo) — With a free trade deal under the World Trade Organization now appearing unlikely to be struck in the foreseeable future, a number of countries are expected to gear up for further enhancing free trade agreements on a bilateral or regional basis to expand their overseas markets, analysts said Wednesday.

Key free trade talks under the WTO collapsed Tuesday as the United States and emerging economies — notably China and India — clashed over politically delicate farm issues at the last minute.

Since the Doha Round trade talks missed deadline after deadline following their launch in the Qatari capital in November 2001 due mainly to a rift between developed and developing economies in the agriculture and industrial sectors, many countries have already shifted toward placing priority on expanding FTA networks with promising overseas economies.

In Asia, China and South Korea have been spearheading expanding FTA networks, given that the WTO talks had been long stalled.

In a struggle to catch up with those economies, Tokyo clinched FTAs with eight countries and the 10-member Association of Southeast Asian Nations, and those with five countries including Malaysia, Mexico and Singapore have already taken effect.

Japan is also in talks with several other economies over FTAs, including Australia, India, the Gulf Cooperation Council states and Switzerland.

According to the Foreign Ministry, the number of FTAs reported to the WTO rose to 205 as of May, compared with 46 in 1990, underpinning the global trend of opting for bilateral or regional free trade pacts rather than a scheme under the Geneva-based body.

Some reacted dispassionately to the breakdown of the Doha Round talks.

’’Economies in East Asia are making headway in freeing up the industrial sector with substantially lowered tariffs,’’ a professor of economics in Tokyo said.

’’The WTO is no longer spearheading trade liberalization in the region.’’

But promoting FTAs does not necessarily promise the same environments for trade powers around the world that the WTO has sought in the Doha Round as special treatment to protect poor countries may not be covered by FTAs, analysts said.

Restrictions on export controls by some food exporters may also constitute fallout from the collapse at the Doha Round talks.

Some countries such as Japan had proposed curbing such export controls by food exporters under the WTO mechanism as part of efforts to secure sufficient food supply amid growing fears of a global food crisis.

With the failure of the Doha Round talks, however, prospects for implementing restrictions on food-exporting countries have become uncertain, observers said. (Kyodo)

source: Mcot