August 14, 2003—Some 100 participants from six nations on two continents connected via a Bank-sponsored videoconference last week to discuss how trade issues affect developing countries and the global economy. Government officials, academics, journalists, and business leaders from Cambodia, Mongolia, South Korea, Sri Lanka, and Vietnam participated in the event. The panel in Washington included Richard Newfarmer, Economic Advisor for the World Bank’s Economic Prospects Group, John S. Wilson, Lead Economist in the World Bank’s Transport Unit, and Timothy Carrington, Senior Public Information Officer at World Bank Institute (WBI), as moderator. Sok Siphana, Cambodia’s Secretary of State for Commerce, also joined the panel from his country. (Click here for B-Span Broadcast)

Two crucial points arose from the discussion. Firstly, the participants agreed that trade can be a powerful engine for development, but only if poor nations participate fully in negotiating it. There was also general agreement around the argument that developed countries must find a way to reduce tariffs and make trade more equitable, but developing countries must also do their part by creating the right conditions at home.

Opening the videoconference, Newfarmer stressed the importance of the ongoing Doha Round negotiations, stating that they offered the possibility of removing barriers and inequities currently operating in the in the global trading system, that impede development and poverty reduction. He emphasized the economic benefits to be reaped from developed and developing countries alike from the negotiations, noting that an upcoming World Bank report revealed that a successful Doha round would generate an estimated $500 billion in additional income in 2015, $300 billion of which would flow to developing countries.

In order to achieve a successful negotiation round, Newfarmer said that developing countries needed to use the multilateral trading system to promote greater integration amongst themselves and with the global economy. The responsibility of the industrialized countries, resided in removing trade barriers to developing countries with regards to agriculture, non-farm trade, such as in manufactured products, and patented drugs.

Siphana outlined Cambodia’s experiment in "mainstreaming" trade. The government incorporated trade into its overall strategy, which maximizes the links between trade and production, investment, labor, and environment. The holistic approach focused on three priorities: market access, capacity building, and aid. The mainstreaming policy succeeded thanks to its operational mechanism, which demanded strict collaboration between the public and private sectors and civil society.

Wilson said trade could expand by about $377 billion just by raising capacity among countries that are below average in trade-facilitating infrastructure, such as customs, regulatory systems, port efficiency, and services. Taking into account terrorism and its impact on the global economy means that border security is now a critical factor.

Market access, anti-dumping concerns

Questions from Mongolia and Sri Lanka reflected a common concern with market access, especially for small rural producers. They asked whether subsidies to farmers in rich countries may be reduced, and whether assistance to farmers in poor countries may be considered. They also asked whether there will be any negotiations on preferential treatment for countries such as Mongolia—a small economy sandwiched between two giants, China and Russia.

A participant from Vietnam wondered whether Vietnam would be disadvantaged by joining the WTO because of anti-dumping policies in rich countries. The speaker cited the case in which the U.S. filed an anti-dumping suit with the U.S. International Trade Commission over catfish imports from Vietnam. As a result, the ITC imposed duties that hurt Vietnamese exporters, he said.

A participant from Korea wanted to know whether the WTO Cancun ministerial would address opportunities for North Korea’s economy. Siphana pointed out that, based on Cambodia’s experience, a country must first open up before being considered a trading partner. Bilateral agreements between two countries may be a good starting point.

In Sri Lanka, participants questioned the impact of bilateral agreements on multilateral negotiations. Newfarmer said free trade arrangements through bilateral agreements may end up discriminating against excluded countries.

In conclusion, the consensus was that opportunities for both developed and developing countries at the Cancun meeting may be wasted if the issues affecting poor countries are not addressed aggressively and transparently.

Go here for highlights from a previous Global Dialogue discussion on trade and Africa.