WHY DID MIKE MOORE ARRIVE IN TBILISI

By. Sophiko Sichinava

In spite of numerous contradictory opinions, Georgia continues to integrate into the international Unions. Three years have passed since Georgia became a member of WTO.

However, very often a problem is caused not only by implementation of undertaken obligations and use of acquired ones after joining WTO, but also by membership fees of this or that international organisation. Yet, our country does not try to be some formal inert member: it is ready to learn much in order to become an efficient participator of the process and to receive results from the membership and active co-operation within the frames of this organisation.
Conference of trade ministers that took place on May 21-22 in Tbilisi considered future capabilities and perspectives of integration of Asian and Caucasian countries into the Multilateral Trading System.
The conference of trade ministers was held by WTO in Tbilisi for the first time. The conference was opened by the President of Georgia and Mike Moore, general secretary of WTO.
WTO has never held such a conference in this region. Our merit in this direction is not too great. More attention should be paid to the region in view of its important location. The conference will promote integration of the region into the Multilateral Trading System. The conference has two main purposes: 1 ? to provide assistance to member-countries of WTO; 2 ? to assist countries in defining priorities of participation in the current negotiation process and preparation of this process. Today, everyone needs direct foreign investments. Many countries admit that confidence and trade regime stability of the country help to attract direct foreign investments. Membership in WTO is an important way that gives countries the possibility of confirming their obligations with respect to political stability, prognosis and full-valued administration. By doing so, they will show local and foreign potential investors that the country is ready to observe the rules and agreements”, – said Mike Moore (general secretary of WTO).
As it was mentioned in the conference, it was necessary to create work conditions, enhance trade performance and effective participation in the rule making with the purpose of integration of Asian and CIS countries into the Multilateral Trade System. At the same time, effective and sustainable trade policy frameworks need to be established encompassing national export development strategies. Additionally, strategies focusing on enhancing intra-regional trade can help lower transaction costs and provide export production and marketing experience in familiar regional markets before an entry into more competitive international markets can be envisaged.
To address these needs, the State Secretariat of Economic Co-operation of the government of Switzerland has mandated the International Trade Centre to develop a trade-related technical assistance programme for these countries.
There are six issues about technical assistance in the sphere of International Trade:
1. Inter-regional trade development in Central Asia;
2. Planning for effective national exports and achieving it, including for e-facilitated trade;
3. Capacity building of SMEs regarding the Multilateral Trading System (MTS) – including the development of Trade Support Institutions (TSI);
4. Private and public sector procurement;
5. Capacity building in quality management; and
6. Trade information.
A critical statement was made by a head of Islamic Republic of Iran, H.E. Mohammad Shariatmadari. He said WTO should not only encompass all countries regardless of their share in the world trade, but it should give them the chance to participate in the Organisation’s decision-making and surveillance process of the system. Currently, 52 countries are not WTO members. For the 16 countries who have joined WTO since 1995, the average negotiation process lasted 7 years. As noted earlier, the application of the Islamic Republic of Iran was placed on the agenda after 5 years, but since then, in 7 General Council Meetings, the decision on Iran’s accession was not agreed by the United States without any logical reasons. Whereas according to the provision of Article 12 of the WTO Agreement, all countries are entitled to accession.
In order not to mar the universality of the Organisation, it is necessary for the member countries that oppose the accession of non-members to give all reasons for their objection. Furthermore, political considerations must not be entertained. The same approach holds true with respect to the negotiation process. All member countries of WTO benefited from the technical assistance of this organisation. This organisation must provide assistance to its future members. As for technical assistance, in this direction priorities must contain creation of new perspectives in trade policy, information technical capabilities and means as well as creation and development of global information networks. Besides, technical assistance to acceding countries must be tuned to the specific needs of each and every acceding country. The Islamic Republic of Iran’s priorities in respect of technical assistance focus on training of qualified and highly competent trade experts and negotiators. Therefore, specialised training courses and workshops as well as thematic seminars in such areas as trade in services, trade-related aspects of intellectual property rights, and legal issues can supplement capacity building efforts. In 1995, shortly after the establishment of WTO, the Islamic Republic of Iran, then a GATT observer, was among the first countries to apply for observer status in WTO, but its application did not appear on the agenda. Whereas, at least 8 countries who had applied later than Iran, were admitted as observers. This is a fact that once again necessitates a revision in the concept of universality” so that to remove any shortcomings in this regard.
Strange as it may seem, there are no opponents of Russia’s accession into WTO. Debates mostly concern dates and terms of accession. Even people who are deemed as opponents of this step say there is no need to hurry, that Russia should live in isolation for 10-15 years with the purpose of increasing competitiveness of Russian economy and Russian goods, and it should open markets only after this period is passed.
It is obvious that isolated Russian economy is doomed for stagnation. The economic growth rate should be higher than an average index in the world in order to be able to overcome the gap between industrially developed countries and level of Russian economic development. Besides, it is necessary to constantly improve the quality of Russian goods and services.
Problem in dates
The problem of accession lies in the speed and conditions of transitional period. Russia set very hard terms of accession such as 13 billion dollars for the support of agricultural sector whereas not more than a billion dollar has ever been assigned from the budget of Russia. Russian party demands excessive transitional measures. We hope that real figures will become known by June as soon as working party’s report about accession into WTO is prepared,.
There are exceptions in WTO, namely all European countries subsidise agricultural sector. There are also separate agreements not covered by WTO norms, for example, steel and style agreements. Thus, there are no clear examples of globalisation, and each country tries to support a home producer.
Priorities
However, the trouble of Russia is that we ourselves have not developed priorities before the beginning of negotiations? which branches to support and for what period of time. In negotiating with WTO we try to determine these priorities step by step and decide upon the necessity to support some branches or replace them with foreign export goods.
Nowadays, the idea of acceding to WTO by orienting on results rather than by a particular date, is becoming but more and more popular. We should try to give sensitive branches, as f.e., agriculture, the perspective of transformation into competitive ones. We are obliged to realise such programmes. In this period we must try to accelerate reforms of financial sector and create a favourable investment climate. If we resort to hothouse transition conditions, it will lead to nothing else but conservation and backwardness. Accession into WTO may serve as a stimulus for reforms and development of Russian economy.
The process of adaptation to WTO rules will be a poignant one. In some branches unemployment may increase by 1-20%.
Being non-member of the organization, Russia loses up to 5 billion dollars from insufficiently used export capabilities. Non-liberalized energy market leads to so great losses and incomplete investment that fears of complete collapse of infrastructure of Russia’s energy systems can become real in case measures are not taken in time.
Russia’s position is to immediately start thinking about tightening of rules as the current ones are not always exact and understandable. It mostly concerns expansion of operating custom unions. The European Commonwealth said some other countries would join the customs union in the nearest future (Baltic and Central East countries).
Maxim Medvekov (vice minister of economic development and trade of Russia). We face an interesting situation. Trade barriers between countries acceding to trade unions can really grow. After the adoption of anti-dumping procedure and accession of Eastern European countries to EC, procedures that by this time will be in force in Russia will concurrently come in force in the territory of allied countries. If Hungarian and Lithuanian industries have not stood in the way of Russian production till now, why should these countries be isolated from these markets only because they joined customs unions? We can draw a number of examples. One of our suppositions is that rules about expansion of the existing customs unions should become harder. The principle of avoiding deterioration of trade with third world countries should really exist.”.
The Russian party raised one problem in the conference concerning the so-called “special” case of CIS. The particularity of CIS free zone is that it was formed in the historical territory of the USSR where there were no barriers in transportation of goods.
“We did not issue from the principle of reducing barriers like EC and NAFTA, but we spoke about their non-introduction. After the countries of the USSR gained independence, a special status Quo was preserved between the countries. This case was not envisaged within the frames of WTO. After the accession of CIS countries to WTO, this aspect should be considered from another point of view. Yet we do not deny the fact that our Free Trade Agreement should comply with the norms of free trade”, – said Medvekov.
Mike Moore said positive tendencies were observed in view of Russia’s accession toWTO. The progress has become more obvious for the last 12 months than for the 12 years in general. The bill has already been submitted to the Russia’s Duma for consideration. Yet this procedure will take too much time. Important negotiations are planned in June and July. I will be very sorry if Russia does not accede to WTO”, – said Mike Moore.
Despite the fact that the Conference had a special agenda, Mike Moore still was unable to avoid talks about the decision of the American government to increase customs charges for steel import. “I can take a number of decisions with respect to these issues, but I consider it irrelevant to speak on this subject in this case. I cannot say anything else”, – said Mike Moore. He then added that regionalism is well compatible with globalisation. He himself was a representative of a small country (New Zealand), and he thinks that a real patriot should be an internationalist.