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Post-Cancun priorities

Hossain Zillur Rahman
AMoNG Cancun's many lessons, one of particular relevance to Bangladesh was that feel-good strategy-making will not take us far in securing the benefits of global trade. The wistful tones in which Bangladesh official circles and their civil society counterparts continue to refer to the draft text and bemoan what might have been belie the true lessons of Cancun. Global trade talks are no civil society seminar and expectations of 'free lunches' are merely that, an exercise in naivete. The gloves came off in Cancun and early signs are that the post-Cancun moment remains an intensely political one. The one resource which we now have to muster above all is political intelligence in forging a game-plan relevant to the unfolding possibilities.
The post-Cancun calendar has not been an idle one. USA has succeeded in weaning away a few of the Latin countries -- Peru, Ecuador, Colombia -- from the G20 plus block of developing countries which had emerged at Cancun. More recently, the African 'cotton' countries have succumbed to behind-the-scenes pressure and the cotton agenda has been withdrawn by the sponsoring countries like Benin. For their part, the G20 plus group has held on in the Cancun aftermath; they have already had a strategic planning meeting of Foreign Ministers in the Argentine capital. other actors have also been active. World Economic Forum (WEF) has held a conclave in Singapore to extol the benefits of globalisation releasing a study to that effect. The expected shift of interest to regional and bilateral trade pacts has also materialised but the lead in this is being taken not only by the developed countries but also by key developing countries. Potentially the most interesting initiative has been the discussion of a giant Asia-wide FTA bringing together ASEAN countries with China, Japan, South Korea and Taiwan. We are likely to hear of many more such discussions; the Bangladesh-india talks are just one example of many. Discussions will not of course automatically lead to actual changes in trade arrangements; these only indi- cate the possibilities to pursue and benefits to each country will be determined by how intelligently and effectively each pursues its national interest.
The WTo process itself, however, is best described as a pause. Signs of active re-engagement on starting the stalled talks are rather scarce. The bureaucratic process is an even sharper indicator of a continuing stalemate: the Director-General has suspended all critical Committee meetings till clearer political directions emerge. The December meeting of delegations is not creating any great expectations. indeed, privately all the signals are that none of the key players are rushing to pick up the pieces from Cancun. EU is officially in a reflective mode. The only thing which is perhaps sputtering on is the blame game. The recently-concluded APEC summit under pressure from developed countries such as USA and Australia has called for re-starting talks on the basis of the Cancun Draft. Predictably this has run into immediate opposition from those who opposed it at Cancun. Hard-headed political realists are betting that the WTo talks are unlikely to pick up momentum until after US presidential elections in 2004 and the formation of a new EU Commission in 2005. indeed, a leaked memo from the Department of Trade and industry of UK makes such a view almost official. The Doha dead-lines are the last thing key players appear to be concerned about.
Yet it would be wrong to conclude that the WTo process is dead. The preceding Uruguay Round exceeded its projected life-time by many years and this did not stop the dynamic growth of global trade. Cancun too in that sense was no end-game. No one can or will walk away from the reality of a globalised economy, neither the developed countries nor the developing countries nor the LDCs. Missed
dead-lines is not the real issue here; finding intelligent and just solutions to the issues which surfaced at Cancun is. What has dawned is the age of hard negotiations and only the determined and the prepared are likely to prevail in this scenario.
Bangladesh will go nowhere in this post-Cancun scenario if it remains hooked on the idea of free lunches or feel-good texts which are bereft of any operational significance. Charity at the WTo table is likely to be in even shorter supply in the future. The immediate challenge for Bangladesh is to leave this 'free lunch and feel-good text' mind-set behind. The faster official circles and their civil society counterparts wake up to this challenge, the better. it may also be wise not to bank too heavily on a resumption of talks on the basis of the Cancun text. This promises to be a key area of political contention as already evident from the APEC declaration and india's response.
Where Bangladesh has really to put its strategic energy is not merely in bureaucratic preparation for the December meeting in Geneva but rather in developing a game-plan which can best tap the unfolding possibilities. The post-Cancun priorities are strategic rather than bureaucratic and a missed dead-line is not the most important thing to worry about.
There are three broad post-Cancun challenges on which Bangladesh needs to be strategically engaged. First is the camp question. Sooner or later, Bangladesh will have to confront the question of its LDC future. LDC leadership remains more of a polite fiction than a substantive bargaining plank. LDC meets -- official as well as civil society -- are fertile grounds for feelgood strategy-making which keep on adding to paper goals and gains bereft of serious operational clout. The irony is also that the occasional largesse that the 'big boys' of the global economy may throw at the LDCs rarely show up
as livelihood gains for the poor of these countries.
How well are Bangladesh's longterm interests served by continuing in the LDC camp as it currently operates? Segments of the elite who are often the real beneficiaries of the 'free lunch' possibilities of the global economy are loath to forsake such opportunities. Time may have come, however, to tackle the issue head on. Commerce Ministry may do well to initiate a vigorous national debate on the issue of Bangladesh's LDC future and the wisdom of aligning with new groupings such as the G20 plus group of developing countries. Polite fictions such as LDC leadership will no longer do. Feelgood demands such as 'movement of natural persons' will also no longer do. Whatever demands are raised must be politically real and operationally significant in the context of the WTo process.
The second strategic priority is about non-WTo initiatives. one of the implicit threats USA, EU and other power players brandished at Cancun
was the switch to regional and bilateral trade pacts. Early fears that this would lead to the demise of WTo may eventually not be borne out. Meanwhile, two can play at this game. Thailand's Prime Minister has called for developing countries too to go on the offensive to explore and exploit the opportunities of regional and bilateral pacts. Not all options have to be pursued specially if it means being on the receiving end of a bad deal. But there is no alternative to switching to an active search mode. And not just active but also intelligent and prepared. Bangladesh has already been active in this area.
The third, and potentially the most important, post-Cancun strategic priority is not trade as such but the growth process itself which makes a robust trade regime possible in the first place. The simple lesson that unless the tradables base is widened, gains from global trade remain limited is a lesson perpetually in need of being learnt. Today's domestic pro-
ducer may be tomorrow's exporter but this real-life insight finds little resonance in policy thinking. Domestic producers and the domestic market in general is the proverbial step-child for the policy-making elite. infrastructural support, enabling policies, administrative backing, credit access, performance recognition -- all are woefully inadequate when it comes to local entrepreneurs, big and small. Policy-makers and elite civil society invest heavily in feelgood demands like 'movement of natural persons' but when it comes to the operationally required action task of skill preparation of the poor for the global market-place, the gaps are all too obvious. This neglect of the domestic producers and the domestic market is the true Achilles' Heel in Bangladesh's attempt to secure the benefits of global trade. A more meaningful WTo future demands policies and actions to regenerate our local economies and reorient education towards the creation of a more skilled work force. The people are ready. The elites -- in the government, in the political hierarchy, in the civil society -- need to respond.
Hossain Zillur Rahman is Executive Chairman, Power and Participation Research Centre (PPRC)