Delivering on Doha - APEC Helps its Members Maximize the Benefits of Global Trade and Reinvigorate Stalled WTO Negotiations

It took fifty years from the Second World War before governments set up the World Trade Organization. Since then the disparate group has wrestled with achieving consent through consensus. In recent years globalization has made that challenge even greater. Violent anti-free trade demonstrators disrupted a WTO meeting in Seattle in 1999. Subsequent negotiations under the WTO launched in Doha, Qatar, in 2001, known as the Doha Development Round, are many months behind schedule.

The Doha Development Agenda was supposed to be completed this year. But talks in the Mexican resort of Cancun broke down last September, mainly over farm subsidies and issues ranging from trade and competition policy to trade facilitation and transparency in government procurement. In the meantime, many WTO members have pushed ahead with their own bilateral and regional free-trade agreements.

Advancing the Doha Development Agenda is a priority for APEC this year. APEC's Economic Leaders believe the Doha Development Agenda offers the potential for real gains for all members. In the "Bangkok Declaration on Partnership for the Future," the group emphasized that it should help advance the Doha Development Agenda this year. One of the specific points the APEC leaders outlined was the need to continue APEC's work on WTO capacity and confidence building in areas where the forum can best add value.

An APEC workshop in Santiago in February on WTO Capacity Building Best Practices was a unique meeting of developing and developed economies from Asia Pacific in order to assess achievements, address current needs and look further to the future of this process. It provided new and fresh thoughts on further improvement of WTO capacity building activity, not only in the APEC region, but worldwide. As the meeting's, rapportuer, Pierre Sauve, noted in his concluding remarks, "it's a model that should be replicated elsewhere."

The mood for completing the Doha Round is improving now, marked by a growing realization that an opportunity was missed in Cancun. "Multilateral trade liberalization is a global tax cut for all consumers and exporters and an engine for growth," US Treasury Secretary John Snow said in remarks to a Washington-based research organization on February 27. Indeed, the International Monetary Fund and the World Bank estimate that the static global welfare gains from eliminating barriers to merchandise trade alone are broadly in the range of US$250 billion to US$550 billion per year. Another study estimates the gains from removing all trade barriers at US$1.9 trillion.

But with 148 members, WTO negotiations take a lot of time. The process is complicated and deadlines are often extended. Many countries lack a thorough knowledge of international trade rules and have weak negotiating skills, which may prevent them from making the most of international trade talks or implementing agreements once concluded.

Along with the World Bank, the Asian Development Bank, the Inter-American Development Bank, the WTO Secretariat and other organizations, APEC and its members are now trying to fill those capacity and confidence gaps with a series of projects that teach a variety of trade policy-related skills.

Training workshops and seminars run the gamut from telecommunications and financial services trade policy to seminars on rules of origin, intellectual property protection, subsidies and countervailing measures. Says Prewpraei Chumrum of Thailand's Department of Trade Negotiations in the Ministry of Commerce: "It may not advance the Doha Development Agenda directly but it reflects APEC's stand that WTO matters remain a priority and [the workshops] help developing economies comply with existing obligations and the challenges ahead."

Building capacity and confidence among less-developed members has not historically been a WTO priority. However, there has been widespread popular concern that poorer countries, smaller companies, lower skilled workers, less educated individuals, women and youth are not well aware of the benefits of trade liberalization and globalization. Capacity building can help to raise awareness and ensure that benefits are shared widely, by providing knowledge and skills to those trying to cope with economic change. There is a need for wide-ranging capacity building, but in a practical sense one of the most immediate needs concerns ensuring that economies can effectively participate in the DDA negotiations.

The theory is that by improving skills through "capacity building" exercises like these, developing economies will be in a better position to participate fully in international trade talks and move the Doha Development Agenda forward. The projects help equip WTO members with the tools to analyse, understand and discuss the issues in the Doha Development Agenda and to find solutions beneficial to all. "The process is demand-driven," explains Singapore-based Sergey Shipilov, program director of the APEC Secretariat. "If an economy identifies a need they can tell us. We make sure the projects happen or we pay for them."

In some developing economies, core competencies must first be established so that the agencies responsible for trade policy fully appreciate the obligations of the agreements that they sign. After that, developing economies may turn their attention to increasing their level of expertise in trade policy and in a number of areas of government activity influenced by trade, as well as to fostering the ability to create new laws, institutions and infrastructure as required by international commitments. Indeed, many of APEC's efforts are aimed at expanding the general knowledge and administrative skills of an economy's public servants who are responsible for implementing WTO agreements. Other programs build capacity to participate in the WTO's dispute settlement mechanism and support accession to the WTO by new members.

Cindy J.H. Song of Chinese Taipei, who attended a course on negotiating skills sponsored by the WTO last year, notes that the workshops served as a starting point to collaborate with other international organizations and helped put issues in perspective. It was also practical and hands-on. "We learned by doing simulation which was very interesting," she says. "It helped us understand the dynamics of negotiation."

Mercedes Araoz, professor of international trade negotiations at the Universidad del Pacifico in Lima, Peru, who teaches workshops on issues such as anti-dumping and competition policy, has also attended a number of workshops herself, including on WTO rules and trade negotiation. She notes that workshops on negotiation skills with real-life case studies taught her important lessons such as "sometimes when you apparently lose you also gain." Araoz later implemented what she learned in the seminars and prepared a training program for the government of Peru.

Economies must be able to assess the impact of various proposals on their national interests. They must also possess the structural and political ability to implement the agreements they sign, and respond to the economic opportunities presented by trade in order to take full advantage of the benefits these agreements can bring.

According to a survey of nine of its members (China, Indonesia, Malaysia, Papua New Guinea, Peru, the Philippines, Chinese Taipei, Thailand and Viet Nam), APEC found that economies with low per-capita incomes needed help raising their knowledge of overall WTO affairs, while economies with higher per-capita incomes said they needed more knowledge about specific areas of WTO agreements.

In many cases a certain level of trade policy capacity may be required to identify where skills and knowledge must be improved. Only then can the economy's needs be prioritized. To fully participate in trade negotiations, developing economies must identify their offensive and defensive interests, build domestic consensus in favour of the position and identify allies and acceptable trade-offs in the broader negotiating environment.

APEC - whose mission commits its members to free and open trade and investment in the region no later than 2010 for industrialized economies and 2020 for developing economies -- offers a unique perspective on these issues because its members are a mix of developed and developing economies and share broadly positive experiences in terms of the value of trade for national development. The APEC Leaders' Meeting in Bangkok late last year made clear that the reinvigoration and successful conclusion of the Doha Development Agenda is a priority of all APEC members - both developed and developing. And that can only happen with more effective capacity building best practices that brings together experts in the field from recipient and donor economies and multilateral institutions.

The majority of the 335 projects on APEC's trade-related technical assistance (TRTA) website (www.apec-trta.org), APEC's online directory of trade related capacity building information for the Asia-Pacific Region, are funded and organized bilaterally. A majority of APEC economies have played a donor role in one or more capacity building projects, underscoring the important role developing economies can play in assisting each other by sharing their capacity building experience. APEC members have spent at least US$200 million on such programming in the past few years. In 2001 alone, APEC economies such as Australia, Canada, Japan, New Zealand and the United States provided more than US$70 million in trade-related technical assistance. APEC has helped finance 37 projects worth more than US$2 million through its own trade and investment liberalization and facilitation fund.

"It's cost-effective from APEC's perspective to do this because it will help empower its members to negotiate with other trade groups," sums up Charina J. Villarino, who works in the government of the Philippines' Bureau of International Trade Relations. "It's important to know the needs of both donors and recipients, negotiate those needs with each other, and then prioritize which is the most needed."