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Al Habtoor Information & Research
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 Here in the Gulf, international trade deeply influences people's daily lives in many ways. It decides our consumption patterns,
dictates the quality and choice of the products available to us, influences the manner in which employment is created or lost, how economic and social policies are formulated, ensures
the distribution of income, and dictates the gap between rich and poor. Yet the implementation of trade agreements that have deeply affected the
way in which international trade is organised has gone largely unnoticed among the majority of citizens in the region. What little media interest there has been in the
World Trade Organisation (WTO) is mainly created by trade disputes between the major trading powers - the European Union, the United States, Japan and the
developing countries. But this lack of awareness is gradually changing, as informed people around the world become increasingly concerned that the WTO is only there
to benefit the G7 countries, at the expense of the developing nations.
 Supporters of the WTO claim that it is an instrument
for globalisation and a means of maximising opportunities for economic growth, job creation and prevents the marginalisation of the least developed countries by the promotion of universal free trade.
The common held belief underpinning the development of the WTO by governments, politicians and businessmen in nearly all countries around the world, is that a structured rules-based, non-discriminatory
global trading system is the best way to ensure the economic well being of their citizens. It allows fair entry into global markets for a country's goods and services,
and it also offers mechanisms for the resolution of trade disputes and protection against unfair competition.
Detractors say that the WTO is a rich man's club that benefits the wealthy countries
more than the poor developing countries. They point out that developing nations cannot afford full time representation in Geneva, the home of the WTO, and this
makes it difficult for their voices to be heard. Because they are poor of resources, they find it hard to participate in the complex WTO system and find that fulfilling
their obligations as WTO members causes economic harm to their citizens. This also applies to the dispute settlement system, as very few of the poor developing nations
have the legal expertise or the means needed to pursue a settlement claim. In addition, the WTO's decision making process has little transparency, accountability or
equity, and like the World Bank and the International Monetary Fund, operates outside the United Nations system, with access limited to diplomatic representatives
of member states, WTO staff and staff from other inter-governmental oganisations that have observer status. These factors ensure that the G15 countries are able to
establish an agenda that maintains their dominance of the global economy.
However, this is all changing. Ever since the failure of the Seattle round of
negotiations - largely due to the least developed countries' protest over how little say they had in the proceedings and functioning of the WTO - the organisation has
started putting in place measures that would allow more participation for, and give more influence to, the least developing nations within the WTO.
Both sides seem to agree that the development of world trade that is rule - based and fair to all is a good thing. The disagreement is really between those that see the
WTO as the engine of international trade and those who see it as a cartel of wealthy developed nations intent on protecting their markets while exploiting the markets of others.
No one can pretend that a global trading system, regulated by the WTO, can provide answers to all the problems that our post-industrial information based world presents
us with. So, will joining the WTO enable the countries in the Middle East and North Africa to be economically better off?
Some Gulf States and MENA countries have already joined the WTO, while the rest are applying for membership. The leaders of these states all take the view that their
countries' economic interests will be best served by being members of a world body that will help regulate and develop global free trade.
This has far reaching implications for the people of the region, for they are confronting a wholly new world that is pushing them to open up their markets to
foreign capital and competition. Moving them away from their more conservative and protectionist ways of doing business, may, in turn, lead to unpredictable political
and social change throughout the region.
Old-fashioned business practices will come under pressure, such as Agency Laws,
long the backbone of economic life in GCC states, and the awarding of contracts and franchises to a country's trusted influential families. Accounting and booking-keeping
practices will have to be brought into line with international reporting standards, while copyright and trademark laws will have to be enforced; currently some
countries comply with international standards while others don't. More importantly, the concept of intellectual property will have to be universally accepted, and
protection enshrined in law. These changes, as they occur, will be nothing less than a revolution in the business culture of the Middle East.
Can the regions old business culture change? Can a typical family - run company for example, open itself up to outside capital with the loss of control that this implies?
Many people think so and are optimistic, seeing the opening of markets as an opportunity for growth and profit, rather than a challenge that has to be faced by
protectionist measures. Others do not, and greatly fear that opening local markets will see their businesses swept away by a tidal wave of international investors and
multinational corporations, leaving them as nothing more than mere ciphers in their own countries. Some also see the WTO as an arm of western economic imperialism
that seeks to dominate world trade, just as the old colonial powers sought economic domination by building empires and using military force to maintain and win markets.
 Critics and opponents of the WTO are right to point out that a multilateral trading system cannot solve every economic or
social problem that comes along, nor should it be expected to; it is unrealistic to think that all will gain equally, as there are always some who benefit more than
others in any situation. But, as nearly every country in the world has signed up, or is intending to join the WTO, any country or region would be foolish to try and stand
alone outside the multilateral global trading system that the WTO is putting into place.
In the final analysis, globalisation of the world's economies is a fact. All nations are
part of it, willingly or unwillingly. The Arab economies, no less than others, trade across borders and rely on other nations to supply them with goods and services.
Thus, it is better to be in the WTO than out, for at least its regulated structure and disputes settlement procedures go some way to ensuring that all nations will benefit.
A presence within the WTO, for the Arab economies, will allow participation in negotiations and the formulation of trade agreements, ensuring that the 270 million
Arab citizens living in 22 countries of the region are represented fairly and their interests protected. There will be a price to pay for integration into the global
economy for Arab economies, as they open their markets up to foreign competition; but on balance, it is one worth paying.
Opinions on the benefits of Globalisation and the WTO's role in world trade may differ, but everyone agrees that however good or bad globalisation is, it is certainly here to stay. |
