Feature-Not all trade talks are dead

SINGAPORE, Sept. 22 (UPI) -- The World Trade Organization's global trade liberalization talks may be dead in the water, but not all trade negotiations are dead. FTAs, Free trade Agreements, are now likely to become a much more used acronym as proponents of free trade decide to move ahead without the majority.

"FTAs are not a substitute for the multilateral system. With the collapse of the talks in Cancun, the Doha Round will be delayed by at least two years, probably more. This is an unhappy outcome. Countries will now make their own alternative arrangements, which must mean more FTAs," Singapore Minister for Trade and Industry George Yeo told United Press International after returning from Cancun, where he helped stir the agriculture negotiations.

The small-city state, which has no agriculture of its own, has always been a strong supporter of free trade and Yeo admitted that with the collapse of the recent WTO talks in Cancun, "FTAs have become even more important to us."

The government has already concluded trade pacts with New Zealand, Japan, the European Free Trade Association, Australia and, most recently, the United States, giving companies a better access to overseas markets for their goods and services.

Negotiations with Canada, India, Chile and Jordan are now in progress. Negotiations with South Korea could be launched later this year, while the Lion-state is also expected to start exploratory talks in October for a comprehensive economic partnership agreement, including elements of a free-trade pact, with Sri Lanka. This could lead to the launch of formal negotiations in the middle of next year or even earlier.

Yeo argues that Singapore's FTAs are "supplementary to the WTO, taking liberalization above and beyond the base arrangement."

"Singapore's FTAs address issues which the Doha Round doesn't address to the same degree, like comprehensive liberalization of services and protection of intellectual property," he noted, reaffirming that the country remained a "staunch supporter" of the WTO.

Some believe a bevy of bilateral FTAs could impede efforts toward global trade liberalization by acting in the interests of specific nations, but Yeo also told Monday a conference on small businesses that the force of globalization could not be side-stepped, "whether we like it or not.".

"Instead of avoiding the gaze of globalization, we should look it in the eyes," Yeo said. "We can not be content with serving just our domestic markets when others are looking into our markets."

Yeo said that coming after the weakening of the multilateral system in the U.N., the failure of Cancun was "bad for the world."

"There is danger of the world eventually dividing into blocs," he said, though adding that hope in the WTO should not be lost.

"At some point in time, we should give the Doha Round another push, he said, though adding it would be necessary to "improve" the governance structure of the WTO. "A system where close to 148 countries operate by consensus on complex issues is hard to work," he said.

The support for bilateral and regional FTAs is evident throughout Asia, with currently no less than 36 proposed and actual trading arrangements involving East Asian countries currently on the table.

Hot on the heels of Singapore, Thailand has also started negotiations with several trade partners. Having already agreed on FTAs with Bahrain and China, the country is now actively pursing deals with Japan, India and Australia, but negotiations are not all plain-sailing.

The Japan-Thailand FTA was expected to be signed by the end of the year, but negotiations have stalled over reduced tariffs on rice and chicken, and Japan's demand that Thailand improve its environment for foreign direct investment, including the liberalization of its telecommunications industry.

The Australia-Thailand FTA is also taking longer than expected, with negotiations stalling over rules-of-origin formulas, sanitary standards and liberalization of investment and services.

After Singapore, the U.S. is also eyeing free trade talks with Malaysia and Thailand and is expected to conclude a deal with Australia by the end of the year. A formal announcement on a U.S.-Thailand FTA negotiation could be announced soon to coincide with President George W. Bush's scheduled visit to Thailand in October.

Meanwhile, within the region, ASEAN has begun the process of working out free-trade deals with China, Japan and India with a 10-year time frame and there is also a proposal for a closer economic partnership between ASEAN and Australia and New Zealand.

But this renewed activity on bilateral and regional trade deals should not hide the fact that the road to freer trade in Asia will be a long one, with agriculture a stumbling block here as it was at the WTO.

Even when Singapore negotiates with Japan its trade deal, Singapore's tiny production of goldfish and cut flowers (orchids) had to be excluded from the deal. Rice, a major commodity throughout Asia, will also certainly lead to protracted negotiations.