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| Sunday, 5 February 2006 |
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Features |  |
| News Business Features Editorial
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Making SAFTA work better - Part I by Balakrishna Pisupati With the world's richest 500 individuals having a combined income greater than that of the 416 million poor people, inequity in social and economic systems are bound to cause concerns. Measures to enhance livelihoods of poor people and moving countries out of the economic, social and environmental apartheid, cannot only be based on past performance since such performance may not guide future outcomes according to our experience. What is critically needed is a change in the way the world looks at development using an 'inclusive strategy' to take together developing and under-developed countries rather than an 'exclusive strategy' where countries continue to grow unequally. While there are continuing arguments over the potential of trade to work towards a betterment of human life and development, the potential is still to be recognized due to inherent problems in trade between countries fuelled by a combination of unfair trade and structural inequalities, both within and in-between countries. From a development perspective, trade is only a means to an end not an end itself. Though export growth ratios of trade to gross national incomes (GNI) and import liberalization are considered as proxies for development, in reality they might not have much to contribute to development in absolute terms. It is hard to imagine the meaning of our negotiations on trade and development if rich countries continue to spend $1 billion a day on agricultural subsidies and agree to $1 billion aid over a year to poor countries. Research shows that some of the most serval trade restrictions by developed countries are against some of the poorest countries - counting sometimes to three to four times more than those faced by developed countries when they trade with each other. With increasing pressure on developing countries to safeguard the natural endowment of biodiversity and natural resources and at the same time work towards development, the agenda on poverty-trade-environment becomes all the more complex as well as compelling. The Doha Development Agenda of the World Trade Organisation (WTO) provides a great opportunity for countries to link trade and development, though this is a long haul. However, enough time is lost in realizing the principles of Doha Agenda and the 6th meeting of world trade ministers under the auspices of WTO attempted to provide some lease of life into realizing elements of the Doha Development Agenda. But going by the pace of debates and discussions within the WTO it is becoming increasingly clear that regional and bilateral trade agreement could be the best options for countries to take forward the trade and development agenda. However, regional level trade agreements do need a 'level-playing' field so that experiences like those in WTO are not repeated. This means regional trade agreements need to be more responsive to social, environmental and economic concerns of people in the region. This argument holds good when it comes to trading blocks with similar backgrounds in terms of socio-political systems. But it should be borne in mind that compromise for the benefit of poor is always important and that the partnership with unequal is the best way to achieve development that is sustainable. Given the above, it is important to note that the South Asia region is currently at cross-roads to ensure that the above mentioned principles are not only appreciated but put into policy language so that the South Asia Free Trade Agreement (SAFTA) that has come into force from January 01, 2006 is responding not only the economic benefits of the region but is also environmentally friendly and socially relevant. Trade, environment and development One of the contentious issues in environmental debates and discussions is the impact of trade on environment. Even the recently concluded conference of parties to the Cartagena Protocol on Biosafety reiterated that implementation of the protocol should consider the issues of discussions related to trade, including the WTO. On the other hand trade negotiators recognise the links to environment but are constrained by availability of 'policy spaces' to mainstream environment into trade agenda more effectively. Implications of trade regimes on poverty reduction, national development and biodiversity management. While it can be agreed that trade can be a powerful source of economic growth, it was amply demonstrated that liberalising trade does not ensure poverty reduction, development, environmental management nor guarantees immediate economic growth. The nature of resource allocation and social inclusion are the key for linking trade, conservation and development. Examples from countries around the world, demonstrate that there is a weak link between levels of tariffs and non-tariff barrier, making trade in environmentally sensitive goods a priority of focus for countries. Experience from countries such as VietNam, India and China clearly demonstrate the need for mainstreaming trade and development policies with better institutional innovations coupled with provision of better 'policy spaces'. With increasing focus on relating trade and conservation from the Multilateral Environmental Agreements (MEAs) perspectives, especially from the Convention on Biological Diversity (CBD), it is critical to discuss the impacts of trade regimes at national levels with development and conservation. Both Latin America and least developed countries provides us with examples of how natural resource management needs to be mainstreamed into national trade policies. Technology identification and transfer form one of the first steps for countries to ensure that the role of public enterprises in natural resource management is strengthened. In order to operationalise principles of conservation, trade and development in a harmonised manner countries should begin with human development assessments, accept diversity in strategy development at sectoral level and develop asymmetric rules to link the sectors. (Part II next week.)
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