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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

16/09/2003

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Bernama

CATEGORY

HEADLINE

Malaysia Rejects Cancun WTO Draft Declaration
CANCUN, (Mexico), Sept 14 (Bernama) -- Malaysia has totally rejected arevised draft declaration of the Cancun Ministerial Conference issued bythe World Trade Organization (WTO) here Saturday as the text blatantlydisregards its interests and that of other developing countries.

Minister of International Trade and Industry Datuk Seri Rafidah Aziz saidMalaysia was unhappy with the references to four new issues simply becausethe revised text implies that there will indeed be the launching ofnegotiations of modalities for them.

"Malaysia not only rejects the draft text, but its position isnon-negotiable regardless of whether there are movements or changes ordevelopments in discussions in other issues," she told Malaysianjournalists here.

However, she said Malaysia supports the process of clarification so thatcountries could comprehend in detail what is meant by multilateral rulesfor the four new issues -- investment, competition, trade facilitation andtransparency in government procurement.

Another bone of contention was developed countries linking these four newissues to agriculture through what is known as a single undertaking inhammering out a global trade deal although Malaysia has consistentlystressed that each issue be dealt on its own merit.

"The text has blatantly not taken into account the deep concerns of somany countries that have registered their opposition to any launch ofnegotiations on modalities here in Cancun," she said.

The minister said that "the onus is on the countries that are proponentsof single undertaking and the countries that are linking the new issues totheir positions in agriculture to come out with a further draft that isacceptable to all.

For Malaysia, she said that whether or not there is a Cancun ministerialdeclaration, "we still have to work domestically to continue with the pathof growth and our growth is not going to be dependent on a declaration.

"We have to seek out investors and markets as we have always done," theminister said.

Rafidah revealed that Malaysia, together with India, co-chaired themeeting of like-minded countries with similar positions and submitted atext indicating "what we like to see in the declaration but this hascompletely been ignored."

"Malaysia, therefore rejects this present text."

"And I have written to the chairman of the conference, to the WTOdirector-general, to the core facilitators and to all concerned partiesreiterating Malaysia's position that on all four new issues, it does notagree to the text and does not agree to the launch of any negotiations,"she said.

"We are not alone in this as there are several countries which haveregistered their written disagreement," Rafidah said, stressing that "weare not linking this to the other issues."

"We are not changing our positions come what may," said Rafidah, who wouldsit in for the last leg of the meeting to thrash out details of the finaldeclaration which is expected to extend even as late as Sunday.

As for agriculture, the minister said that Malaysia "agreed in generalwith the text, but there are certain provisions that we need to discussfurther, especially where the flexibilities we are seeking are not tooclear."

"We are alright with the other sections of the revised draft declarationpertaining to services and on non-agricultural market access. There areone or two minor points that we like to bring up," she said.

As for Malaysia's provision of export credit for agriculture given toother developing countries, she said there "are some minor issues forwhich we could put our points through proper approaches."

But Rafidah reiterated that "we are very strong (in opposing) the four newissues."

"I have been approached by the European Union as well as Japan seekingMalaysia's change of position and I have told them we are not going tomove on our disagreement to launching negotiations on these new issues,"she said.

The WTO draft text seems to link the four new issues to agriculture andthis is totally rejected by Malaysia.

Asked whether developed countries were still being dogmatic despite strongpositions by developing countries not to launch negotiations on new issuesor linking them to agriculture under a single undertaking, she said:

"I am puzzled by the EU's contradictory position because on the one hand,it talks about single undertaking linking all thes issues under onepackage, and yet on the other, its trade minister Pascal Lamy is proposingdirectly to me that for the new issues, we can have an 'opt in opt out'position," she said.

This means that Malaysia can choose to participate or not to participate.In other words, in the same breadth, the EU is contradicting itself.

"If you allow some countries to opt out, the question of singleundertaking is academic. So you only apply the single undertaking conceptto some countries which participate and those who opt out are not involvedin the single undertaking.

"That really shows the lack of understanding why many countries do notwant to launch negotiations on new issues," she said.

They are even willing to contradict themselves in order to get someaccomodative approach," the minister said.

As to why the facilitators for the discusions did not register the demandsof developing countries, she said that they were perhaps not listening.

"Not only have we said verbally in the meeting, I on behalf of thecountries that attended the core group meeting opposing launching ofnegotiations put it in writing and even proposed an alternative text toreflect our position."

"That has been completely ignored but instead they have come out with arevised text that implies straightaway the launching of negotiations. Inother words, there is a complete disregard for this group of countries,"the minister said.

"To a suggestion that as such, the WTO was not democratic as it ignoredthe views of more than 70 developing countries or half of its membershipof 148 countries, she said that as far as the four new issues areconcerned, there must be explicit consensus."

At the moment, not only is there no explicit consensus, there is a vastmajority who do not want to launch negotiations.

Also, the EU has been on record to say that they have moved so much ondomestic subsidies and that developing countries have not moved.

That is certainly not a valid argument because no other country except thegroup of countries in the EU have such domestic support policies thatdistort the marketplace, she said.

She said: "Other countries such as Malaysia don't need to move anywherebecause we don't have such trade-distortive domestic support.

"They are the ones who are guilty of it who should be doing it, we aremoving to the best of our ability in areas such as services,non-agricultural products or industrial goods," the minister said.

Besides this, Japan's argument that Malaysia needs multilateral rules oninvestment in order to encourage Japanese investors to come and investdoes not hold water.

It fears without such rules, their investors might not be motivated tocome to Malaysia.

Rafidah said: "My answer to this is that Japanese, European and Americaninvestors have been rushing to go to China long before it became a memberof WTO, let alone before China had a set of investment rules to show forit.

"So its not true, investors will go to any country where they arecomfortable investing in and where they can make money," she said.

And in Malaysia, they are very comfortable as our own policies are verytransparent, very attractive, there is government support, there isinfrastructure and they are investing in areas where Malaysia iscompetitive and this definitely does not include labour-intensiveindustries, she said.

"So whether or not there are multilateral rules, it is of no importance tosuch investors, Japanese investors in Malaysia have not talked about suchinvestment rules, they are only concerned about the country's investmentrules, not WTO multilateral investment rules.

"That point is not valid anymore," she said.

"We do not subscribe to universally applicable investment rules that mayimpinge upon our sovereign rights to determine policies of domesticinterest," she said.

To suggestions that developed countries have from the start disregardedthe development aspects of trade talks as evident from the text, Rafidahsaid:

"I have never regarded the Doha (where the previous WTO ministerial washeld) round as a development round because for Malaysia, right from thestart, it has been a hard fight and for developing countries, to get theirpoint of view and interests through.

"It is called a development round to pacify all parties, it is a neutralword and it is the fashion of course to focus on development, that givesthe impression you are bringing everybody on board -- the masses, thepoor, the business community." she said.

"I have never myself paid too much attention on those semantics," shesaid.

"For many countries, whether in Cancun the WTO comes out with adeclaration or not, they have to continue shaping their own domesticpolicies for growth.

"Should we face problems in the marketplace due to protectionist measures,we resort to the existing WTO rules.

"That is why if in this document (declaration) there are provisions toimprove on those rules, that eliminate trade-distorting measures such asdomestic support and export subsidies, then countries will have a betterchance to sell in the marketplace of developed countries," she said.

Of course for Malaysia, we are interested in some of the agriculturalproducts, such as vegetable oils, palm oil, and industrial goods and evenif these are not addressed here, we will continue to do what we need to doto get markets.

Even other countries share Malaysia's views that their future does nothinge on this ministerial declaration in Cancun at all.

The message is clear to Malaysia and that is to continue to enhance itscompetitiveness, removing tariffs, undertaking our obligations beyond theWTO every year as we abolish tariffs on a wider range of goods.

"Our commitments are WTO-plus-plus actually, even in telecommunications,our market opening is higher than what we committed to the WTO while ourtrade weighted average tariff for industrial goods is low at just overeight percent.

"That is why Malaysia and other countries that have actually undertakenunilateral market opening should be given credit for it and not be made tobe treated equally with those who still have very high tariffs," saidRafidah who leaves for home after the meeting Sunday.

-- BERNAMA