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To Help Tsunami Victims, Agencies Look Beyond Charity To Trade
By
Karen Martell
February 12,
2005
International officials say that trade, as opposed to aid, may
prove to be a far more powerful tool for repairing the devastated
economies left behind by last December’s tsunami. Vital
economic sectors like fisheries, agriculture, textiles and tourism,
all could be revived through trade, say these officials.
“Immediate trade measures for the affected export-oriented
sectors could have a strong impact on socio-economic recovery,” said
the United Nations Conference for Trade and Development (UNCTAD)
secretariat’s assessment, published January 15, 2005.
Oxfam America emphasized the importance of trade in a report
on January 26 entitled Learning the Lessons of the Tsunami. The
report welcomes moves by the Paris Club of creditors and the
European Union to loosen export restrictions for tsunami-affected
countries.
“The international community hasn’t yet adequately
addressed the issues of conflict, debt relief, and fair trade,” said
Oxfam President Raymond C. Offenheiser, in a press release announcing
the report.
Likewise, WTO chief Supachai Panitchpakdi has urged Members “to
individually reflect deeply and expeditiously on whether there
is anything they can do at this movement in time in terms of
their trade policy.”
Dr. Supachai spoke to individual measures, such as expanding
market access and restraining use of trade remedies. He also
suggested some form of enabling action at the multilateral level.
To help the hardest-hit countries, Mahesh Sugathan, an economist
at the International Center for Trade and Sustainable Development,
suggests “WTO Members could consider an ‘early harvest’ market
access deal of the Doha Round in sectors of export interest to
those countries affected by the tsunami.”
For instance, Sri Lanka paid EUR 57 million in textiles import
duties to the European Union in 2003 and Indonesia EUR 136 million.
Sri Lanka’s textile exports to the US face average duties
between 13 and 17 percent, resulting in an annual disbursement
of US $250 million. Reducing these import duties could help these
countries to recover.
Meanwhile, “WTO Members have an entrenched reluctance
to create new categories of countries entitled to more favorable
treatment, as the inconclusive talks on small and vulnerable
economies amply demonstrate,” said WTO chief economist
Patrick Lowe.
The International Center for Trade and Sustainable Development
has proposed temporary measure as an alternative. WTO Members
could decide to voluntarily refrain from imposing anti-dumping
and countervailing duties on exports from the tsunami affected
countries for a certain period of time. They could also support
a moratorium on challenging subsidies given to small-scale fisheries
and industries affected regions. And finally, they could temporally
overlook measures not in complete accordance with WTO obligations.
The mandate for the WTO’s newly agreed negotiations on
trade facilitation offers another option, as it would exempt
developing and least developed country Members from implementing
commitments if they do not receive the necessary support for
infrastructure development.
UNCTAD’s January report estimated that $30 billion of
the region’s tourism and fisheries exports are now at risk
and identified immediate trades measures that could make a significant
difference.
Such trade measures include a temporary elimination of import
duties for products of the affected countries. Anti-dumping and
safeguarding measures could be rescinded. Officials could focus
on trade capacity building to help tsunami-affected countries
reach importing countries sanitary and phytosanitary standards.
Thus, opening market to service providers from the effected countries.
Measures aimed at rebuilding the tourism industry could be helpful
as well.
The US government has agreed to consider reviewing its anti-dumping
duties ranging from 5.6 to 13.4 percent on shrimp from India
and Thailand.
Countries, including Thailand and Sri Lanka, have requested
tariff reductions as a means to help economic recovery while
Oxfam America has proposed textiles tariff cuts for Indonesia
and the Maldives.
Meanwhile, as expressed by United States Trade Representative
Robert B. Zoellick, US shrimp and textiles industries are strongly
opposed to tariff reductions that would ease market access in
these sectors.
European Union member states, on the other hand, agreed on January
20 to adopt the Union’s new Generalized System of Preferences,
offering Sri Lankan textiles and other GSP-eligible products
duty free access.
The EU has also promised to consider reviewing and suspending
trade defense measures such as anti-dumping duties and said it
could re-orient its trade-related technical assistance to help
the affected countries boost exports through, for instance, assisting
businesses in complying with health standards.
Modifying trade rules to help countries that are victims of
natural disasters illustrates the value of such measures for
even poorer countries. For countries in Sub-Saharan Africa, plagued
by grinding poverty, low or negative economic growth, disease,
environmental degradation and an utter lack of infrastructure,
trade together and well-targeted aid and debt relief could be
extremely valuable.
Ricardo Meléndez-Ortiz, director and founder of ICTSD, said, “It
is reasonable to suggest that any privileges the multilateral trading
system grants to the tsunami-affected countries, could well be
extended to the WTO’s most vulnerable Members.”
Contact Karen Martell at martelka@stanford.edu
