Australian Government takes trade advice from Warwick University

The first Warwick Commission on the future of the trade system has been incorporated into what has been said to be, the biggest review of Australian trade policy in almost twenty years.

More than 70 recommendations on trade and investment policy have been taken into consideration by the Australian Government. The Report examines how the multilateral trade regime can better serve the global community.

The Hon Simon Crean MP, Australian Minister for Trade announced the new review which paid special attention to the Commission report and directly refers to recommendations made by the Commission in relation to regional trading arrangements and WTO reform.

It states: “The Review notes the debate on WTO reform that has followed the publication of the report of the Warwick Commission…The Review considers that a number of the Warwick Commission’s recommendations have merit and that the report makes a valuable contribution to the international debate on the future directions of the WTO”.

The review is particularly supportive of the Commission’s proposal that the WTO adopt a critical mass approach to agreements: “The suggestion has appeal as a way of moving beyond the hurdles that have arisen from the varying interests, capacities and priorities that have stalled progress in the Doha Round”

In addition, the review supports the Commission’s recommendation that the WTO’s temporary Transparency Mechanism for Regional Trade Agreements be made permanent. It does so by asking if the sustained and uneven transformation of the global economy, with the associated rise of new powers and considerable societal discontent, require a review of the current principles which are the basis of multilateral trade; the core of which is the World Trade Organization (WTO).

Having considered this question, the Warwick Commission sees five challenges facing the multilateral trade regime. These are challenges that can be addressed more effectively than at present if, as the Australian Trade Ministry and writers of the report, the steps proposed in the report are taken. The report considered both long term aims but were also aware of the realities of multi lateral trade today.

The Warwick Commission Report is said to be entirely independent and its only institutional link is with the University of Warwick.

According to the report, five challenges must be met if the multilateral trade regime is to succeed in the in the next few decades. The report suggests that these five arise from several sources: ‘national political dynamics, global economic developments and inter-state diplomacy.’

The first challenge is to counter growing opposition to further multilateral trade liberalisation in industrialised countries. This tendency threatens to render further opening of markets unduly limited. It is said to weaken this valuable instrument of international economic cooperation.

It is now an established fact that the bipolar global trade regime, dominated primarily by the United States and Western Europe, has given way to a multipolar alternative. Thus the second challenge is to ensure that ‘this evolving configuration does not lapse into longer term stalemate or disengagement.’

In this changing environment, the third challenge is to forge a broad-based agreement among the membership about the WTO’s objectives and functions, which in turn will effectively define the “boundaries” of the WTO.

The fourth challenge is to ensure that the WTO’s many agreements and procedures result in benefits for its weakest Members. This requires that the membership addresses the relationships between current trade rules and fairness, justice, and development. This point is one which critics are saying is difficult to reconcile with the first of the five aims.

The fifth challenge relates to the proliferation of preferential trading agreements and what steps can be taken to ensure that the considerable momentum behind these initiatives can be eventually channelled to advance the long-standing principles of non-discrimination and transparency in international commerce.

An integrated, comprehensive and systemic response is called for. The 75 page document took a long term view, requesting stakeholders in the trading system to ‘permit themselves the time and space to take a step back from negotiating…and running the daily business of trade policy in order to reflect on how they would like to see the trade regime evolve over the next few years.’ It is hoped that an inter-governmental ‘reflection exercise’ of this nature would seek to identify both diverse needs and common interests. Injecting greater legitimacy, order and dynamism into the multilateral trade regime was also a central theme. To achieve all these aims, the report writers also pleaded for urgency of action.

The Australian review comes shortly after the collapse of the Doha round of negotiations which ended in July this year when countries failed to agree on import rules and tariff thresholds. The Doha collapse this summer was essentially a result of the United States disagreeing with China and India on import rules.

The Warwick Commission launched their report at the World Trade Organization in Geneva in December 2007. Since then, Commissioners have travelled to North America, South East Asia, Australasia and Europe discussing their recommendations with policy makers and trade experts.