WTO CREDIBILITY QUESTIONED IN ASIA

The March 15 early morning broadcast from Radio Australia reported that the Philippines is reviewing its membership in the World Trade Organisation because of tariff disputes over its top exports. Philippine Trade Secretary Manual Roxas was reported to have said that the country might withdraw from its membership in the World Trade Organisation over what he claims is the trade body's discrimination between rich and poor members. Citing the United States decision to impose tariffs of up to 30% on imported steel, and the European Union's preference for tuna from Africa and the Caribbean rather than the Philippines, the Trade Secretary considered the WTO ineffectual.

Elsewhere in Asia, the perception is shared that multilateral global free trade is beginning to be replaced by regional trading blocs that favour their own members over the rest of the world. If the EU and NAFTA can present difficult entry barriers for non-members, then perhaps this western approach to free trade can confer some of the same benefits across the Pacific.

Although it is a key economic region, Northeast Asia still lacks any sort of inclusive economic cooperation framework. Korea and China both lack free trade agreements of any kind with other nations. In the years to come, commercial competition and economic conflict among Korea, China and Japan will likely increase. Consequently, business interests in Korea, China, and Japan are beginning to suggest that their governments should work on some form of a Northeast Asian Free Trade Area. An NEAFTA, based on standard free trade criteria, may find its strategic rationale by emphasising commercial advantages of interest to the business community, such as developing a Northeast Asian steel community, or undertaking joint development of the Yellow Sea.

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