A Proper Perspective Of Vanuatu’s Accession To The World Trade Organization

A Proper Perspective Of Vanuatu’s Accession To The World Trade Organization
Discussions, talks, rumors and coconut wireless are attracting a lot of attention
recently on the case of Vanuatu joining the World Trading Organization (WTO).
The way we are relating to this development is as if Vanuatu is about to jump into a
cliff to end its life. There has been nothing positive but general opinions to
denounce what could be seen as a giant step authenticating economic
development in the post independence period of Vanuatu. You can sit and be
overly cautious about what globalization could bring; alternatively, you can grab
the opportunity and capitalize on our domestic operation to achieve positiveness
for the nation.

After reading recent articles; I realize the narrowness of our perspective on what
the development will bring. Joining WTO is not like joining a ship as it was
illustrated. Historically, when the General Agreements on Tariffs and Trade (GATT)
was abolished in 1993, none of the 75 member countries were affected. So there is
no reason to believe that if WTO collapses tomorrow our currency will collapse
together with our investments, our current Economic Partnerships Agreements
(EPAs) whether it is bilateral or multilateral will come to a stop.

I began to suspect that the reason of the negativity towards Vanuatu joining WTO is
the concern of losing revenue from tariffs through trade. I suggest that we look
around and see what is happening to our neighbors if they had suffered once
joining WTO then that should be a concern. But if they are working on their
domestic legislation, building up institutions that become the driving force of their private sector development then it is positive indication and we should consider doing likewise. Such development will address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. A study done by the Forum
Secretariat formerly the South Pacific Forum Secretariat revealed that tariff
protection has resulted in the non-development of the protected sectors in the
Pacific Islands. The protected sectors were found to be inefficient and unable to
meet even the local demand, with no strategic plan for exports.

The Doha Development Agenda (DDA) was also criticized but I believe that one
should understand that the components of the discussion consists not only fair
trade but capacity building, balance rules and good governance. Subsequently, one
need to understand the provision of the Special and Differential Treatment (SDT) to
ensure proportionality in the responsibilities and commitments of the WTO
agreements so that developing countries are dealt with fairly and according to the
progress in their development path. Regardless if we join WTO or not; currently, all
our Trade Agreements (TA) with our trading partners are now expected to be WTO
compliant especially when they are members of WTO. These include MSG TA,
PICTA and PACER Plus. If Vanuatu joined WTO then it will give more leverage
especially as it provides for forums such as Committee on Trade and Development
Special Session (CTDSS) to discuss their trade and development issues rather than
depending on our Melanesian friends or someone else to negotiate on our behalf.

It is common knowledge that we depend largely on few agricultural commodities
for exports and our geographical location does not help much. The question is, will
we add on to those constraints by being closed and restricting trade with other
nations? On the other hand, we do not just enter into WTO, submit our
applications and become a member. Member countries go through a complex and
long process of implementation of substantive reforms and alignment of domestic
institutions, policies and capacity building and WTO disciplines compliances
before joining. The only challenge here will be that whatever our government
officials are presenting to WTO is symmetrical as per ground. It is the role of
government official to align national strategic plan to be compliance to all WTO
regulations even if it meant for reforms that might have some social cost. But since
the government officials’ turnover is relatively high; we need to be serious and form
some realistic expectation of what we want in our WTO accessions process.
Because once we join; we need to sort our domestic differences and build a
strategic plan that is viable and literally compliant.

The issue of waiting until our domestic infant industries are capable to compete
internationally is some paradoxical belief with no philosophical basis. It is similar
to some groups who are asking as to why Small Islands States (SIS) suffer from
developed nations pollution emission programs because they were never given a
time to industrialize and pollute their own environment. Sounds naïve but if we
wait now then we will continue to distance ourselves from our international friends
and the disparity continues to widen. In addition , the ideology that Vanuatu can
develop all by its own without international trade should never be taken in by
anyone. Despite being one of the fastest growing economy in the Pacific region,
Vanuatu’s economic outlook still depend mostly on its continued policy for better
integration into the world’s economy.

Finally, Vanuatu has nothing to lose joining WTO apart from tariffs that we tend to
be worried about. Similar non-reciprocal agreement could be still be around like
the South Pacific Regional Trade and Economic Cooperation Agreement
(SPARTECA), we could be could be more actively involve in international forums to
discuss the Less Developed Countries (LDC) issues, we could join Fiji and the
others in the Small Vulnerable Economies (SVE) international negotiations in a
more united front relating to agricultural products particularly ‘friends of the fish’ and more importantly our capacity building should be directed in a more realistic way. Last but not the least China joined WTO only in 2001, a country growing by more than 9% in GDP growth and with a GDP worth more than US$5 trillion still thinks that WTO is a place to negotiate internationally and Bolivia’s not signing a particular trade documents was not due to WTO as mentioned but due to their
domestic problems. They had some issues also with the International Monetary
Fund (IMF). Their social and political instabilities led to the change of their
constitution and resignations of two of their presidents. Common knowledge is that
when such issues are happening domestically, your foreign policies will surely be
affected.