World Trade Chief Praises Expanding Global Market

World trade is on the cusp of major expansion - and not just in the Asia-Pacific region.

So says Renato Ruggiero, director-general of the year-old World Trade Organization. Despite some slow growth areas, the world has become a global marketplace. Last year cross-border trade in goods and services reached $6 billion for the first time in the international trading system's 50-year history, according to the WTO's 1995 world trade report.

Perhaps more telling is the growth in developing countries, Mr. Ruggiero tells the Monitor in an interview prior to a conference this week in Singapore. The meeting aims to set the agenda for the 120-nation group, whose mission is to promote free and fair trade and monitor disputes.

"Many developing countries are opening up to this global market," he says. "Trade has decreased the marginalization of the world's poorer countries. We're talking about a global market now and less about regional or national limits." He backs this up with several points: Four-fifths of WTO members are developing countries; 29 applicants knocking on the door of the WTO are developing countries or economies in transition; and 10 African nations had 3 to 6 percent growth in 1995.

Meanwhile, economic output grew more slowly last year in the large industrial nations of the Organization for Economic Cooperation and Development than in non-OECD Asia, Central and South America, and several transition economies. Yet, Ruggiero says, industrialized countries must support these nations with investment and trade. "These countries, such as in Africa, need a strong engagement from industrialized countries to continue this growth."

Ruggiero says the Uruguay Round of trade talks, which led to the WTO's founding, already has had an impact. It was the latest in a series of tariff-cutting postwar trade negotiations under the General Agreement on Tariffs and Trade. "The fact that WTO members now abide by a more comprehensive rules-based system represents a huge step forward for the multilateral trading system. Of course, the long-term benefits will build up gradually, but will be very large," he says. Tariffs on industrial products in developed countries are being cut and will finally be reduced by 40 percent. Service-sector markets are also opening.

World merchandise exports expanded 8 percent in volume terms in 1995, well above the 5.5 percent average gain in the past decade.

But he sees several issues to address:

*Already more than 30 cases have been brought before the WTO's dispute-settlement body for resolution.

*Major nations including China and Russia are not yet members of the group. Both want to join. Ruggiero says China has been presented with a list of questions about its policies on imports, tariffs, and subsidies that it can answer at a meeting in July.

*An accord to deregulate the global telecommunications industry, expanding competition and reducing prices, is nearing an April 30 deadline. Ruggiero says a successful telecommunications pact would have an enormous impact on world trade.

*Nations must deal with the boundary of social and commercial interests, he says. Officials in some nations are calling for linking basic labor standards to free trade deals. "This has been, and still is, a very divisive subject.... The question is how best to implement human rights and what UN institution should ... do this."

*Regionalism can fit into the multilateral system. Regional trade pacts can bring more countries into the international trading system by forcing member countries to slash tariffs and open markets. But he says regional blocs must not be allowed to get in the way of progress toward global free trade.

*Corruption remains a major trade barrier. Governments must seriously consider this issue and work to improve transparency.