Don't Get Tangled in the Spaghetti Bowl!
Returning to an earlier post from Kaushik on the world after Cancun, it seems the poorer and weaker states will inevitably be the most prejudiced. This is indeed a tragedy when you think of all the energy expended by the anti-globalisation lobby in derailing the Doha round, purportedly to help the very people who it now seems clear could suffer most.
What is a bane for the WTO looks like turning into a boon for airlines and hoteliers. Negotiators will be racking up the air miles for years to come as they criss-cross the globe to complete a raft of regional and one-on-one market-opening deals which have sprouted like mushrooms since the collapse of World Trade Organisation talks last month in the Mexican resort of Cancun.
To their supporters, bilateral and regional free trade agreements (FTAs) help shore up the multilateral trading system by spurring laggards to tear down barriers or suffer slower growth in trade and incomes than more open economies. "Our experience is that all three tracks or roads to opening up markets are valued and not opposed to each other," Mexican President Vicente Fox said on at a two-day summit of the Asia-Pacific Economic Cooperation (Apec) forum.
To their detractors, however, FTAs are a second-best solution that create what Columbia University professor Jagdish Bhagwati calls a "spaghetti bowl" of conflicting rules which distort trade flows at the expense of a single set of WTO-policed regulations.Detaching officials and lawyers to negotiate FTAs also leaves less time and energy to devote to WTO talks, critics say. But perhaps the biggest objection to two-way deals is that poor states are likely to be left in the cold. That would make them two-time losers because it is they which stand to benefit most from new global rules to lower barriers to their exports.
Source: Times of Malta