-Cavet Lector-   <A HREF="http://www.ctrl.org/">www.ctrl.org</A>  -Cui Bono-

A very interesting development, coming in the wake of the Kamapa's flight,
and Palden Jenkin's recently shared thoughts on the Chechens, Tibet, China,
India & Mongolia.

Dave Hartley
http://www.Asheville-Computer.com/dave

http://www.stratfor.com/
__________________________________________
STRATFOR.COM Weekly Global Intelligence Update
11 January 2000

China and India Declare War on the WTO

Summary

China and India are championing the cause of developing nations
that are members of the World Trade Organization (WTO). India has
warned that the "WTO cannot be allowed to become another world
government," while China has said that the organization "does not
reflect the interests and demands of developing countries enough
and clearly has defects." Both nations have called for developing
nations to rally together to take a stronger role in the WTO. As
major economies of the developing nations prepare for conflict with
the developed nations, the efficacy and fate of the WTO are at
stake.


Analysis

Speaking on Jan. 10 at the Confederation of Indian Industry's
annual Partnership Summit, Indian Commerce and Industry Minister
Murasoli Maran called for developing nations in the World Trade
Organization (WTO) to join together to counter the influence of
developed nations. At a Beijing press conference, also on Jan. 10,
the Chinese vice-minister of the Foreign Trade and Economic
Cooperation Ministry, Zhang Xiang, criticized the WTO for
insufficiently reflecting "the interests and demand of developing
countries." Zhang further suggested that China's WTO entry would
strengthen the negotiating hand of the developing nations within
the organization. With both India and China targeting the WTO, the
showdown recently seen in Seattle
[ http://www.stratfor.com/services/giu/112999.asp ] is likely to
continue, threatening the role of the international body
[ http://www.stratfor.com/shakeupimf.htm ].

The WTO is divided between developing nations and developed
nations, particularly the United States and the European Union. The
battle between these two factions hampered agreement in Seattle
last year. India, currently one of the largest economies among the
developing nations in the WTO, has called for the uncoupling of
labor and environmental standards from the WTO's core focus: trade.

During his speech in New Delhi, Maran called for more time and
preferential treatment for developing nations as they worked to
integrate with the global economic system. Maran warned, "The WTO
cannot be allowed to become another world government." He called
for developing nations to resist moves by the developed nations
that threaten sanctions to reduce the competitiveness of the
developing nations.

Even though it has yet to complete the bilateral agreements that
precede membership in the WTO, China, too, has attacked the
dominance of developed nations in setting the organization's
agenda. China is already setting itself up as a leader among
developing nations in countering what it perceives to be the
overwhelming influence of the United States in the international
organization.

In a Chinese government paper detailed by Japan's Kyodo News, China
foresees a clash between the "Chinese-style market economy based on
socialism and the interventionist policies of Western countries."
China expects that its entry into the WTO will increase the ability
of developing nations to "counter large countries and obtain equal
rights and interests amid the world economy which has been
manipulated by the economic policies based on Western countries'
strong-arm politics."

With China and India, both major economies among the developing
nations, looking to take control of the WTO agenda, conflict with
developed nations - led primarily by the United States - is
inevitable. The WTO may well end up perpetually mired in debates
between the developing and developed nations, leading to more
ungainly compromises, like the sharing of the director-general
position [ http://www.stratfor.com/services/giu/050699.asp ].

In addition, if developing nations in support of preferential
treatment and state-run economies do take control in the WTO, the
United States and other major developed nations may pull back from
the organization, leaving it an ineffective bloc of third-world
economies with little international influence. Already, the WTO's
size and the economic disparities between member nations seriously
hamper the institution.

The failure of the recent agenda-setting meeting in Seattle, as
well as the difficulties in even choosing a WTO director general
last year are clear indicators of the direction in which the WTO as
an organization is headed.




(c) 2000, Stratfor, Inc. http://www.stratfor.com/

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