Natural resource trade 'still under-regulated'

Nirmal Ghosh, Straits Times 11 Aug 09;

BANGKOK: Trade in natural resources is still largely under-regulated, World Trade Organisation (WTO) chief economist Patrick Low warned yesterday.

He underscored the necessity of a successful conclusion to the Doha Round of negotiations on an international trading system. Natural resources range from hydrocarbons to forestry and fishery products.

'Resource competition is intensifying, and our task is to try and find synergies for international cooperation,' Dr Low said at a panel discussion on the future of the world trading system.

Citing unregulated hydrocarbon trade, he said the WTO would be considering what could be done to make it less likely a flashpoint for conflict in trade among nations. The WTO's flagship study next year would focus on the issue of natural resources, he said.

'There are some real differences of view on what needs to happen. But basically what seems to be happening is the underlying conditions of supply and demand are changing quite fast. (though) we got a breather because of the recession in this respect.'�

But there are countries that believe the WTO should have a much stricter doctrine on access to supplies of raw materials, he said.

He added that they are in direct opposition to those who think this is like any other resource and it belongs to the country where it is located.

The Doha Round has been stalled for years mainly over differences between developing countries and the developed world regarding agriculture.

Meanwhile, a slew of countries and regional blocs have entered into bilateral or regional trade agreements, which offer quick gains but are seen by those in favour of the WTO as undermining the concept of a rules-based world trading system born of global consensus.

A minister-level meeting of the 153-member WTO is scheduled for December, but many analysts see little scope for progress as basic issues remain unresolved.

Dr Low warned against protectionist measures in response to the current global recession.

But he acknowledged that despite some 'protectionist noises', governments have so far been restrained.

The crisis, however, has underscored that international trade remains fragile in the absence of the rules base that the Doha Round was supposed to establish.

He added that the challenge of climate change could not be managed in the trade context without a multilateral framework.