How Com­mon is the Com­mon­wealth?

Are all the mem­bers ben­e­fit­ing equally from the com­mon wealth of this large body?

Southasia - - FRONT PAGE - By Si­jal Fawad

The Com­mon­wealth’s ef­forts to get ac­tively in­volved in the pro­mo­tion of re­gion­al­ism in South Asia are be­ing widely ap­pre­ci­ated. The or­ga­ni­za­tion is try­ing to ad­dress var­i­ous emerg­ing and ex­ist­ing pol­icy is­sues in the re­gion with the sup­port of South Asian think tanks, civil so­ci­ety groups and the academia and by main­tain­ing pro­duc­tive relationships with re­gional pol­icy ex­perts. Po­tent as it is, a re­gional ap­proach to na­tional pol­icy anal­y­sis is lauded by many ex­perts. How­ever, ques­tions abound about its ef­fi­cacy in the face of the even more po­tent mul­ti­lat­er­al­ism.

In to­day’s world, re­gion­al­ism has resur­faced with a greater force. One will be hard-pressed to find a coun­try that is not a part of at least one re­gional agree­ment. It’s the de­vel­op­ing and emerg­ing coun­tries which par­tic­u­larly weigh the worth of re­gional agree­ments in gold, as these are per­ceived to be crit­i­cally help­ful in steer­ing their eco­nomic growth and de­vel­op­ment in the right di­rec­tion.

Just as the world is em­brac­ing re­gion­al­ism with open arms, so is the mul­ti­lat­eral trad­ing sys­tem. This sys­tem is com­plex, but is con­tin­u­ously grow­ing, mak­ing the man­age­ment of re­gional in­te­gra­tion more chal­leng­ing. The tus­sle be­tween lo­cal­ism and glob­al­ism and the ques­tion of which one is bet­ter for a coun­try has left many pol­i­cy­mak­ers and an­a­lysts grop­ing for so­lu­tions.

The prob­lem can be linked to the per­cep­tion and func­tion of trade as a whole. Trade be­tween coun­tries is not a mechanical, ro­botic process with clearly de­fined pro­ce­dures and in­struc­tional man­u­als to be fol­lowed. Even though the eco­nomics of trade have been a sub­ject of in­tense re­search in the past, the trad­ing sys­tem is a re­flec­tion of de­vices of not just eco­nomics but also pol­i­tics. And, as any­one would know, the room for am­bi­gu­ity in­creases and the thin line be­tween white and black blurs, when­ever the lat­ter is in­volved.

Align­ing a coun­try’s trade stand­ing to ei­ther re­gion­al­ism or mul­ti­lat­er­al­ism is not a strat­egy that should be on the agenda of wise pol­i­cy­mak­ers, es­pe­cially in the con­text of de­vel­op­ing coun­tries where the need for eco­nomic de­vel­op­ment is cru­cial. In such in­stances, co­her­ence be­tween mul­ti­lat­eral trade agree­ments and re­gional agree­ments needs to be de­vel­oped.

Tak­ing into con­sid­er­a­tion the schol­arly lit­er­a­ture avail­able and the gen­eral opin­ion of ex­perts and pol­i­cy­mak­ers, the over­all con­sen­sus seems to be against bur­geon­ing re­gional trade ar­range­ments. It is based on the hy­poth­e­sis that criss­cross­ing such agree­ments will lead to greater in­co­her­ence, con­fu­sion and un­pre­dictabil­ity in trade re­la­tions. Be­ing in­volved in var­i­ous re­gional and mul­ti­lat­eral trade agree­ments does put a strain on the ne­go­ti­at­ing prow­ess of coun­tries, es­pe­cially if these agree­ments are un­der­taken de­spite a dearth of in­sti­tu­tional and hu­man re­sources.

Not­with­stand­ing this, some im­por­tant con­tri­bu­tions to eco­nomic growth and po­lit­i­cal sta­bil­ity can be at­trib­uted to re­gional trade agree­ments. Take the case of South Asia. Many eco­nomic chal­lenges faced by the re­gion can­not be re­solved in­di­vid­u­ally by coun­tries. How­ever, through the South Asian Free Trade Agree­ment (SAFTA), even smaller coun­tries can vie for mar­kets that oth­er­wise would have been dif­fi­cult to tap.

As far as wel­fare gains from RTAs (re­gional trade agree­ments) are con­cerned, the in­creas­ing level of trade be­tween mem­ber coun­tries may be of ad­van­tage to lo­cal pro­duc­ers in cer­tain coun­tries which oth­er­wise may not have re­ceived the sig­nif­i­cance they de­served. Com­pe­ti­tion re­sult­ing from tar­get­ing sim­i­lar mar­kets in a cul­tur­ally-strewn re­gion, and ben­e­fits of economies of scale for lo­cal pro­duc­ers, now man­u­fac­tur­ing for a rel­a­tively larger mar­ket, are also there. In­tra-re­gional ex­ports have seen quite

a boost for many RTAs, seen most vividly in the case of the Euro­pean Union.

“The for­ma­tion of an en­larged re­gional mar­ket space through re­gional trade lib­er­al­iza­tion is not per­ceived as an end in it­self but as a step­ping­stone to­wards the fu­ture at­tain­ment of a sin­gle eco­nomic, so­cial and cul­tural group­ing, span­ning sev­eral coun­tries,” said a 2005 United Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNCTAD) re­port on re­gion­al­ism in de­vel­op­ing coun­tries.

Be­sides, the po­lit­i­cal-eco­nomic ad­van­tages of re­gional trade agree­ments are also worth a thought. For in­stance, de­vel­op­ing coun­tries can move closer and quicker to freer trade than they could in a trade agree­ment at the mul­ti­lat­eral level. At the same time, lessons learnt and the ex­pe­ri­ence gained from re­gional agree­ments can be ap­plied to mul­ti­lat­eral ar­range­ments later. In ad­di­tion, the re­quire­ment that most RTAs have to be com­pat­i­ble with the rules of the World Trade Or­ga­ni­za­tion sug­gests that there is some hint of ef­forts to­wards in­te­grat­ing and pos­i­tively col­lab­o­rat­ing on mul­ti­lat­eral and re­gional agree­ments, fur­ther strength­en­ing the worth of the lat­ter.

How­ever, is mak­ing poli­cies and draft­ing them for a suc­cess­ful re­gional ar­range­ment enough? Clearly not. For any re­gional trade agree­ment to be suc­cess­ful, im­ple­men­ta­tion and de­liv­ery of all ne­go­ti­ated agree­ments needs to be en­sured. It is es­sen­tial for pri­or­i­ti­za­tion to be en­forced by bu­reau­cra­cies and that there is a greater co­or­di­na­tion be­tween gov­ern­men­tal in­sti­tu­tions and non­govern­men­tal or­ga­ni­za­tions such as think-tanks. There is also a need for struc­tured pro­cesses for im­ple­ment­ing re­gional pro­grams and ap­prais­ing their progress in col­lab­o­ra­tion with non-gov­ern­men­tal or­ga­ni­za­tions.

At the same time, at­tempts need to be made to en­sure that re­gional trade agree­ments do not en­cour­age too much pro­tec­tion­ism and in­ward- look­ing trade poli­cies. Bar­ri­ers to non-par­tic­i­pat­ing mem­bers need to be low­ered for greater lib­er­al­iza­tion and a more out­ward-ori­ented ap­proach and for greater align­ment with mul­ti­lat­eral agree­ments. This also im­plies that weaker trad­ing part­ners should be given spe­cial at­ten­tion to en­sure that the agree­ment does not put smaller or eco­nom­i­cally chal­lenged coun­tries at a dis­ad­van­tage.

Fur­ther, strong gov­er­nance prin­ci­ples and ra­tio­nal res­o­lu­tion of po­lit­i­cal and di­vi­sive is­sues, es­pe­cially in a re­gional bloc like South Asia which is mired in deep­rooted po­lit­i­cal prob­lems, also make a sig­nif­i­cant dif­fer­ence when it comes to turn­ing re­gional agree­ments into a boon or bane.

What is unique about the South Asian re­gion in par­tic­u­lar is the vast vari­a­tion in the economies of the re­gion. At one end, there are emerg­ing coun­tries such as In­dia which has been the ap­ple of the cap­i­tal­ist world’s eye for the past sev­eral years. At the other end is war-torn Afghanistan where the con­cept of eco­nomic pros­per­ity is a far-fetched no­tion. Where this of­fers con­sid­er­able op­por­tu­ni­ties for coun­tries in the re­gional bloc to unite, it also makes room for a lot of chal­lenges in man­ag­ing re­gional agree­ments, es­pe­cially when it comes to mo­ti­vat­ing the rel­e­vant min­istries of the re­spec­tive de­part­ments.

As dis­cussed, re­gional trade agree­ments have their mer­its and de­mer­its. The fo­cus needs to be more on de­vel­op­ing a deeper co­her­ence be­tween mul­ti­lat­eral and re­gional agree­ments rather than de­bat­ing which of the two should be gen­er­ally pre­ferred, es­pe­cially when it comes to the in­ward-ori­ented, pro­tec­tion­ist na­ture of the lat­ter ver­sus the global fo­cus of the for­mer.

Coun­tries will con­tinue to sign up trade agree­ments with re­gional part­ners and mul­ti­lat­eral trade agree­ments will con­tinue to pose a chal­lenge to many of these pro­lif­er­at­ing RTAs. How­ever, strik­ing that per­fect bal­ance with a re­gional and global fo­cus, with the ul­ti­mate mo­tive of so­cio-po­lit­i­cal and eco­nomic de­vel­op­ment, is what coun­tries should strive for.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.