Ika Krismantari, Jakarta – The much-hyped global trade talks collapsed Tuesday with economic powers and top developing nations trading the blame and leaving countries like Indonesia locked out of prospective markets.
The breakdown of the World Trade Organization (WTO) talks revolved around a failure to bridge the interest gap between developed and developing nations on key issues, notably the much-debated agriculture subsidies.
But for Indonesia, according to University of Indonesia economist Chatib Basri, the collapse will lead countries to be more protective and eventually put Indonesia and its relatively open-market system in a disadvantageous position.
"We cannot do much, even though we have this liberalized point of view in our trade activities, when the international market is against it," Chatib said.
Indonesia in particular will find it more difficult now to access big markets like China and India, whose import tariffs can be high.
"We have our own interests in the talks. We cannot let our market be flooded with Chinese and Indian products when we cannot enter their markets," Chatib said.
Indonesian Trade Minister Mari Elka Pangestu expressed deep disappointment over the collapse of the talks. Mari led the delegation from Indonesia, which is the coordinator for the G33 group of developing countries.
The Geneva talks crumbled as key trading powers failed to agree on, among other things, the "special safeguard mechanism", which was meant as a tariff aimed at protecting poor farmers.
The talks – the latest of the Doha Round of global free trade negotiations – had been seen as a last-ditch effort to strike an agreement.
Another analyst, H.S. Dillon, however, sees things differently, saying Indonesia should look at the talks failure as a way to safeguard the nation's economic interests from a full-blown liberalization drive.
Dillon said Indonesia would be better off forging more bilateral trade ties with other promising countries rather than pursuing a multilateral trade deal, which often puts developing nations in a weaker position vis a vis developed ones.
He also said the failure in Geneva should result in more benefit than harm to Indonesia, as the opportunity that the country could gain from any multilateral deals would have been minimal due to its lack of competitiveness.
"We can also start improving our competitiveness so that we can be fully ready to compete in the global trade system," he said.
As reported by Reuters, anti-globalization groups worldwide Wednesday hailed the collapse of talks on a new world trade treaty as a triumph for farmers, workers and the poor around the globe and a blow against "big business".