CANCUN (Mexico), Sept 12 (Bernama) - Malaysia, whose palm oil exports tosome markets are subject to tariffs as high as 300 percent, has called onWorld Trade Organization (WTO) members to reduce such discriminatoryagricultural tariffs to more reasonable levels.

Importing countries such as India, a major vegetable oil market, imposeshigh tariffs for palm oil, but other vegetable oils such as soybean aresubject to lower tariffs and this makes it costlier for Malaysianexporters to compete.

International trade and industry minister Datuk Seri Rafidah Aziz, inpresenting Malaysia's case at the ongoing fifth WTO Ministerial Conferencehere Thursday, had called for the elimination of trade distorting domesticsupport mechanisms and export subsidies by developed countries.

At the same time, "developing countries must be allowed to use exportcredit on reasonable terms to promote their exports," she said in herstrongly-worded but pragmatic speech.

Rafidah, in upholding Malaysia's consistent stance in defending theinterests of lesser economies in her presentation, proposed thatdeveloping and least developed countries be given flexibilities to open uptheir markets in every area of trade negotiations.

She suggested that developing countries be given a longer time period,perhaps 10 years as opposed to five years for developed countries, toimplement market access.

Besides this, there should be "less than full reciprocity in tariffreduction, for example, a 20 percent reduction by developing countries asopposed to a 60 percent reduction by the developed nations."

Rafidah felt that "necessary policy space" ought to be given to developingand least developed countries for them to pursue development objectives,such as using incentives to develop strategic industries which are key totheir economic development.

Against a backdrop where many had resigned to the fact that the currentWTO ministerial meeting would be a failure, Rafidah, one of the world'smost articulate ministers on trade and economic matters, argued that theCancun meeting should not be evaluated simply as either being a success ora failure.

"We have various options open to us, to enable the meeting to come up witha statement or a text which can give clear guidance on the future workbeyond Cancun," she said.

She added,"The meeting should not be trivialised by any +all-or-nothing+hardline positions. We must have the wisdom to extract from the menu ofissues, those which expeditiously lend themselves to consensus. We shouldbe brave and pragmatic enough to defer, till later, issues on which aconsensus cannot, as of now, be attained."

The minister also said WTO members "should not take on more than we canaccommodate, but rather, we need to ensure, through judicious managementof the varied positions and standpoints, issues which can quickly benegotiated upon for agreement, and come up with ministerial directives onwhat work needs to be done after Cancun."

Rafidah also warned against some countries being too ambitious, saying itmade more sense for members to work towards extracting from the differinglevels of scope and ambition, realistic common denominators and to havepragmatic decisions.

Such approaches would lend themselves to the required consensus andtherefore enable the Cancun meeting to be a success, she said.

Rafidah also congratulated the entry of fellow Asean member, Cambodia,along with Nepal into the WTO officially, saying that Malaysia also lookedforward to the early accession of other Asean members -- Laos and Vietnam,into the Geneva-based global trade organisation. WTO's total membershipnow stands at 148.

Referring to the Ezulwini Statement issued on Aug 15, 2003, by the SmartPartnership Movement comprising 14 WTO members which reiterated theirbelief in the role of the WTO in bringing about fair and rules-basedtrade, Rafidah said WTO decisions must reflect the views of all members.

Stressing that priority must be given to developmental concerns in keepingwith the fundamental objectives of the WTO, the minister also regrettedthat hardly any progress had been achieved over the two years since thelast ministerial meeting in Doha except for the agreement on TRIPS andPublic Health.

Negotiations in agriculture, which were fundamental and upon which theprocess of the entire negotiations hinged, remained contentious andcontinued to be at an impasse, she disclosed.

As for non-agriculture market access, Rafidah said Malaysia was supportiveof a non-linear approach, but any formula to be agreed upon, "mustaccommodate the development needs of developing countries, which arealready liberal, but may have high tariffs in selected strategicindustries."

"It is also Malaysia's position that export taxes and restrictions are nota part of the current negotiations, " she emphasised.

Rafidah said Malaysia "cannot accept any proposal for sectoral approach,in respect of market access for non-agricultural products, especially ifit involves the mandatory participation by all. If at all, the approach isadopted, participation by developing countries would be on a voluntarybasis."

As for services, she said Malaysia subscribed to the WTO principle ofprogressive liberalisation and would further liberalise sectors where andwhen the country was ready.

Calling on developed countries not to pressure developing countries tobind their services sectors prematurely, Rafidah said Malaysia wanted theEmergency Safeguard Measures for the services sectors to be in place.

Turning to the much discussed issue of special and differential treatment(S&D) and flexibilities for developing and least developed countries, theminister said Malaysia did not doubt that every WTO member agreed to andabided by this principle.

"However, the issue is, how the principles are translated into effectivemarket access, by countries, which are in a position, to provide suchopportunities."

"Malaysia would like to emphasise that in every negotiation, developingand the least developing countries be given flexibilities," she said.

Rafidah also said the question of graduation and differentiation ofdeveloping countries raised by several WTO members in the context of S&Dwas tantamount to trying to re-interpret the mandate and definition of S&Dand also the principle of "less than full reciprocity."

She stressed that Malaysia opposed any attempt to divide and segregatedeveloping countries.

As for the new issues of investment, competition, transparency ingovernment procurement and trade facilitation, she said these issuesremained contentious and were opposed to by most WTO members.

Rafidah said WTO members had decided in Doha that negotiations on theseissues could only commence if there was explicit consensus and "clearly upto now, there is none."

"It is obvious that the proponents pushing to include these issues fornegotiations have not been able to convince other members of the utilityof WTO rules in these areas," she said.

Under these circumstances, she said Malaysia would not agree to beginnegotiations on any of these issues, but would suggest that theclarification process be continued.

Rafidah, in taking cognisance that many issues were before the ministers'attention, called on them to be pragmatic and focus on issues withconvergence in position amongst members.

For issues where divergent issues remained, she said more time should begiven for deliberations towards achieving an acceptable solution.

While improved multilateral rules and greater market liberalisation wouldindeed contribute towards the expansion of world trade, which can havepositive spin-offs among trading nations, there were nevertheless costsinvolved, she said.

No country, she said, could be expected to subscribe to universallyapplicable multilateral rules in trade if the costs were onerous and ifthey lost sovereign rights to determine policy measures which have adirect impact upon their development goals.

The WTO ministerial meeting here ends on Sunday.

-- BERNAMA