KUALA LUMPUR, July 17 (Bernama) -- World Trade Organisation (WTO) membersnegotiating to liberalise global trade must ensure the talks producetangible benefits for developing countries through flexibilities, specialand differential treatment, and enhanced capacity building.

This would contribute towards better integrating developing and leastdeveloping countries into the WTO multilateral trading system, theMinistry of International Trade and Industry (MITI) said.

"Failure to narrow differences and reach a consensus on any of the areasunder negotiations, particularly the three market access sectors for thecurrent round, will pose challenges in strengthening confidence in theorganisation," the ministry said in its 2002 report released hereThursday.

The three areas include agriculture, non-agricultural products andservices.

MITI said that the Fifth Ministerial Conference to be held in Cancun,Mexico in September 2003, is expected to take stock of the current roundof negotiations, as it would be mid-way through the mandated deadline ofJan 1, 2005.

Nonetheless, negotiations this year are expected to intensify inpreparation for the ministerial conference.

For agriculture, it is imperative that developed countries, which have sofar resolutely pursued their own interests, come to a compromise toresolve issues pertaining to market access for developing countries and,in particular, the impact of their huge subsidies on exports of developingcountries.

In previous WTO meetings, Malaysia argued on the need for a moreaggressive tariff-reduction formula than those proposed.

Malaysia's position took into account the need to balance its interest asa major exporter of palm oil, as well as the developmental objectives ofits agricultural sector.

"Malaysia will continue to seek an outcome that will discipline the use ofmost trade distorting subsidies that palm oil currently has to contendwith in third country markets," MITI said.

As for non-agriculture products, Malaysia expressed concern on the overlyambitious proposals that call for the harmonisation of tariffs at very lowlevels and proposals that do not recognise the rights of developingcountries to accord tariff protection on sensitive industries.

It also continued to stress that any modalities for reduction of tariffsmust take into account the special needs and interests of developingcountries.

Under the Uruguay Round, Malaysia committed 63.5 percent of its products(tariff lines) with an average bound rate of 16.47 percent fornon-agricultural products.

As for services, MITI said Malaysia has taken the position thatnegotiations should not be entirely premised on the goal of services tradeliberalisation but to promote the economic development of developingcountries.

"Specifically, the negotiations should ensure that developing countriesbenefit from increased market access for their service suppliers andstrengthening of domestic capability and competitiveness," the ministrysaid.

MITI also said that members should also come to a consensus in areas ofconcern including Trade-Related Intellectual Property Rights (TRIPS) andpublic health and special and differential treatment (S&D), which are ofinterest to the majority of WTO members, which are developing countries.

As far as Malaysia is concerned, MITI said that it would continue with itspragmatic approach and remain actively engaged in the various negotiationsat the WTO.

"Domestic consultations will be intensified with all the stakeholders inorder to advance the country's interests," the ministry said.

-- BERNAMA