There is a very definite sense of irony that Iran will be one of the most interested onlookers at the Fourth Ministerial Conference of the World Trade Organization (WTO), when it opens in Doha, Qatar, on November 9. For the country, which for so long carried the banner against the capitalist domination of the developing world, is now almost enthusiastically seeking membership in the body which more than any other represents the ascendancy of global business over narrower national interests.
The Ministerial Conference is the primary decision-making body of the WTO. It is required to meet at least every two years, bringing together all the countries and customs unions that are members of the organization.
As it is, Iran should already know by July 18 whether its WTO membership is a going concern. For it is then that the organization’s General Council will decide whether to accept its application. If it does, then a working committee will be created to negotiate the terms for its ascension, and the country will be granted automatic observer status to the Qatar conference.
For Iran, membership in the WTO would mean a monumental change in direction. It would require opening the Iranian markets to foreign competition—removing trade barriers, subsidies and price controls. It is a process that is strongly supported by the country’s reformists, and one that is opposed by conservatives, who are concerned about its economic, social and possibly political impact.
Speaking in May to the economic daily Abrar-e Eqtesadi, Mahdi Tabatabei, an influential member of the Iranian parliament’s budget committee warned against WTO membership. Iran can neither quantitatively nor qualitatively compete with other industrial countries when it comes to production, he stated, adding that Iranian industrialists and investors would be forced to turn to brokering, rather than manufacturing.
Iran’s powerful clergy, which has darkly warned about the moral dangers of WTO membership, also has an economic interest in resisting membership in the trade body. The terms that undoubtedly would be demanded if Iran is eventually successful in completing the ascension process almost certainly will damage the status of the “bonyads”—the so-called charitable foundations that are both controlled by and help support the religious establishment.
Originally created for the provision of social support services during the rule of the former shah, in the years following the 1979 Islamic Revolution the bonyads grew into veritable conglomerates, with business interests both inside and outside Iran. Their holdings include soybean, wheat and cotton farms near the Caspian Sea; tourism enterprises, including more than 24 hotels; a railway service, the country’s most popular soft drink; global shipping lines with offices in London and Athens; and much more. Sources say that many of most senior bonyad officials are key allies of the country’s supreme leader Ayatollah Ali Khamenei, who also happens to lead the struggle against the reformists, led by President Mohammad Khatami.
Because they are officially charitable bodies, the bonyads operate in virtual secrecy, exempt from paying taxes and from scrutiny under which most business enterprises are subject. Such practices would almost certainly be rejected by WTO negotiators, who typically demand transparency and an even playing field in the business arena.
Opposition to Iran’s being part of the WTO is not only internal. The country actually made its first application for membership in 1996, but was blackballed by the United States, which traditionally has charged it with sponsoring terrorism and has imposed a trade sanctions regime against it.
Several times Iran put out its feelers, but was rejected. However, this past May, a group of developing countries led by Egypt agreed to sponsor its application, and got it a preliminary hearing. Despite the efforts of the United States, it was decided to place the issue on the agenda of the WTO General Council meeting on July 18.
And this time the signs are better than ever that Iran will get past the initial stage. For one, the new Bush administration is less enamored with the trade sanction tool, and also is closely connected to the US energy sector, which is concerned that it is missing the boat while its European and Asian rivals are gaining a foothold in the Iranian oil industry. In May, the US ambassador to the WTO, Rita Hayes, said her government reviewing its position on Iran's application.
As things are, Khatami has over the past year managed to push through a series of legislation that is all necessary should WTO membership ever become reality. This includes a foreign investment law, and bill permitting the enforcement of international arbitration, and a law managing the regulation of copyright and trademark standards according to international standards.
Agreement by the WTO to accept Iran’s application will provide a real boost in the arm to Khatami’s reformist movement, and possibly create the type of momentum that has been endorsed overwhelmingly by the country’s electorate, but thus far stymied by conservative forces. – (MENA Report)
© 2001 Mena Report (www.menareport.com)
