RIS South Centre Panel at WTO Public Symposium

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WTO, Development and Developing Countries:

Ten Years After

Nagesh Kumar

RIS

www.ris.org.in

RIS South Centre Panel at WTO Public Symposium

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Outline

• Multilateral trade negotiations and development

• Emerging asymmetries

• Implications for development

• Some Issues for reform

RIS South Centre Panel at WTO Public Symposium

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Multilateral Trade Negotiations and Development

• Process of trade liberalization for reaping efficiency gains

• Recognition of different levels in development and capacities of countries

• Concept of special and differential treatment (S&DT) incorporated

RIS South Centre Panel at WTO Public Symposium

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Trade and Development since the Uruguay Round

• Turning point• Major commitments in trade liberalization• Substantial obligations placed on

developing countries: TRIPs, TRIMs and GATS

• Promise of market access in agriculture, textiles and clothing and GATS mode 4

• These promises not coming through

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Trade Liberalization in Developed Countries: Growing Asymmetries

• High Peak Tariffs, Tariff Escalation and Specific Duties– Specifically on goods exported by poor countries

• Elusive Market Access in Textiles and Clothing

• Continued Protection of Agricultural Products

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Trade Liberalization in Developed Countries: Growing Asymmetries 2

• Resistance to Movement of Natural Persons

• Quotas and Non-tariff Barriers

• Stringent Environmental Requirements

• Contingent Protection: Anti-dumping

• Proliferation of RTAs/FTAs

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Protectionist Industrial Policy

• Growing R&D Subsidies

• Distortionary Investment Incentives

• Export Subsidies to Manufacturers

• Growing Subsidies to Agriculture

• Continued Use of policies akin to Local Content Requirements

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Implications for Development

• GATT/WTO not related to trade liberalization or growth of trade: empirical studies

• Trade liberalization and development: evidence• Declining terms of trade and share of developing

countries in world trade • Adverse mercantilist balance• Substantial income transfers and loss of policy space• Record of growth in 1990s has been poorer compared to

1980s and inequalities have risen • Inequitable sharing of the fruits of globalization

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Doha Development Agenda

• A new round of trade negotiations launched in 2001 in Doha

• Attempt to address some of the development concerns:• Phase-out of all export subsidies on agricultural products and

substantial reduction of domestic support• Elimination of peak tariffs on products of export interest to

developing countries; modality for tariff reduction based on less-than-full-reciprocity

• Primacy of public health over IPRs• Launch of negotiations on Singapore Issues only on the basis of

‘explicit consensus’ at the Fifth Ministerial• Review of S&DT provisions to make them effective

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Progress of the Doha Agenda

• Going back on the spirit of Doha Development Agenda

• Agricultural subsidies vs. market access

• Non-agricultural market access

• Push to launch negotiations on Singapore Issues at Cancun; dropped only in the July Package after the collapse

• No progress on making S&DT provisions

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Collapse of Cancun Ministerial

• A Case-Study in Asymmetric Process of Decision-making

• Draft Ministerial texts heavily influenced by the submissions by the Quad countries

• Neglected the widely supported submissions by developing country coalitions

– Singapore Issues; Agriculture– Cotton subsidies

• A question mark on the sustainability of the multilateral trade negotiations

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An Agenda for Reform

• An Independent Commission for Development Assessment of the system

• Reform of the decision-making process• Broad-based and representative secretariat• WTO Watchdog of Developing Countries• Strengthening the Provision of Technical, Legal

and Financial Assistance• Support for Trilateral cooperation

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Some Issues for Proactive Action by Developing Countries

• Framework Agreement on Movement of Natural Persons

• Framework Agreement on S&DT

• Framework Agreement on Transfer of Technology

• Framework for Protection of Traditional Knowledge and Biodiversity

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Thank you