World Trading System and Development: Issues and Challenges

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World Trading System and Development Issues and
Challenges

• Nagesh Kumar
• RIS
• www.ris.org.in

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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
  (SDT) incorporated

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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 RD 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
• 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-reciproci
  ty
• 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 SDT provisions to make them effective

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Progress of the Doha Agenda and Cancun

• All the important deadlines for Doha Agenda were
  missed in the pre-Cancun phase
• 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

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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 SDT
• Framework Agreement on Transfer of Technology
• Framework for Protection of Traditional Knowledge
  and Biodiversity

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Thank you