What does the WTO do for
the Developing Countries?
Leverhulme Lecture, Nottingham 22 April 2002
Sam Laird
Chief, Research,
Division for International Trade, UNCTAD
April 2002
WTO and Development
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Overview
 Developing
countries in the GATT
 Development issues in the WTO
– Lessons from Seattle
– Trade and trade policy developments
 The
April 2002
« Doha Development Agenda »
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The ITO and the GATT
 The
Havana Charter 1947
– Chapters on employment and economic activity,
economic development and reconstructions, restrictive
business practices, intergovernmental commodity
agreements, and the establishment of the ITO
 ICITO
& the GATT
 Development reforms in the GATT
– 1954-55 – Article XVIII, Article XXVIII bis
– 1964 – Part IV
– 1979 – the Enabling Clause
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Key GATT ideas
 Freer
(not free) trade in goods through reciprocity
in negotiations
 Tariffs not NTBs
 Non discrimination (MFN & national treatment)
 But RTAs allowed, unilateral preferences under
Enabling Clause and waivers (Cotonou, CBI, etc)
 Rules for trade – progressive coverage of
disciplines
 Dispute settlement (consensus to accept)
April 2002
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GATT to the WTO
 Establishment
of new organization, 1995
 Inclusion of services and intellectual property
 Revised dispute settlement mechanism
 Single undertaking
 New market-access commitments in goods &
services
 Revised rules
 Extended membership of developing countries
 Increased complexity, decision making harder
April 2002
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Seattle Issues
 Were
all “Trade and…” issues ripe for deal
(investment, competition policy)?
 Should all issues be in WTO (environment,
labour standards)?
 Implementation problems
– Where is the cheque?
– Backloading, AD, Safeguards
– Need for TA, longer transition periods
April 2002
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Seattle - Two conflicts of
vision about WTO
 WTO
as key legal framework for
intergovernmental economic relations,
protector of rights, rules of law
 Trade
 WTO
negotiations as a cooperative game
intrusive, secretive, undemocratic
 lack
of transparency
 controversial DSM cases
 Consensus rule-making (veto>vote)
April 2002
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The road from Seattle to Doha
 Launching
of mandated negotiations in agriculture
& services - BIA
 Mandated reviews of WTO agreements
 LDC package – EBA, AGOA
 Work on TA budget (Pay off in March 2002)
 Accessions – especially China
 Transparency (internal cf external)
 Addressing implementation problems
– Textiles, DSM, AD, GPA, TBT/SPS, TRIMs, TRIPS,
RTAs
April 2002
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Policy developments
 Trade
policy reforms in developing &
transition economies in last 10-15 years
– NTBs eliminated or reduced
– Tariffs rationalized and cut to 10-20%
– More to be done
 Tariff
peaks, escalation, growth of AD measures,
licensing systems, local content plans, technical
barriers
 Protection
bias against developing countries
 Increase in RTAs
April 2002
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Post-UR Tariffs by Sector
Product Group
Developed
Agriculture exc. Fish
Fish & fish products
Petroleum
Wood, pulp, paper & furniture
Textiles & clothing
Leather, rubber, footwear
Metals
Chemical & photo. Supplies
Transport equipment
Non-electric machinery
Electric machinery
Mineral prods., precious stones & metals
Manufactures, n.e.s.
Industrial Goods (Rows 4-13)
All merchandise trade
April 2002
Developing
Applied
Bound
Applied
Bound
5.2
4.2
0.7
0.5
8.4
5.5
0.9
2.2
4.2
1.1
2.3
0.7
1.4
2.5
2.6
7.2
4.9
0.9
0.9
11.0
6.5
1.6
3.6
5.6
1.9
3.7
1.0
2.0
3.5
3.7
18.6
8.6
7.9
8.9
21.2
14.9
10.8
12.4
19.9
13.5
14.6
7.8
12.1
13.3
13.3
19.9
25.9
8.4
10.3
25.5
15.4
10.4
16.8
13.2
14.5
17.2
8.1
9.2
13.3
13.0
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NTBs in OECD - by major sector
1996
ISI
C
1
Description
Jpn
NZ
Nor
Mex
Tur
CH
USA
Agric., forestry & fishing
0.5
7.2
7.0
0.0
0.0
5.2
0.0
0.6
2.8
2
Mining & quarrying
0.0
6.7
0.4
0.0
0.0
24.5
0.0
0.0
0.4
21
- Coal mining
n.a.
42.9
n.a.
n.a.
0.0
0.0
n.a.
0.0
0.0
22
- Crude petroleum
n.a.
0.0
n.a.
n.a.
0.0
46.2
n.a.
n.a.
0.0
23
- Metal ores
n.a.
4.4
n.a.
n.a.
0.0
0.0
n.a.
n.a.
4.0
29
- Other
n.a.
3.6
n.a.
n.a.
0.0
0.0
n.a.
0.0
2.3
3
Manufacturing
1.7
5.4
2.5
0.0
0.9
12.9
0.3
0.1
8.1
31
- Food, bevs., tobacco
8.3
11.1
8.6
0.0
0.0
1.9
0.0
0.8
1.2
32
- Textiles & apparel
0.0
75.4
28.7
0.0
24.3
70.6
0.0
0.0
68.3
33
- Wood & wood prods
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.8
34
- Paper & paper prods
0.0
1.9
0.0
0.0
0.0
0.0
0.1
0.0
1.3
35
- Chem. & pet. prods
0.6
1.6
1.4
0.2
3.7
3.8
0.0
0.0
3.2
36
- Non-metallic min. prods
0.5
0.0
0.0
0.0
0.0
0.4
6.6
0.0
6.1
37
- Basic metal industries
0.0
0.6
2.6
0.0
0.0
36.5
0.1
0.0
30.4
38
- Fabricated metals
0.2
0.0
0.0
0.0
0.0
15.1
0.0
0.0
6.1
39
- Other
0.0
0.0
0.0
0.0
0.2
31.9
0.0
0.0
1.7
Total
1.5
5.6
2.8
0.0
0.4
11.8
0.2
0.1
7.2
April 2002
Aus
EU
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Anti-dumping actions against groups 1980-99
100
90
80
70
60
Developed
50
Developing
40
Transition
30
20
10
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
0
Source: WTO.
April 2002
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Trade developments
 Developing
countries share of world trade
highly variable
– 20% in 1973, 28% in 1999
– But 33% in 1947
– Countries which have diversified to
manufactures have generally done better
– Decline of 2 percentage points following Asian,
Russian, Brazilian crises, but strong recovery
 Few
April 2002
trade policy reversals
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Doha – The New Agenda
 Extended
market access - potential gains
– BIA - Agriculture - $70bn, Services - $300bn?
– PLUS - Manufactures - $70bn – added at Doha
 Other
immediate negotiations
– AD, subsidies, environment
 New
negotiations in 2003? Subject to consensus
– investment, competition policy, transparency in
government procurement, trade facilitation
 Further
study
– electronic commerce
 S&D
April 2002
provisions, technical assistance
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Doha – Other parts of the deal
 TRIPS
 Subsidies
 Implementation
 Cotonou Agreement
 Bananas
 Labour
April 2002
standards - ILO business
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Issues: To what extent does WTO system
contribute to economic development?
 Promotion
of good policy:
– Transparency, Tariff reduction & binding, QR elim.,
licencing, TBT/SPS, state trading, procurement, RTAs
– GATS, agriculture, textiles (at last?!)
– BUT: AD/CV! BOP! Infant industry protection?
Subsidies? Safeguards? TRIPS? Future: Investment,
competition policy?
 Significant
implementation costs:
– Customs valuation, AD/CV, TRIPS, TBT/SPS, textiles
– Future: Competition, investment policy? Trade
facilitation? Government procurement?
April 2002
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Issues: To what extent does trade
contribute to economic development?
 Long
term gains, short-term costs
 Linkages between investment, trade and growth
 Effects on income distribution, wages and
employment
 Need for social safety nets, better designed
structural adjustment programmes
April 2002
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Is Doha a time bomb?
 WTO
not a development institution
– Many elements are good policy, but some bad signals
– Protectionist bias against developing countries
– Too much or too little latitude for developing countries?
 Development
issues – now a top priority
– Genuine concern or fear of stalemate in WTO?
– Is a development friendly outcome of the DDA
guaranteed?
 What
is the future of S&D treatment?
– More enforceability? Greater differentiation? Issueoriented treatment? More “policy space”?
 Regionalism
April 2002
and/or multilateralism?
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