EMERGING ISSUES AND THE MULTILATERAL
TRADING SYSTEM
SOME ISSUES AND IMPLICATIONS FOR
DEVELOPING COUNTRIES
WTO GENEVA WEEK
CUTS INTERNATIONAL, GENEVA SESSION
GENEVA, 12 DECEMBER 2012
RASHID S. KAUKAB
OUTLINE
• Some emerging issues: brief implications for developing
countries
• Emerging issues and the multilateral trading system: a
development perspective
• Way forward: some suggestions for developing countries
2
I. SOME EMERGING ISSUES
• World is changing but that is nothing new: what is new is
the pace and complexity of changes
• Power balance and politics: emerging economies; RTAs
• Economics and finance: Euro debt crisis; exchange rates
• Resources gaps: food, water, and energy
• Interplay of issues: climate change
• Business and markets: global supply chains
• Driving force and opportunity: innovation and technology
3
I. EMERGING ECONOMIES: SOME
IMPLICATIONS
• Alternative and growing markets for other developing countries
• Diversified power balance in the WTO
• Can they provide finance, technology, and markets for value-added
products?
• Can they bring more equal distribution of power in the WTO?
4
I. RISE OF RTA: SOME IMPLICATIONS
Challenges:
• Rules on new issues and deeper disciplines on issues covered in the
WTO (WTO+) thus setting precedents e.g. on IPRs, investor-state dispute
settlement
• Diverting attention and resources from the MTS
• Creating web of overlapping and conflicting rules
• Marginalisation of smaller developing countries
5
I. RISE OF RTA: SOME IMPLICATIONS
Opportunities:
• Larger economic spaces for smaller developing countries
• Testing new rules and new issues
• Building negotiating experience and skills
• Basis for alliances in the MTS
6
I. ACCESS TO RESOURCES: SOME IMPLICATIONS
• Growing demand: global population growth; Chain and India factor; expanding
global middle class; inefficient use
• Growing demand for not only energy but for raw materials, water and land
• Impact on long term prices: increase and volatility
• Rise in disputes including at the WTO
• More export restrictions
7
I. ACCESS TO RESOURCES: SOME IMPLICATIONS
Resource-rich countries
• Urgent need to use gains from commodity/resource price boom for
diversification and structural transformation of economies
• Sustainable management of natural resources
Resource-poor countries
• Stable access, e.g. to food and energy resources
• Development of appropriate MTS disciplines on export restrictions
General
• Investing in renewables
• Regional arrangements
• Negotiating better agreements
8
I. CLIMATE CHANGE: SOME IMPLICATIONS
• Will induce changes in what is produced where and how, and what is
traded and how
• Will increase frequency of shocks to production, productivity, and hence
trade flows
• Some countries may be tempted to use trade policy measures to deal
with “carbon leakage”, e.g. through border tax adjustments
9
I. CLIMATE CHANGE: SOME IMPLICATIONS
• Dealing with private standards: convergence or equivalence; need for
technical and financial resources
• Dealing with new “regulations”: negotiations, disputes, adoption
• WTO: using the existing agreements and provisions; negotiations on
environmental goods and services
10
I. GLOBAL VALUE CHAINS: SOME IMPLICATIONS
• Innovation/conception-production-marketing networks spread across
countries, firms, and goods and services
• Lengthening of supply chains with greater fragmentation of tasks:
growing trade in intermediate goods and services
• Inducing changes in the way trade flows are measured
• Participation in global value chains as an opportunity to trade out of
under-development and poverty
11
I. GLOBAL VALUE CHAINS: SOME IMPLICATIONS
Where in the Value Chain Matters
12
I. GLOBAL VALUE CHAINS: SOME IMPLICATIONS
• Impact on multilateral trade negotiations: “re-think” of trade flows and
their origins as trade in tasks with incremental values being added at
each stage, located in different countries
• Governance of private standards: e.g. for agro-industrial value chains
where compliance is costly and is a constraint for SMEs
13
I. INNOVATION AND TECHNOLOGY: SOME IMPLICATIONS
• Current gap between developed and developing countries
• A key determinant of productivity enhancement
• Contribution to economic growth and development
• Importance of technology transfer
• In-built flexibility in the MTS to adapt to technological developments to
maximise their contribution to trade and development
14
II. EMERGING ISSUES AND MULTILATERAL
TRADING SYSTEM: A DEVELOPMENT PERSPECTIVE
Performance of the MTS: Current
• Regular functions: reasonable though limited developing country
participation
• Negotiations: Doha Round stalled but important developments must be
preserved
• Dispute settlement: reasonable though very limited developing country
participation
• Discussions: increasing but remain limited
• Development: gap between rhetoric and reality
15
II. EMERGING ISSUES AND MULTILATERAL
TRADING SYSTEM: A DEVELOPMENT PERSPECTIVE
Performance of the MTS: Emerging Issues
• Dealing with emerging issues: whether and how (mandate and manner)
• New negotiations: mandate needed which should be based on the core
competence of the WTO and the interests of all its Members
• Doha Round and regular WTO work: some issues can be addressed
• Dispute settlement: may become the default option
• Discussions: expect and prepare for more
16
II. EMERGING ISSUES AND MULTILATERAL TRADING
SYSTEM: A DEVELOPMENT PERSPECTIVE
International Trading System
17
II. EMERGING ISSUES AND MULTILATERAL
TRADING SYSTEM: A DEVELOPMENT PERSPECTIVE
• Strengthening vertical links: MTS should reflect grassroots' aspirations
and concerns, and aim for development outcomes
• Finding horizontal links: MTS is only a part of the system of global
economic governance and hence should let specialised institutions deal
with issues under their respective mandates/competences while
collaborating as appropriate
18
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Objectives
• An equitable and well functioning system of global economic
governance with a development-oriented MTS
• Strengthening vertical links and finding and implementing suitable
horizontal links
• Coordinated and strategic actions at the national, regional, ACP and
multilateral levels
19
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the National Level
• Technical, human and institutional capacity building
• Regular and systematic Inter-ministerial coordination and multi-stakeholder
consultations
• Investing in human resources development, renewables, and innovation
• Strategic relationships with regional partners, emerging economies, and
developed countries
• Sustainable management of natural resources, including through better
negotiations
20
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the Regional Level
• Enlarging regional economic spaces through own FRTAs
• Common strategies to deal with emerging issues
• Developing new and development-friendly rules to deal with emerging
issues
• Preparing for better participation in the MTS
• Careful and coordinated negotiation of RTAs with developed countries
and emerging economies
21
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the MTS
Preserving useful gains of Doha Round
• SP and SSM (food security)
• Hybrid approach to environmental goods and services (environment and
climate change)
• Commitments for technical and financial assistance
• Measures to deal with preference-erosion
• Situation-based approaches to commitments, e.g. paragraph 6 in
NAMA, differentiated commitments by SVEs, RACs, etc.
22
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the MTS
Improving participation in Regular Bodies
• Sectoral Councils and Committees (e.g. CTG, CTE, CTD, CTS, TRIPS):
brining up emerging issues of interest and safeguarding against entry of
emerging issues from the back door
• Technical Committees (e.g. SPS, TBT): raising and dealing with technical
issues related to emerging issues where needed
• TPRB: making strategic use of the opportunity
• All Bodies: monitoring for the implementation of the existing
commitments by trading partners
23
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the MTS
Safeguarding interests through DSU
• Monitoring developments: on-going consultations, cases, outcomes and
their implications
• Strategic participation: as third parties and as complainants
• Reform: participation in DSU review negotiations
24
III. WAY FORWARD: SOME SUGGESTIONS FOR
DEVELOPING COUNTRIES
Actions at the MTS
Initiating and responding to discussions
• Making use of Regular Bodies
• Organisation of dedicated seminars and workshops on selected
emerging issues
• Joint events with other relevant international organisations
• Working with like-minded and development-friendly NGOs
25
THANK YOU.
QUESTIONS AND COMMENTS ARE WELCOME
26