Trade Policy Note Final-rev08 - Development

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extended trade obligations into new areas such as national policies on services (e.g. finance, communications, energy, environment, culture, immigration, transportation, health and education) and intellectual property rights. Those countries which have acceded to the WTO after its establishment find themselves subject to even greater constraints, as the major trading countries have followed a policy of seeking maximum, “WTO plus” concessions in their terms of accession. Box 1: Terms of Accession 3 Countries that have acceded to the WTO have been obliged to accept WTO-plus obligations and commitments as part of their terms of accession. These have included across the board tariff bindings often at low rates, extensive commitments on trade in services, going far beyond those made by developing countries in the Uruguay Round, lack of recourse to permitted TRIMs (e.g. on transfer of technology), abolition of export taxes, little or no recourse to special safeguards inn agriculture, additional commitments on energy prices in excess of the normal WTO disciplines on subsidies, no access to export subsidies even when their GDP is less than $1000. Furthermore, some acceding countries have been denied full WTO rights based on the argument that they are still in the category of “non-market economies” Acceding countries have more recently obtained recognition that the extensive commitments contained in their term s of accession should be taken into account in multilateral trade negotiations. This has constricted the policy space available to developing countries to pursue development strategies. 4 The WTO Doha Development Round aims at continuing the process of liberalization with tighter disciplines. However, it also provides the opportunity for developing countries to address difficulties encountered in the implementation of the Uruguay Round results. Some FTAs are More Constraining All developing countries have been caught up in the proliferation of FTAs, both with other developing countries (South/South) and between developed and developing countries (North/South). Some of these manifest a more ambitious approach by developing countries to the pursuit of the traditional objective of regional integration. Others, however, are extra-regional, reflecting strategies of individual countrie s to seek privileged market access conditions which they consider cannot be achieved in multilateral negotiations. For certain developed countries, the negotiation of bilateral FTAs with developing countries has a highly political motivation. It also manifests a strategy on their part of imposing tighter and more extensive disciplines on their trading partner than can be achieved, at least in the near future, in the WTO, or to consolidate positions they are pursuing multilaterally vis-à-vis other major players in the WTO. Major trading countries are also involved in the pursuit of geopolitical objectives through some bilateral and regional trade negotiations, while smaller 3 See, for example, UNCTAD, WTO Accessions and Development Policies (New York and Geneva: 2001). An acceding country is in a much weaker position under the WTO than it was previously under GATT, where the possibility of invoking the non-application clause was excluded once bilateral negotiations had been engaged. 4 UNDP et al., Making Global Trade Work for People (London and US: Earthscan, 2003) (www.earthscan.co.uk). 12
countries struggle to ensure that their vital sectoral interests are protected. 5 The implications of such FTAs for development are discussed in Section X. Box 2: Frontiers of the Trading System Considerations of policy space should bear in mind that there has been a recent tendency for multilateral and bilateral trade agreements to overstep the “frontiers” of the trading system. As a result, governments find that their trade commitments may conflict with other instruments and commitments based on consensus , established in other international forums, which they have accepted. These include the Convention on Biodiversity, the FAO Treaty on Plant Genetic Material, the UN Convention on the Protection of Cultural Contents and Artistic Expression, the Johannesburg Sustainable Development Plan of Action, the Rome Declaration on Food Security and the Global Strategy on Health for All. To carry the analogy further, WIPO accepted that the whole set of intellectual property instruments would be incorporated into the WTO TRIP S Agreement as this gave them more “teeth” under the WTO dispute settlement mechanism. On the other hand, there has been considerable resistance from WHO and UNESCO to subjecting what are seen as fundamental rights to health, education and cultural identity to trade disciplines. The FAO, on the other hand, is actively preparing technical papers on issues related to its central goals, such as food security. The “frontiers” between the WTO rules and the Multilateral Environmental Agreements (MEAs) are currently being defined under the Doha mandate. 6 The inclusion of labour standards was not accepted. Development Strategies and Trade Negotiations This new emerging trading system imposes rules on the exercise of trade policies (in the broadest sense) both through general obligations , which apply to all WTO members, and specific commitments that individual countries have accepted. All developing countries are being subject to intense pressures to enter into additional binding commitments, at multilateral, regional, sub-regional and bilateral levels, to liberalize trade and investment and accept intrusive disciplines over an ever widening scope of development policy areas. Governments in developing countries will need to make major decisions on the extent they are willing to constrict policy options in order to gain trade benefits. The dilemma they face is on how to preserve development strategies in the context of multiple negotiations with regional and extraregional, developed and developing partners. A prerequisite to participating in trade negotiations should be a clear definition of a pro-poor national trade and development policy. Such policy should be aimed at ensuring that the poor do not inordinately bear the burden of adjustment, but maximize the benefits from trade liberalization and trade disciplines. The pursuit of three complementary and mutually supportive goals, on (a) an industrial policy based on tariffs, investment and services, (b) a proactive attack on barriers to exports 5 See Gibbs, Murray and Swarnim Wagle, with Pedro Ortega, The Great Maze: Regional and Bilateral Free Trade Agreements in Asia, UNDP Asia Pacific Trade and Investment Initiative (Colombo: 2005) (http://www.undprcc.lk/Publications/Publications/Great_Maze_-_FTA_-_completed.pdf). 6 See WTO document, “Matrix on Trade Measures Pursuant to Selected MEAs”, WT/CTE/W/160/rev.1, 14 July 2001 (www.wto.org). 13
Page 1 and 2: NATIONAL DEVELOPMENT STRATEGIES POL
Page 3 and 4: Preface The outcome document of the
Page 5 and 6: A “New Generation” of Bilateral
Page 7 and 8: TNCs TRIMs TRIPS TRQ UNCTAD UNESCO
Page 9 and 10: The case and options for widening t
Page 11: outcomes are less clear. Moreover,
Page 15 and 16: Goal B : to empower people to becom
Page 17 and 18: Tigers), has not followed the Brett
Page 19 and 20: III. TARIFFS AND INDUSTRIAL POLICY
Page 21 and 22: across the board tariff bindings. F
Page 23 and 24: Such tariff policy should ensure th
Page 25 and 26: Export duties can also be an elemen
Page 27 and 28: IV. EXPORTS AND POVERTY Can develop
Page 29 and 30: Increase Productivity Exports shoul
Page 31 and 32: Box 14: Export Policies and WTO and
Page 33 and 34: percent of domestic consumption) wa
Page 35 and 36: developing countries with a few not
Page 37 and 38: Different products emerge at the to
Page 39 and 40: safeguard measures on agricultural
Page 41 and 42: suppliers in the domestic market fo
Page 43 and 44: Investment Policy is Central to Tra
Page 45 and 46: water and sanitation. Sustainabilit
Page 47 and 48: traditionally done in trade in good
Page 49 and 50: Mode 1 service exports, often terme
Page 51 and 52: It is now incumbent on developing c
Page 53 and 54: commercial value to their tradition
Page 55 and 56: The Proliferation of FTAs Over rece
Page 57 and 58: services liberalization in these ag
Page 59 and 60: copyright protection may be extende
Page 61 and 62: (q) SPS and TBT. Within the framewo
Page 63 and 64:
Market Access Even after the abolit
Page 65 and 66:
were established almost exclusively
Page 67 and 68:
Annex 3B: Fisheries, Putting the pr
Page 69 and 70:
also enshrined in the Code of Condu
Page 71 and 72:
poorest people. 140 Governments in
Page 73 and 74:
Annex 5B: Energy services Attainmen
Page 75 and 76:
Box 25: Strategies for Strengthenin
Page 77 and 78:
On the contrary, a sharp decline ha
Page 79 and 80:
small farmers find themselves left
Page 81 and 82:
A number of developing countries ar
Page 83 and 84:
Commission on Intellectual Property
Page 85 and 86:
Mathew, Sebastian (2003). Trade in
Page 87 and 88:
UNDP (2005). Human Development Repo
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Trade Policy Note Final-rev08 - Development

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