Trade Policy Note Final-rev08 - Development

Tigers), has not followed the Bretton Woods model. These countries have applied a set of
“tools” to protect infant industries, obtain advanced technologies and penetrate world markets
that had been available under the more flexible GATT. These are now severely constrained
under the WTO. Some of these countries were never GATT contracting parties and only
recently acceded to the WTO. The intensified disciplines under the WTO have reduced the
policy space available to other countries and precluded the possibility of their emulating some
of the strategies which had proven successful earlier.
Second, the pursuit of ever more stringent trade disciplines did not take into account the
potential conflict with other development objectives, particularly those aimed at improving
the living conditions of poorer people in developing countries as set out in the MDGs. In one
dramatic case, the Declaration on TRIPS and Public Health had to be introduced in Doha to
literally save people’s lives. Beginning most dramatically at the 1999 Seattle WTO
Ministerial Conference, some governments and civil society groups have challenged the goals
of the ongoing negotiating process, drawing attention to a serious conflict between the goals
of evermore intrusive and extensive trade disciplines and the need for policy space to pursue
pro-poor policies such as food and livelihood security (agriculture), universal access to basic
services, access to technology (services) and traditional community interests (TRIPS). There
has been a growing democratization of trade policy formulation in both developed and
developing countries. A wider range of stakeholders have demanded that their vital interests
be protected and have rejected a secretive negotiation process. They have also observed that
with the establishment of the WTO, the multilateral trading system has also extended its
“frontiers” into policy areas where international consensus had been reached in other
organizations such as the FAO, UNESCO and WHO.
Third, the commitment of the major trading countries to the multilateral trading system has
declined, as they have pursued the negotiation of reciprocal FTAs with developing countries
that had previously enjoyed unilateral preferential access to their markets. Furthermore, the
return to bilateralism has also reflected a resurgence of political considerations in trade
relations, precisely what the post-war GATT system had been set up to avoid. 12 FTAs
exacerbate the difficulties described above, as they often totally eliminate any policy space
that developing countries may have succeeded in defending in the WTO. They represent a
negotiating process that is more political, less transparent and less likely to be based on
national consensus than the multilateral trade regime.
The most important decisions relating to policy space to be faced by policy makers in the
WTO multilateral trade negotiations relate to (a) measures to protect food security (Section
5), (b) preservation of flexibility in industrial tariff negotiations (Section 3), and (c) response
to formula approaches for commitments on trade in services (Section 6). However, by far the
greatest overall challenge lies in devising a response to the proliferation of FTAs (Section
10), which cover all issues addressed in this Policy Note.
Market Access Objectives:
- elimination of agricultural export subsidies and meaningful reduction of
production subsidies, including with respect to all “boxes”, a significant increase
in TRQs maintained by developed countries or the elimination of over quota tariff
rates;
12 VanGrasstek, Craig, “U.S. Policy Towards Free Trade Agreements: Strategic Perspectives and
Extrinsic Objectives ”, UNDP Asia Trade Initiative on Trade and Human Development, Phase 1,
technical support document (Hanoi: 2003) (available at
www.undprcc.lk/Publications/Publications.asp?C=4).
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