Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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Tigers), has not followed the Bretton Woods model. These countries have applied a set of<br />
“tools” to protect infant industries, obtain advanced technologies and penetrate world markets<br />
that had been available under the more flexible GATT. These are now severely constrained<br />
under the WTO. Some of these countries were never GATT contracting parties and only<br />
recently acceded to the WTO. The intensified disciplines under the WTO have reduced the<br />
policy space available to other countries and precluded the possibility of their emulating some<br />
of the strategies which had proven successful earlier.<br />
Second, the pursuit of ever more stringent trade disciplines did not take into account the<br />
potential conflict with other development objectives, particularly those aimed at improving<br />
the living conditions of poorer people in developing countries as set out in the MDGs. In one<br />
dramatic case, the Declaration on TRIPS and Public Health had to be introduced in Doha to<br />
literally save people’s lives. Beginning most dramatically at the 1999 Seattle WTO<br />
Ministerial Conference, some governments and civil society groups have challenged the goals<br />
of the ongoing negotiating process, drawing attention to a serious conflict between the goals<br />
of evermore intrusive and extensive trade disciplines and the need for policy space to pursue<br />
pro-poor policies such as food and livelihood security (agriculture), universal access to basic<br />
services, access to technology (services) and traditional community interests (TRIPS). There<br />
has been a growing democratization of trade policy formulation in both developed and<br />
developing countries. A wider range of stakeholders have demanded that their vital interests<br />
be protected and have rejected a secretive negotiation process. They have also observed that<br />
with the establishment of the WTO, the multilateral trading system has also extended its<br />
“frontiers” into policy areas where international consensus had been reached in other<br />
organizations such as the FAO, UNESCO and WHO.<br />
Third, the commitment of the major trading countries to the multilateral trading system has<br />
declined, as they have pursued the negotiation of reciprocal FTAs with developing countries<br />
that had previously enjoyed unilateral preferential access to their markets. Furthermore, the<br />
return to bilateralism has also reflected a resurgence of political considerations in trade<br />
relations, precisely what the post-war GATT system had been set up to avoid. 12 FTAs<br />
exacerbate the difficulties described above, as they often totally eliminate any policy space<br />
that developing countries may have succeeded in defending in the WTO. They represent a<br />
negotiating process that is more political, less transparent and less likely to be based on<br />
national consensus than the multilateral trade regime.<br />
The most important decisions relating to policy space to be faced by policy makers in the<br />
WTO multilateral trade negotiations relate to (a) measures to protect food security (Section<br />
5), (b) preservation of flexibility in industrial tariff negotiations (Section 3), and (c) response<br />
to formula approaches for commitments on trade in services (Section 6). However, by far the<br />
greatest overall challenge lies in devising a response to the proliferation of FTAs (Section<br />
10), which cover all issues addressed in this <strong>Policy</strong> <strong>Note</strong>.<br />
Market Access Objectives:<br />
- elimination of agricultural export subsidies and meaningful reduction of<br />
production subsidies, including with respect to all “boxes”, a significant increase<br />
in TRQs maintained by developed countries or the elimination of over quota tariff<br />
rates;<br />
12 VanGrasstek, Craig, “U.S. <strong>Policy</strong> Towards Free <strong>Trade</strong> Agreements: Strategic Perspectives and<br />
Extrinsic Objectives ”, UNDP Asia <strong>Trade</strong> Initiative on <strong>Trade</strong> and Human <strong>Development</strong>, Phase 1,<br />
technical support document (Hanoi: 2003) (available at<br />
www.undprcc.lk/Publications/Publications.asp?C=4).<br />
17