Developing Countries and the World Trade Organization Negotiations (original) (raw)
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This paper aims at providing an analytical examination of the criticism that the WTO is unfair and hurts the weak, developing countries. We utilize a formal model with the following features: in both the powerful and the weak economies, pressure groups lobby to influence their trade policies in their respective countries. We then allow the powerful country the exclusive ability to spend resources to facilitate the lobbying of one of the pressure groups in the weak country, thereby moving the trade policy of the developing country in favor of the powerful trading partner. Next we compare the effects of asymmetric foreign influence in a world with no WTO and no multilateral principles (most-favored- nation principle, MFN, and the negotiation principle of reciprocity) to a situation with WTO and its associated non-discrimination principles. We show that the weak, developing country will have fewer ‘unfair’ concessions of market openings and in general will be better off with the WTO and with rules of non-discrimination.
Special and Differential Treatment of Developing Countries in the WTO
SSRN Electronic Journal, 2000
In this paper, we examine the theoretical rationale for WTO rules on the special and differential treatment (SDT) of developing countries. We describe a model of bilateral trade between a small country and a large trading partner, in which the small country suffers from a domestic commitment problem in trade policy. This problem arises because investors in the import-competing sector lobby the government to enact and maintain protectionist policies. We show that a reciprocal trade agreement, in which the large country lowers its tariffs conditionally on the small country doing the same, creates a "carrot and stick" mechanisms that helps the small country to overcome its commitment problem. If capacity in the import-competing sector can only be reduced gradually, the agreement may need to allow the small country to delay the implementation of its trade liberalization commitments, in line with SDT provisions in the WTO. Our analysis suggests that, if reconciled with the principle of reciprocity, SDT can help developing countries to liberalize and improve their trading prospects.
Developing Countries and Their Participation in the WTO in Making Trade Policy - An Analysis
2005
Trade and investment are of paramount importance to achieve sustainable development thereby eradicating poverty. Developing countries were strongly arguing on this issue. Their argument emanates from the fact that the terms of trade between the developing and developed countries are unfair. All the developing countries realized that they needed the WTO to negotiate export market access particularly in highly protected sectors like agriculture and textiles, and to defend themselves against non-tariff protection from developed countries. The developing countries constitute for a four-fifths in the WTO, only a small minority are active in it. Weak participation in the WTO is largely a reflection and extension of policy-making deficits at home. In line with this they are participating in WTO and redesigning their trade policies in enhancing the domestic trade and contribute for the global trade. This article explores the GATT/WTO policies and their impact on the trade and development of...
Developing Countries and the Jurisprudence of the WTO
Caribbean Dialogue, 2012
Developing countries have a particularly hard time ahead in the negotiating agenda on the reform of international trade. In a sense they are committed to fight against the tide of free trade and the principles enshrined therein: most favored nation status, which means that the most favorable terms given to any party must be extended to all, and the rule on national treatment, which means that the concessions extended to locally produced goods and services must be extended to foreign counterparts. The apprehension that the undiluted application of these principles is a road to disaster has strengthened the search for exceptions; the danger is that this can put developing countries on the defensive, as can be gleaned from the very name of the exceptions: Special and Differential Treatment, Preference, Waivers. Thus, they may find themselves in the position of always having to make the case, or worse, of seeming eccentric, even perverse, especially in the light of the view that the ap...
A Critical Examination of the effects of World Trade Organization on the Developing States
This study examines the effects of WTO on developing states. The thesis of the essay is that whereas WTO performs an important role in managing world trade, its benefit are not evenly distributed. The study shows that since its inception WTO is decision-making structures are dominated by developed states which use their clout to protect their interests. The study suggests that unless reforms are undertaken, developing states have little chance of gaining equally as rich states.
The World Economy, 2005
Negotiations on industrial tariffs in the current WTO have turned out to be surpisingly more difficult than expected. On the one hand, developing countries, particularly in Africa, are concerned about the effect on their industrial development of developed country efforts to push them into deep cuts in applied tariffs:after the disillusion of the Urguay Round, promises of welfare gains seem like buying one of Akerloff's lemons. On the other hand, a number of the more complex formula proposals for tariff-cut ting make it difficult to evaluate the mercantilist equation: how does what one has to do measure up against what one might expect from others? The negotiations present an important opportunity to address the bias in protection against developing countries' exports. The developing countries are promised greater exports and welfare gains from the more ambitious proposals, but computations show that these also imply greater imports, lower tariff revenues, some labour market adjustments and reduced output, t hreatening key sectors in some developing regions. Preference losses, while moderate in the aggregate, seem quite significant in some cases. Some way of assisting the developing countries in coping with these adjustments would make the negotiations seem a little less like "Trick or Treat?" although proposals for Bank-Fund "facilities" to aleady indebted countries to meet new WTO obligations may not be the highest development priority.