The WTO and Su Development

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Specialist economic arguments such as: strategic trade policy or, from the development literature, the infant industry argument.

Pascal Lamy

These arguments are dubiously regarded at present, the infant industry, in particular, has been much criticized over the last thirty years. The miscellaneous rag bag: basic nationalism to more measured concerns for self-sufficiency e. Conclusion: There are good reasons to support free trade and few decent reasons to oppose it.

Consider the following situation: two countries A and B who can trade.


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Say country A can impose a tariff on B and vice versa. Consider the following further assumptions for sake of this discussion these are assumptions but they are likely to be reasonably accurate.

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The numbers in brackets indicating welfare outcomes for A and B respectively. The danger is that both countries think they gain from tariffs but crucially this is in the absence of the other country doing the same thing. If they both impose tariffs they restrict trade and the choice open to their citizens while gaining no more of the share of the trade themselves 1. Thus they both end up worse off than they were to start with.

Joint Communiqué of the Ottawa Ministerial on WTO Reform - puzuwyzyxo.cf

What is the solution? The obvious one is to create an institution that will help maintain the cooperative equilibrium that maximises joint welfare.


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This institution will also facilitate returning to this equilibrium should problems arise. The institution would have the further advantage of reducing the ability of special interest groups in a country manipulating trade policy to their advantage see 1. Antonio Patriota. However, on the eve of Nairobi, Brazil unilaterally abandoned the G20 alliance to join US and EU, in trying to act against China and India, and in time will find it "a costly error.

Shorn of verbiage, and self-praise of the WTO's achivements in its years virtually miniscular, if not nil, visavis the developing nations, and the billions of their poor and hungry , the core of the Nairobi Ministerial Declaration is in paras 30, 31 and And the three paras merely reflect the existing deep divisions within the membership, including on the DWP and its Single Undertaking, where negotiations are at an impasse.

There is no roadmap or agreed way forward out of Nairobi on the impasse.

Former Executive Director at World Trade Organization (WTO)

However, its status as a Single Undertaking or SU legal concept has been considerably diminished, though not altogether buried for good. There is still some scope to retrieve ground lost and uphold its single undertaking character. The text in para 31 of the NMD, notwithstanding the disagreement on that score in the text of para 30, gives scope to breath some life into the SU.

Undoubtedly, there is a bit of a contradiction between paras 30 and The real problem for developing countries is that they gave up the single most effective leverage they had in the negotiations by conceding at Bali the TFA as an separate accord, and agreed at Geneva in to a protocol for its incorporation into WTO Annex I-A, without resolving other issues of concern to them or tying it into the SU.

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However, if developing countries don't band together NOW to enforce the SU nature of the mandate of the Doha Declaration, the developed countries would have managed to change the basic character of the Multilateral Trade System as it has been known since when GATT came into being as a provisional agreement, arising out of the Havana Charter. If China-India-South Africa at least now do not stand together, and mobilise other developing countries, particularly in Asia and Africa, against the neo-mercantilist onslaughts of the US and EU, they would have betrayed their people.

If the WTO and its MTS are allowed to take on the new "shape" that the US and EU, and their media shills are now pushing, the major players will only pick up issues of interest to them one by one from now onwards. And one more nail would have been hammered into the coffin of the post-War Order, an order whose principal pillars in the UN Charter and System, the US and EU have been so busy dismantling in their regime change interventions around the world in the Middle East, Eastern Europe and elsewhere. For, in this twentyfirst century, no trade and investment rights can be enforced anywhere through exercise of military power or gunboat diplomacy, unlike in the 18th and 19th centuries, but only through international accords - negotiated, concluded and implemented in good faith.

At the WTO, this last has been lacking on the part of the US, EU and the secretariat acting to promote their interests, rather than that of the membership as a whole.

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Developing countries thus have to ensure that no consensus gets developed at WTO, in Geneva, on new issues, either taking them up for study or on the agenda at the General Council, or negotiations allowed to begin at the WTO by not giving their "unanimous agreement", as stipulated in the last sentence of para 34 of the NMD , until the successful conclusion of the DWP agenda. They also have to resist the temptation to get their issues addressed by paying a further price for them through new issues.

Developing nations have paid enough since Marrakech to the US, EU and its coat-tail allies, whether in developed or developing nations. They have to use their leverage in the various processes in Geneva, including budget processes, to call the secretariat to order, and ensure they do not continue with their partiality and advocacy role on behalf of the United States.

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Opinion Type:. Sessione plenaria:. Commercio internazionale.

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