GOVERNMENTAL ORGANIZATIONS (NGOS): SYMPOSIUM
Symposium on issues confronting the world trading system —summary
reports by the moderators
and 7 July, World
Trade Organization, Geneva, Switzerland
III: Trade & Development
David Runnalls — President, IISD
is a motor for growth, and trade liberalisation and openness can
be and is a key part of development policies. However, unlike
sustainable development, trade liberalisation is not an end in
and openness do not in themselves automatically lead to
desirable growth and poverty outcomes. Lessons of experience,
and particularly the mixed experience of a number of trade
liberalisation efforts, show that trade policy needs to be one
part of an overall set of integrated and mutually reinforcing
development strategies, including social safety nets.
order to achieve the broad-based development that will be both
sustainable and lead to poverty alleviation, it is necessary to
improve the quality of governance and introduce comprehensive
social and sectoral policies, including those that address
environmental issues. Investment in infrastructure and human
capital, attention to the distribution of assets, and sound
macroeconomic management are also necessary.
question was raised as to whether quantitative studies of the
impact of trade liberalisation adequately captured dynamic
effects, especially on natural and environmental capital. The
erosion of such capital creates costs which may in some cases
offset the gains from liberalisation. This points to the need
for complementary and well sequenced trade and environmental
policy reforms and other policy endeavours must be properly
sequenced, and adjustment costs need to be addressed. Views
differed as to the appropriate speed of liberalisation..
Development strategies need to respond to country specificities,
and the policy-making process should be display ownership and
countries, especially developing countries, have an interest in
multilateral trade rules. These should be equitable, and should
facilitate the pursuit of development objectives.
countries' experience of the implementation of multilateral
rules have often proved difficult and onerous, and expected
benefits have not always materialised.
the same time, the implementation of WTO agreements by developed
countries in areas of special interest to developing countries
is inadequate. The Agreement on Agriculture, the Agreement on
Textiles and Clothing, and the TRIPS Agreement were cited as
examples. The structure of the Agreement on Agriculture favours
developed countries, which have the resources to use it over
view was expressed that WTO rules should provide greater policy
flexibility for developing countries. It has also been pointed
out that developing countries do not, or cannot, always avail
themselves of existing flexibility.
access continues to play a critical role in determining trade
and development outcomes. Tariff peaks and tariff escalation
penalise the exports of developing countries in key areas of
export interest, notably agriculture and textiles and clothing.
export subsidies create difficulties for food production and
security in developing countries, and should be phased out.
Several raised the issue of the long term secular decline in
commodity prices, leading to desperation production with its
harmful economic and environmental effects.
in developing countries is also important. Although developing
countries have undertaken substantial autonomous liberalisation
efforts, overall, levels of protection remain higher in
developing countries than in developed country markets.
Developing countries have also generally bound tariffs at higher
levels than their applied rates, which tends to reduce the
predictability and stability of reforms, and can act as a
disincentive to investment.
Direct Investment patterns are uneven, with the majority flowing
to less than a dozen developing countries. A number of factors
affect locational decisions by investors, and not all of them
can be influenced by policy makers. Investment plays a crucial
role in enhancing trade and growth prospects. Policies to
mobilise domestic savings and investment are essential. Some
felt that greater flexibility in formulation and application of
WTO rules was necessary to facilitate this process.
differ on the need for and scope of a new trade round.
Implementation is a key element. There should be a "downpayment"
on implementation issues prior to the expansion of the
negotiating agenda. Some felt that implementation issues should
also have priority within a round. Development concerns and
priorities should be fully integrated into any new rules. Peaks
and escalation, and contingent trade remedies, are all important
agenda items for new trade negotiations. The view was also
expressed that new trade rules should address issues relating to
market structure and corporate power.
question of trade and labour standards was raised, and one view
was that there should be a working group on trade and labour
standards in the WTO. The alternative view was that trade and
labour issues were more properly addressed in a joint ILO-WTO
access gains through trade liberalisation provide opportunities,
but do not guarantee sales. Developing countries often face
supply side constraints, including human and institutional
constraints, that prevent them from seizing these opportunities.
of human and institutional capacity in developing countries also
constrains their ability to negotiate and implement WTO
agreements. There is a pressing need to address these problems
in a comprehensive way. The outcomes of the Uruguay Round could
have been improved had negotiations and capacity-building been
carried out in tandem. This must be a critical component of a
new round. Some, however, expressed the view that there was no
need for a new round of negotiations while others stated that
for them, a new round was a priority.