Developing countries in the world trade regime
Developing countries in the world trade regime

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Developing countries in the world trade regime

1.2 Developing countries

Question

Which countries in the world are classified as ‘developing countries’?

There are various definitions of ‘developing countries’, none entirely satisfactory. The WTO allows members to classify themselves as developing, and lists some 30 of them as ‘least developed’ (poorest) members for special treatment. For the purpose of this course, it would be simplest if you were to think of developing countries as comprising all countries other than the USA, Canada, the countries of Western Europe, Singapore, Japan, Australia and New Zealand. So of the 145 WTO members (as of 2002), over a hundred are developing countries. Their gross national incomes (GNI) per head (a crude but common measure of economic development) ranged in 2000 from around $500 a year in the least developed countries such as Sierra Leone and Tanzania to around $8000 in typical ‘upper middle income’ countries such as Malaysia. By way of comparison, the United Kingdom figure was $23,550, Japan $26,460 and the USA $34,260 (World Bank, 2002, pp. 232–3).

I shall argue in this course that many of the benefits these developing countries were promised would follow from joining the WTO have so far proved illusory, because of loopholes in the agreements. In particular, they expected that signing on would enable them to get better access for their major exports in the markets of the developed countries, and an impartial mechanism for settling disputes with them. We shall see that things did not quite work out that way. There were also large costs in complying with the rules, some of which could have been foreseen, and others which became apparent only after the ink was dry and the developing countries were faced with implementing agreements that they perhaps did not fully comprehend. And if you are already asking why they do not just quit, the answer is that cutting themselves off from the international economy is likely to be even worse. In an unequal world, being a junior member of the gang is often better than being excluded altogether. After reading this course, I hope you will understand why developing countries find themselves in this predicament.

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