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

5 Conclusion

International economic relationships are constituted in large part by international trade and investment. I have argued that the current trade regime, apparently one of voluntary adherence to negotiated rule-making, is actually systematically weighted against the needs of developing countries. This asymmetry is rooted in a context where rich countries are eager to prescribe free trade for others but reluctant to impose it on themselves and able to avoid doing so. Its consequences are exacerbated in many developing countries by the social dislocation that trade liberalisation has caused.

The current world trade regime has a mixed record in promoting growth and reducing poverty. Developing countries furthermore are being pressured to forego the right to implement policies that the developed countries used to attain their present level of affluence, and are being forced instead to set up institutions and implement standards that have historically emerged at a much later stage of development in the West.

In September 2003, the Ministerial Conference of the WTO at Cancun (Mexico), which was due to have taken the Doha agenda forward, collapsed without any agreement, largely because of determined and united opposition from developing countries. On a positive note, in an agreement that was hammered out on the eve of the conference, the USA finally agreed to allow developing countries that lack the capability to produce patented drugs to acquire cheaper emergency supplies by granting compulsory licences to manufacturers in other developing countries. But two of the issues discussed in this course proved to be the rocks on which the conference foundered. First, the developed countries obstinately refused to make meaningful reductions in their escalating agricultural subsidies, even as they tried to get the developing countries to reduce their tariffs on agricultural products. Something that received much publicity was the observation that each cow in the EU is subsidised to the tune of over two US dollars a day, which is more than the daily earnings of over a billion poor people in developing countries. The second deal-breaker was the attempt by the EU to load new issues (notably rules governing international investment and competition policy, as mentioned briefly on page 9 of this course) onto the agenda, against the wishes of most of the developing countries, who argued that they did not fully comprehend the implications. It is not all clear what, if anything, can be salvaged from the Cancun wreckage. Is there any wonder, then, that developing countries are less than enthusiastic about the WTO?


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