Developing Countries and Global Trade Negotiations

Larry Crump, S. Javed Maswood

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781134114764
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The Doha Round of WTO negotiations commenced in November 2001 to further liberalize international trade and to specifically seek to remove trade barriers so developing countries might compete in major markets.

This book brings together an international team of leading academics and researchers to explore the main issues of the Doha Round trade negotiations, such as agriculture, pharmaceuticals and services trade. In particular, it looks at how the formation of the G20 has complicated negotiations and made it harder to balance the competing interests of developed and developing countries, despite rhetorical assertion that the outcomes of this Round would reflect the interests of developing countries. The authors examine both how developing countries form alliances (such as the G20) to negotiate in the WTO meetings and also explore specific issues affecting developing countries including:

• trade in services
• investment, competition policy, trade facilitation and transparency in government procurement
• TRIPS and public health
• agricultural tariffs and subsidies.

Contributing to an understanding of the dynamics of trade negotiations and the future of multilateralism, Developing Countries and Global Trade Negotiations will appeal to students and scholars in the fields of international trade, international negotiations, IPE and international relations.

1 Growing power meets frustration in the Doha round’s first four years

John S. Odell

Developing country governments obviously face a highly skewed power structure in multilateral trade negotiations, but they greatly increased their preparation, organization, and active participation after the Uruguay round (UR) and creation of the World Trade Organization (WTO) in 1995. More governments reinforced or established missions in Geneva. In 1999, during preparations for the WTO’s ministerial conference in Seattle, developing countries voiced concerns and injected dozens of formal proposals into the negotiation process. This participation explosion drew in many small trading countries that had been passive or not signatories at all prior to 1994. The European Union was attempting to convince others to launch another major round of liberalizing negotiations. Seattle was a debacle, however, and some developing country ministers publicly denounced the United States and the WTO for the way they had been treated.

At their next conference in Doha, Qatar on 14 November 2001 the ministers did agree to launch a new round, the “Doha Development Agenda.” They pledged to “place [developing countries’] needs and interests at the heart of the Work Programme adopted in this declaration” (WT/MIN(01)/DEC/W/1). To add credibility to their commitment, they used the expressions “least developed” countries 29 times, “developing” countries 24 times, and “LDC” 19 times (Panagariya 2002).

The work program was daunting. It encompassed no fewer than 19 technical issues, each reflecting major differences between states that would have to be bridged. In addition, the ministers adopted a separate decision on 12 implementation-related issues and a special declaration interpreting the TRIPS agreement on questions of public health, both in response to developing country demands. Ministers set themselves the deadline of 1 January 2005 for completing the round, and they set interim deadlines for steps along the way: a plan for WTO technical assistance was due by December 2001; a solution for legal problems of developing countries that lacked capacity for making medicines was to be reached by the end of 2002; modalities for agricultural commitments were to be agreed by March 2003; in services, initial requests were due by June 2002 and initial offers by March 2003; and improvements to the Dispute Settlement Understanding were to be finished by May 2003.

At the end of the planned three years, however, member states had agreed to almost nothing on the Doha agenda. Delegations and chairs of negotiating bodies had made many proposals to one another, but they missed one interim deadline after another, as some held one issue hostage until seeing greater concessions on another issue. There was significant movement from opening positions, and elements of a provisional deal were set provisionally. But after major players deadlocked over remaining key elements, the Doha round was suspended indefinitely in July 2006. Several parties expressed a preference to revive the talks, but the future was unclear. Everyone remained frustrated and the WTO’s credibility as negotiating forum was widely questioned.

This chapter offers some thoughts that might help us understand recent facts and grasp forces that will shape future negotiations. The main points will be that on the one hand, WTO member states have significant opportunities to create joint gains through new agreements, as judged by many independent analysts. Many developing countries (DCs) have also improved their negotiation capacity and have shown they can influence this process to some extent if they negotiate shrewdly. As long as a substantial set of these governments prefers no deal, there will be no deal. On the other hand, the Quad countries still hold disproportionate power to shape the process and the outcome. The EU, Japan, and the US adapted slowly to the long-term power shift, especially on high-priority issues for DC governments such as agriculture, implementation of past agreements, special and differential treatment, and the so-called Singapore issues (a high defensive priority). Groups of DCs responded by refusing to make concessions demanded by the North on other issues.

The first section will summarize the round’s setting, highlighting major opportunities and problems for developing countries. A second section will present evidence suggesting that despite their relative political weakness, they do have some space in which to negotiate, and that their strategy choices have made a difference. A third section will document the limited gains and deadlocks on major issues after four years, and a concluding section will draw provisional lessons from recent experience.

The negotiation setting for developing countries

Developing countries face a mix of opportunities and obstacles to achieving their goals in WTO negotiations. This setting gives low and middle income countries some space for negotiating, and that space has been growing slowly at the expense of traditional industrial states.

The pull of market opportunities

World market conditions, given present policies, offer WTO members the opportunity to create significant new joint economic gains through new WTO agreements, according to many analysts. Present policies are blocking trade that would otherwise flow in response to differences in comparative advantage. Exchanges of concessions on remaining goods tariffs and barriers to services trade would allow those differences to expand trade and improve economic efficiency in many countries. This could include substantially greater flows among developing countries and China as well as in the traditional North–South channel. Cline (2005) offers the optimistic estimate that if all world trade barriers were eliminated, developing countries would gain approximately $200 billion a year in income, half of which would come from industrial countries removing barriers to their exports. He claims that 500 million people could be lifted out of poverty over 15 years. A World Bank simulation of a different outcome put the gains for developing countries at $350 billion and 140 million people lifted out of poverty by 2015 (World Bank 2003: xxix).¹ Even if these figures prove exaggerated, these opportunities are pulling governments toward negotiation and encouraging them to consider compromises to achieve gains.

At the same time, all negotiated joint gains must be distributed among the parties, and within the zone of agreement, the more one player grabs the less is left for the others. If players anticipate this and believe that all others will do so too, negotiators can be expected to use distributive tactics during the process to establish the credibility of their respective commitments to claim their shares in the end.² When these players’ demands are inconsistent with one another, they generate an impasse to be resolved or not...

Table of contents

• Cover Page
• Developing Countries and Global Trade Negotiations
• Routledge Advances in International Relations and Global Politics
• Title Page
• Copyright Page
• Figures
• Tables
• Contributors
• Introduction
• 1 Growing power meets frustration in the Doha round’s first four years
• 2 Developing countries and the G20 in the Doha round
• 3 Agricultural tariff and subsidy cuts in the Doha round
• 4 Making and keeping negotiating gains: Lessons for the weak from the negotiations over intellectual property rights and access to medicines
• 5 Services: The importance of further liberalization for business and economic development in the region
• 6 The future of Singapore issues
• 7 Bilateral negotiations in a multilateral world: Implications for the WTO and global trade policy development