ALAI, América Latina en Movimiento
Trade, WTO and development
The participation of developing countries in the behavior of trade of goods and services worldwide flows and in trade negotiations at the multilateral level, are prominent in the international economic agenda. It also an issue that has assumed greater importance and relevance in the context of recent global economic crisis.
In a multidimensional process, globalization is expressed as one of the main factors that drive the international trade field. The exchange of goods and services worldwide has experienced significant growth, accented with openness and trade liberalization promoted at the institutional level by the World Trade Organization (WTO).
Currently, there is an obvious complex coexistence of practices that restrain trade, as a reflection of strong economic and political interests, as opposed to others who prioritize trade liberalization. The latter have contributed to deepen and diversify competition nationally and internationally, so as to reproduce the historical power relations that favor transnational corporations, especially in developed countries, to the detriment of those countries which are in a development process.
With a high dependence on exports of commodities, not a few among developing countries have been affected by price volatility. Thus, they accentuate the structural problems that impede their economies to diversify exports towards higher value-added products.
Trade liberalization, although it may motivate to some extent an improvement in economic efficiency, by increasing the level of competition, is also a factor which exacerbates the vulnerability of developing countries, preventing a more gradual insertion in international trade.
The promotion of free trade by the WTO, ignoring the asymmetries between member countries, is incompatible with the effective implementation of special and differential treatment that developing countries need. Although some of them have shown positive results in economic growth by the application of freer trade policies, most have not been encouraging experiences. This aspect is of particular interest when making a balance over the relationship between trade and development.
The role of the WTO and the development of multilateral trade negotiations occupy an important place in international debates. Practice shows the limitations of the WTO to promote the interests and priorities of developing countries in the multilateral area. In particular, those problems related to conditions of insertion in the international trade, which limit their participation and reduce their capacity to meet the challenge of globalization.
The behavior of the flows of goods and services worldwide, as reflected by its core trends; the simultaneous existence of highly complex restrictive trade practices which coexist with a vociferous advocacy of trade liberalization; the role of the multilateral trading system in relation to WTO rules; and the impact that the global economic crisis on trade, are the issues that are central to the international trade debate.
Since WTO's creation until now, there are some novelties worthy of particular attention, such as: the increasing the number of members, most of them developing countries; the creation of several working groups to address the relationship of trade with different topics not included earlier in Marrakech; the building of coalitions among members, where developing countries – the majority of members- are fundamental to facilitate and coordinate participation in the negotiations over the issues prioritized by each group. All this with the explicit intention of including Development in the Work Program mandated by the Fourth WTO Ministerial Conference in Doha.
Among the aspects that have not had any perceivable changes at the WTO stands a universal and systematic emphasis on trade liberalization, the erosion and new limitations of something as necessary to developing members as the special and differential treatment, the asymmetries in multilateral agreements that have not been corrected, and the lack of transparency and of an effective participation of all members in the multilateral negotiations.
There are a number of situations that are cause of anxiety and concern about the functioning of the WTO, as the lack of consensus in the negotiations of the Doha Development, trapped on agriculture, which is evidence of a high degree of conditionality among members. Coalitions among common interest sometimes have been weakened, threatening its stability and strength. Add to that the attention of the members, to some extent, has strayed away from the negotiations of the Doha Round toward regional trade agreements as an alternative to the lack of consensus.
The working groups and the work program on small economies, created at the insistence of developing countries, have not resulted in an essential understanding on the part of developed countries to the needs of developing countries, but the dynamics of negotiations have turned in favor of the former, with major concessions obtained in exchange for some of lesser importance.
The issue of development - which was intended to be at the center of the Doha Work Programme - has lost prominence, while the negotiations highlight a greater concern about markets access . There are continuous attempts to expedite negotiations and conclude the round, thus reducing the chances of meeting the needs and priorities of developing member countries. It is well known that WTO trade rules do not conform to the complex conditions under which international trade takes place in the current context, and that the agenda for the round of multilateral trade negotiations failed to articulate diverging interests expressed in the members actions.
For these reasons already mentioned, there is growing uncertainty about the progress of negotiations, while the current WTO leadership has suffered a loss of credibility and confidence in its ability to further development and international economic equity.
- Rosibel Hidalgo, IREI Geneva, EIPC - Havana, 04/10/2012
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