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fair_trade_for_all [2010/06/21 16:20]
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fair_trade_for_all [2011/11/16 12:00] (current)
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 ====== Introduction ====== ====== Introduction ======
 +
  
 ===== Recent WTO History ===== ===== Recent WTO History =====
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   * trade facilitation.   * trade facilitation.
  
-Developing countries, wary of entering another bad agreement after the failures of Doha, have blocked progress on developed countries'​ target areas. ​ The US has largely responded to the stalemate by switching its attention to bilateral agreements with individual developing partners, a process which developing countries recognise maximises the US' power advantage.+Developing countries, wary of entering another bad agreement after the failures of Uruguay, have blocked progress on developed countries'​ target areas. ​ The US has largely responded to the stalemate by switching its attention to bilateral agreements with individual developing partners, a process which developing countries recognise maximises the US' power advantage.
  
 ===== Outline of the Book ===== ===== Outline of the Book =====
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 > [M]odern trade agreements have been extended into areas which intrude into national sovereignty with no justification based on the need for collective action and without clearly identified and fairly distributed global benefits. ​ The presumption of consumer sovereignty is based on the premise that society should only interfere with individual choices when those choices have consequences for others, when there is a need for collective action, and the same is true in trade. ---p86 > [M]odern trade agreements have been extended into areas which intrude into national sovereignty with no justification based on the need for collective action and without clearly identified and fairly distributed global benefits. ​ The presumption of consumer sovereignty is based on the premise that society should only interfere with individual choices when those choices have consequences for others, when there is a need for collective action, and the same is true in trade. ---p86
 +
  
 ====== Special Treatment for Developing Countries ====== ====== Special Treatment for Developing Countries ======
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 SDT is controversial. ​ Whilst developing countries argue that SDT is necessary to permit them to pursue appropriate trade policies, opponents argue that: SDT is controversial. ​ Whilst developing countries argue that SDT is necessary to permit them to pursue appropriate trade policies, opponents argue that:
   * it breaks the principle of reciprocity on which the WTO is based   * it breaks the principle of reciprocity on which the WTO is based
-  * according to neoliberal theory, protectionism that SDT encourages is inefficient and bad for developing countries themselves: they'd be better off if forced to liberalise completely (the problems with neoliberal assumptions ​was discussed in chapter 2)+  * according to neoliberal theory, protectionism that SDT encourages is inefficient and bad for developing countries themselves: they'd be better off if forced to liberalise completely (the problems with neoliberal assumptions ​were discussed in chapter 2) 
  
 ===== SDT in Doha ===== ===== SDT in Doha =====
  
-SDT has always been an important demand of the developing countries in Doha, with the G33 its main proponent. ​ After the Cancún ministerial walk-out, in 2004 the EU Trade Commissioner wrote to trade ministers to propose that LDCs((The UN classification recognised by the WTO: 32 of the 50 LDCs are WTO-members;​ eight more are in accession.)) and "other weak or vulnerable developing countries"​{{Which later became the "small vulnerable economies"​ (SVEs).}} should not have to undertake further tariff reductions during Doha, whilst still benefiting from other members'​ reductions. ​ These countries would have the "round for free" (RFF).+SDT has always been an important demand of the developing countries in Doha, with the G33 its main proponent. ​ After the Cancún ministerial walk-out, in 2004 the EU Trade Commissioner wrote to trade ministers to propose that LDCs((The UN classification recognised by the WTO: 32 of the 50 LDCs are WTO-members;​ eight more are in accession.)) and "other weak or vulnerable developing countries"​((Which later became the "small vulnerable economies"​ (SVEs).)) should not have to undertake further tariff reductions during Doha, whilst still benefiting from other members'​ reductions. ​ These countries would have the "round for free" (RFF).
  
 The danger of the RFF approach is that it would reduce the participation of the RFF countries in the round --- indeed, its intention was surely to overcome opposition to developed country proposals by the RFF countries by reducing their incentive to get involved. ​ The result might be that Doha would come to mimic early GATT rounds in which the "GATT operated as a club for the advancement of rich-country interests."​((p93.)) ​ Whilst it would enable poorer economies to benefit from new tariff reductions, these reductions are more likely to be on goods of interest to exporters in other developed countries, of limited relevance and benefit to RFF economies. ​ An additional problem with the approach is that it allows RFF countries to retain a veto over a round in which they are contributing little --- this could hold up negotiations,​ further encouraging the proliferation of bilateral agreements outside the WTO. The danger of the RFF approach is that it would reduce the participation of the RFF countries in the round --- indeed, its intention was surely to overcome opposition to developed country proposals by the RFF countries by reducing their incentive to get involved. ​ The result might be that Doha would come to mimic early GATT rounds in which the "GATT operated as a club for the advancement of rich-country interests."​((p93.)) ​ Whilst it would enable poorer economies to benefit from new tariff reductions, these reductions are more likely to be on goods of interest to exporters in other developed countries, of limited relevance and benefit to RFF economies. ​ An additional problem with the approach is that it allows RFF countries to retain a veto over a round in which they are contributing little --- this could hold up negotiations,​ further encouraging the proliferation of bilateral agreements outside the WTO.
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 > A blanket proscription against government subsidies to technology (industrial policies) is likely to have an adverse effect on developing countries and, indeed, it is likely in practice to be unfair: the United States conducts its industrial policy largely through the military, which supports a wide variety of technological developments that eventually have important civilian applications. ​ And it is hard to conceive of a trade agreement that would prohibit the development of such technologies through defence programmes. ​ (Even the EU has complained about America'​s use of defence expenditures as a hidden subsidy for its aerospace industry.) ---p105 > A blanket proscription against government subsidies to technology (industrial policies) is likely to have an adverse effect on developing countries and, indeed, it is likely in practice to be unfair: the United States conducts its industrial policy largely through the military, which supports a wide variety of technological developments that eventually have important civilian applications. ​ And it is hard to conceive of a trade agreement that would prohibit the development of such technologies through defence programmes. ​ (Even the EU has complained about America'​s use of defence expenditures as a hidden subsidy for its aerospace industry.) ---p105
 +
  
 ====== Priorities for a Development Round ====== ====== Priorities for a Development Round ======
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     * multilateral enforcement (non-injured parties can also retaliate against an offending member)     * multilateral enforcement (non-injured parties can also retaliate against an offending member)
     * monetisation of sanctions (developing countries can sell the right to sanction to other members for whom the sanction would be more valuable, eg if Nicaragua won a dispute against the US, it could sell the right to impose duties to China or the EU)     * monetisation of sanctions (developing countries can sell the right to sanction to other members for whom the sanction would be more valuable, eg if Nicaragua won a dispute against the US, it could sell the right to impose duties to China or the EU)
-  * institutional reform+  * institutional reform:
     * creation of evaluation unit within the WTO to assess likely impact of measures on developing countries     * creation of evaluation unit within the WTO to assess likely impact of measures on developing countries
     * greater transparency (elimination of the Green Room, etc)     * greater transparency (elimination of the Green Room, etc)
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 The US has recently attacked China for allegedly manipulating its exchange rate.  The situation is so complex that in almost all cases it is impossible to definitively determine whether this is truly a deliberate government policy. ​ The threshold for action should be very high, at the least that only high multilateral surpluses be admissible as evidence. The US has recently attacked China for allegedly manipulating its exchange rate.  The situation is so complex that in almost all cases it is impossible to definitively determine whether this is truly a deliberate government policy. ​ The threshold for action should be very high, at the least that only high multilateral surpluses be admissible as evidence.
 +
  
 ====== Joining the Trading System ====== ====== Joining the Trading System ======
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   * China had to accept an extraordinary right of other members to use safeguards against it (beyond GATT [[http://​www.wto.org/​english/​docs_e/​legal_e/​gatt47_02_e.htm#​articleXIX|Article XIX]] and in violation of MFN)   * China had to accept an extraordinary right of other members to use safeguards against it (beyond GATT [[http://​www.wto.org/​english/​docs_e/​legal_e/​gatt47_02_e.htm#​articleXIX|Article XIX]] and in violation of MFN)
   * some LDCs have bound export subsidies at zero (far beyond many developed countries'​ commitments)   * some LDCs have bound export subsidies at zero (far beyond many developed countries'​ commitments)
- +
 > It seems strange that the WTO's developed country members should force acceding countries, particularly small and poor countries like Cambodia and Nepal, into such strong concessions. ​ Grynberg and Joy (2000) suggest that the motivation lies in the developed countries'​ desire to create a precedent that can be applied to future negotiations. ---p161 > It seems strange that the WTO's developed country members should force acceding countries, particularly small and poor countries like Cambodia and Nepal, into such strong concessions. ​ Grynberg and Joy (2000) suggest that the motivation lies in the developed countries'​ desire to create a precedent that can be applied to future negotiations. ---p161
  
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 Whilst Doha has floundered, the US has been aggressively pursuing bilateral treaties. ​ These are bad for development because Whilst Doha has floundered, the US has been aggressively pursuing bilateral treaties. ​ These are bad for development because
-  * they //​temporarily//​ divert trade (and the double-adjustment involved will be particularly painful for developing countries, and+  * they //​temporarily//​ divert trade (and the double-adjustment involved will be particularly painful for developing countries), and
   * the US has greater power in these negotiations,​ but the results will be used as a precedent in multilateral negotiations,​ probably leading to an even less balanced agreement in the WTO   * the US has greater power in these negotiations,​ but the results will be used as a precedent in multilateral negotiations,​ probably leading to an even less balanced agreement in the WTO
  
fair_trade_for_all.1277133621.txt.gz · Last modified: 2010/06/21 13:00 (external edit)