The Millennium Round And Developing Countries: Negotiating Strategies And Areas Of Benefits

Written prior to the WTO conference in Seattle, this paper identifies negotiating strategies and areas of benefits from a new multilateral round of trade negotiations for developing countries. Although the attempts to launch a round at Seattle failed, the strategy outlined in the paper remains relevant, should fresh efforts be made to launch a round. From the viewpoint of overall strategy, developing countries should limit the agenda for anew round to the built-in Uruguay Round (UR), agenda plus trade liberalization in industrial goods. From the long-run perspective, they need to commit substantial human and financial resources to the creation of native research and negotiating capacity on WTO-related issues. The areas covered in the paper include trade liberalization, multilateral agreement on investment, dispute settlement, anti-dumping, and labour and environmental standards. Expected benefits from liberalization in industrial products to developing countries justify their inclusion in the new round, even though they are not a part of the UR built-in agenda. In agriculture, developing countries must watch out against the proliferation of sanitary and phytosanitary(SPS) measures, which threaten to turn into the most important barrier against their agricultural exports as this sector is liberalized. On electronic commerce, a key objective should be to classify it as trade in services. Developing countries should then seek the liberalization of services by developed countries in sectors in which they can export services electronically. There is an acute need to improve the access of developing countries to the legal and professional services necessary to get a fair hearing in the Dispute Settlement Body. Developed countries have substantial in-house resource to devote to disputes which developing countries lack. In the short run, this asymmetry must be corrected by the provision of resources that allow developing countries to hire private legal experts. In the long run, developing countries must develop their own in-house expertise. Time is not yet ripe for a multilateral agreement on investment. Should developed countries nevertheless insist upon it, its scope should be limited to direct foreign investment. Even then, developing countries should insist on a parallel agreement on the movement of natural persons. On other non-trade agenda issues, labour standards should be taken out of the WTO and delegated to the International Labour Organization. Likewise, most of the environmental agenda should be delegated to the United Nations Environmental Protection Agency.